Alphalogic Tech. (542770)

FairStock Score: 7/100 — RISKY

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

Key Financials

Strengths

• ROCE of 16.28% indicates respectable returns on capital employed at the operating level.
• Profit growth of 10.48% despite collapsing sales suggests some margin discipline or cost management.
• Piotroski F-Score of 6/9 points to moderately acceptable financial health indicators.
• Latest quarter net margin of roughly 20% on ₹10 Cr sales shows the business is profitable on a small base.

Concerns

• Sales growth of -53.84% is alarming; the topline more than halved and no high P/E can justify a shrinking business.
• Extreme valuation: P/E of 49.52, P/B of 39.79, ROE of only 7.94%, and zero dividend yield.
• PEG of 4.73 implies the earnings growth rate does not support the premium, and FairStock Score of 9/100 flags high risk.
• The stock has already risen from ₹32.50 to ₹242.30 in the 52-week range, leaving little margin of safety.

AI Analysis

When I look at Alphalogic Tech, the first question I ask is simple: what am I buying? At ₹242.30, the market is placing a ₹1,517 Cr value on a software-consulting business whose latest quarter shows only ₹10 Cr of sales. That is an extraordinarily rich price for such a small revenue base. Sales growth is minus 53.84 percent. For a consulting firm, a more-than-halved topline is a serious red flag. Yes, profit grew 10.48 percent, but at a P/E of 49.52, I am paying nearly fifty rupees for every one rupee of earnings. The book value is ₹6.09, so a P/B of 39.79 means I am paying roughly forty times tangible assets for a company earning only 7.94 percent on equity. That gap makes no Graham-style sense. ROCE of 16.28 percent shows some operational efficiency, but it does not compensate for a collapsing revenue base. The Piotroski score is 6 out of 9, indicating average financial health, yet the FairStock score of 9 out of 100 calls the stock risky. With a PEG of 4.73, the earnings growth available does not come close to justifying the valuation. There is no dividend yield, so the investor's only hope is further capital appreciation. The stock has already moved from ₹32.50 to ₹242.30 within a year. As Buffett often says, price is what you pay, value is what you get. Here I see a lot of hope priced in and very little margin of safety. If sales have halved, a 49.5 times earnings entry price leaves no room for error. I would rather wait on the sidelines than chase a small business priced for perfection.

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