Northern Spirits (542628)

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

Key Financials

Strengths

• Trailing P/E of 8.03 offers a low earnings multiple on reported profits.
• ROE of 21.71% and ROCE of 17.68% indicate capital efficient use on paper.
• Sales growth of 12.89% shows the top line is still expanding.
• Latest quarter revenue of ₹596 Cr demonstrates meaningful scale in distribution.

Concerns

• Profit fell 22.04% while sales rose 12.89%, showing clear margin compression; latest quarterly net profit of ₹7 Cr on ₹596 Cr sales is extremely thin.
• P/B of 3.67 means investors pay over 3.6 times book value, leaving little asset margin of safety.
• Piotroski F-Score of 4/9 and dividend yield of 0.25% point to weak fundamental quality and negligible shareholder return.
• Debt/Equity and promoter holding are not provided, so leverage and governance cannot be assessed.

AI Analysis

Let me think about Northern Spirits the way Graham taught: buy with a margin of safety. At ₹244.70, the stock trades at 8.03 times trailing earnings, so on the surface it looks inexpensive. But price is only what you pay; value is what you get. This is a trading and distribution business, and such businesses rarely have durable moats. Customers can switch, margins depend on negotiating power, and the balance sheet becomes crucial. The reported ROE of 21.71% is attractive, and ROCE of 17.68% is respectable, but I cannot ignore the divergence between sales and profit. Sales rose 12.89% while profit fell 22.04%. That means the company is doing more business but keeping less per rupee. The latest quarter reinforces my caution: ₹596 crore of sales produced just ₹7 crore of net profit. That is an extremely thin cushion. With a P/B of 3.67, I am paying more than three and a half times book value, so there is very little asset support if earnings stumble. The Piotroski score of 4 out of 9 is mediocre and signals deteriorating financial health, not the solid fundamentals I look for. The PEG of 0.62 assumes normal growth will resume, but with profit actually down, that ratio flatters the stock. The ₹96.60 to ₹244.70 range shows the price has already run up; at the top of that range, I am not getting a bargain. I would need consistent margin improvement, clear debt disclosure, and promoter holding details before treating this as an investment. For now, it is a low P/E stock with a troubled earnings trend, not a business I can trust as a compounding machine.

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