Vivid Mercantile (542046)

FairStock Score: 49/100 — MIXED

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

Key Financials

Strengths

• Reported sales growth of 1,501% and profit growth of 1,000% show explosive recent momentum
• Latest quarter net profit of ₹7 crore on sales of ₹30 crore implies a strong net margin of about 23%
• P/E of 7.70 and PEG of 0.01 suggest apparent cheapness if current earnings are sustainable
• Piotroski F-Score of 7/9 indicates reasonably healthy near-term fundamentals

Concerns

• P/B of 12.38 against book value of ₹5.13 means investors are paying a huge premium to stated net worth
• ROCE of only 1.03% signals very poor capital efficiency for a capital-intensive real estate developer
• Zero dividend yield offers no income support while waiting for growth to materialise
• 52-week range of ₹3.98 to ₹63.50 reflects extreme speculative price movement rather than stable compounding

AI Analysis

At ₹63.50, Vivid Mercantile looks like a math problem that does not add up. The market cap is ₹644 crore, while the stated book value is just ₹5.13 per share. That means I am paying 12.38 times stated book for a real estate developer with a ROCE of only 1.03%. Graham would demand a margin of safety; here the margin is on the other side. The reported sales growth of 1,501% and profit growth of 1,000% sound spectacular, but real estate is cyclical and project-driven. A single project can turn a small company into a 'growth story' for a few quarters, yet the latest quarter's sales of ₹30 crore and profit of ₹7 crore, annualized, hardly justify a ₹644 crore valuation unless the unusual growth persists for years. The low P/E of 7.70 is tempting, but I cannot reconcile it with the low return on capital. If the company truly earns 18.29% on equity, why is book value so thin and why is capital productivity so poor? The ROCE of 1.03% tells me the underlying business consumes capital without generating commensurate operating returns. There is no dividend to reward shareholders while waiting. Promoter holding is not disclosed, which troubles me. A real estate company should eagerly show skin in the game. With the stock at its 52-week high of ₹63.50, up from ₹3.98, the market has already re-rated expectations. I would rather miss this move than chase a cyclical at peak optimism with incomplete data.

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