Add-Shop E-Reta. (541865)

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

Key Financials

Strengths

• Deep discount to book value: price ₹14.96 versus book value ₹46.29, P/B of 0.32.
• Latest quarter sales of ₹35 Cr compare favourably with a ₹43 Cr market cap, offering revenue scale relative to market value.
• Price near its 52-week high of ₹14.96, up from ₹5.57, suggesting some market recognition.
• No dividend burden, so cash is retained for operations or restructuring.

Concerns

• Profit growth crashed by 71.74% and the latest quarter net profit is ₹0 Cr, indicating no current earnings power.
• ROE of 0.94% and ROCE of 4.26% show capital is earning far below an acceptable return.
• P/E of 21.02 and PEG of 6.96 make the stock expensive on an earnings basis despite the low P/B.
• Promoter holding is undisclosed and no dividend is paid, creating transparency and shareholder return concerns.

AI Analysis

At ₹14.96, Add-Shop E-Reta trades at just 0.32 times book value, while the stated book value is ₹46.29 per share. That looks like a classic Graham cigar butt. But I didn't become wealthy buying cheap businesses that are also mediocre businesses. The earnings tell a different story: ROE is 0.94%, ROCE is 4.26%, and profit growth has collapsed by 71.74%. The latest quarter's net profit is zero — no earnings power to speak of. A P/E of 21.02 on a declining earner means I'm not being paid to wait; I'm being asked to hope. Sales grew only 3.02%, which in e-commerce is hardly evidence of a durable competitive advantage. The Piotroski F-score of 4 out of 9 reinforces my suspicion that the financial condition is not improving. There is no dividend to compensate, and promoter holding is not disclosed, so I cannot assess whether insiders are aligned with minority shareholders. The positive side is limited: the stock is near the top of its 52-week range, and the low price-to-book offers downside protection if the assets are really worth book and can be converted to cash. But e-retail inventory and receivables can shrink quickly; book value can evaporate. This is a possible asset play, not a franchise. If I were to consider it, I would need to know realizable value of assets, the debt/equity situation, and why profits have disappeared. In the absence of evidence, I'd rather pass. As Buffett said, it's better to buy a wonderful business at a fair price than a fair business at a wonderful price. Here, I see neither wonderful business nor truly wonderful price once earnings quality is examined.

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