Riddhi Corporate (540590)

Score breakdown: P/E: 3/3 · ROCE: 1/2 · Growth: 0/2 · Dividend: 0/1

Key Financials

AI Analysis

AI-generated, general educational analysis — not personal investment advice.

What have we here? A company with sales up 126% yet profits down 64.5% — that immediately sets off alarm bells. Riddhi Corporate trades at ₹78.64, a P/E of 7.74, and a P/B of 1.57 against book value of ₹50.02. The market cap is only ₹93 crore. On the surface, a P/E under 8 looks cheap, but cheap can be a trap when earnings are falling. The latest quarter shows ₹135 crore in sales but just ₹3 crore in net profit — a razor-thin margin of about 2.2%. That suggests the business is buying revenue, perhaps at the expense of profitability. ROE of 16.32% and ROCE of 13.65% are respectable, but those are trailing figures and could deteriorate if profit keeps sliding. A Piotroski F-Score of 4/9 is weak, flagging poor financial health. The PEG ratio of 0.06 is meaningless when profit growth is negative — I'd ignore it. There is also no promoter holding data, which is a red flag for governance transparency. I prefer businesses with predictable earnings and a clear competitive moat. This looks more like a high-revenue, low-quality enterprise trying to find its footing. The declining profits and thin margins make it a potential value trap unless operations genuinely turn around. I'd demand a margin of safety and wait for evidence of stabilizing margins before touching it.

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Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer