SM Auto Stamping (543065)

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

Key Financials

Strengths

• Trades at a low P/E of 8.09, with a PEG of 0.08 against 203.85% profit growth, so the market is not paying for reported growth.
• ROCE of 18.69% shows the capital employed is generating a healthy return.
• Piotroski F-Score of 7/9 suggests the company is improving on profitability, leverage, and efficiency measures.
• Sales growth of 10.46% provides a moderate tailwind; the business is growing, not shrinking.

Concerns

• Latest quarterly net profit of ₹1 Cr on sales of ₹34 Cr means a very thin ~3% net margin, leaving little room for cost or price shocks.
• Profit growth of 203.85% is far above sales growth of 10.46%, indicating the jump may be low-base driven or non-recurring.
• No dividend (0.00%) means zero cash income; value depends entirely on capital appreciation.
• Book value, debt/equity, and promoter holding are unavailable, so I cannot assess balance sheet strength or management alignment.

AI Analysis

First, the numbers look temptingly cheap: at ₹58.50, the market is paying ₹80 crore for the whole business, and the P/E is just 8.09. Reported profit grew 203.85%, while sales grew 10.46%, and the PEG works out to 0.08. A disciplined investor would say that is either a gift or a trap. I lean toward caution. This is an auto stamping company—a supplier in a cyclical industry, competing for orders from powerful auto manufacturers. The latest quarter earned only ₹1 crore on ₹34 crore of sales, which is about a 3% net margin. That is thin, and thin margins can vanish quickly when raw material costs rise or OEMs squeeze prices. The 203.85% profit growth may be a recovery from a weak base rather than a durable compounding machine. Sales growth of 10.46% is decent, but not enough to explain such a profit jump. I do give credit to the 18.69% ROCE and a Piotroski score of 7, which suggest the company is not mismanaged. Still, with no dividend, no book value, no debt/equity ratio, and no promoter holding data, I cannot compute a margin of safety the way Graham would want. The stock has already rallied from ₹15.05 to ₹58.50 in 52 weeks, so the market has noticed. I would wait, study the next few quarters, and only consider buying if margins stay stable through the next downturn.

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