Chandrima Mercan (540829)

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

Key Financials

Strengths

• Sales growth of 93.60% shows strong recent business expansion.
• Piotroski F-Score of 7/9 suggests improving fundamentals on several operating signals.
• Book value is positive at ₹2.74 per share, giving a small equity cushion.
• Latest quarter sales of ₹12 Cr indicate meaningful trading activity relative to the ₹65 Cr market cap.

Concerns

• Profit growth of only 2.50% is far behind sales growth, and latest quarter net profit is ₹0 Cr—top-line growth is not converting to earnings.
• ROCE of 0.90% and ROE of 4.44% are very low for a business trading at 10.39 times book value.
• P/E of 50.26 is expensive for a trading distributor with no obvious moat.
• No dividend and no promoter-holding disclosure reduce investor visibility.

AI Analysis

This company looks like the kind of stock Graham would tell me to put back on the shelf. Chandrima Mercan is a trading and distribution business—there is nothing proprietary about that model. The numbers confirm it: ROCE is just 0.90%, ROE 4.44%. A business that earns 4.44% on equity and less than 1% on capital employed is not a wealth compounder, regardless of the story. The market, however, is paying a rich price: P/E 50.26 and P/B 10.39, while book value is only ₹2.74. At ₹28.47, you are paying more than ten times book for a business that struggles to earn its cost of capital. The supposed growth is inflated. Sales jumped 93.60%, but profit growth is only 2.50%, and the latest quarter shows sales of ₹12 Cr and net profit of ₹0 Cr. That top line is not reaching the bottom line—a big red flag. The F-Score of 7/9 does show some improvement in financial signals, but I don't buy a stock solely because a scorecard improved. There is also no dividend and no promoter-holding disclosure. The 52-week range of ₹3.26 to ₹28.47 suggests this is a speculative micro-cap move, not an investment. In Graham's language, price is what you pay; value is what you get. Here, the value is not visible. I would wait until margins improve, earnings catch up with sales, and the price offers a margin of safety. Until then, this belongs in the too-hard pile.

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