Prevest Denpro (543363)

FairStock Score: 46/100 — MIXED

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

Key Financials

Strengths

• Strong capital efficiency with ROCE at 25.25%
• Healthy growth: sales up 23.04% and profit up 15.47%
• Latest quarter net margin of 27.8% (₹5 Cr profit on ₹18 Cr sales) suggests pricing power
• Piotroski F-Score of 7/9 indicates solid financial health

Concerns

• Valuation is demanding at P/E of 26.37 and PEG of 1.37, leaving little margin of safety near the 52-week high
• Profit growth of 15.47% is trailing sales growth of 23.04%, signaling possible margin pressure
• Negligible dividend yield of 0.22% means returns depend entirely on future earnings growth
• Missing key data such as book value, ROE, debt/equity, and promoter holding limits a full Graham-style check

AI Analysis

Let me first ask what I am buying. Prevest Denpro sells dental and medical supplies, a business I can understand, but the data tells me I must be disciplined. Sales grew 23.04% and profits grew 15.47%, while ROCE is an impressive 25.25%. A business that can earn 25% on capital without employing excessive leverage—though the debt/equity figure is not given—is worth studying. The latest quarter, ₹18 Cr in sales generated ₹5 Cr in net profit, a 27.8% margin that suggests pricing power. The Piotroski score of 7 out of 9 gives me reasonable confidence in financial health; it is not perfect, but it is solid. Yet I do not pay any price for a good business. The P/E of 26.37 and PEG of 1.37 mean I am paying a premium for growth. Graham would want a margin of safety; at ₹616.50, near the 52-week high of ₹622.05, there is not much cushion. The dividend yield is only 0.22%, so my return depends entirely on future earnings growth. What bothers me is profit growth of 15.47% lagging sales growth of 23.04%. If management is spending heavily to grow, I want to see that translate into earnings soon; otherwise, the quality of growth is questionable. Also, I lack key data: book value, return on equity, debt/equity, and promoter holding. Without those, I cannot value the company with Graham's usual thoroughness. This is a fast grower, not a stalwart. I would keep it on my watchlist, buy only at a lower price, and monitor whether margins and ROCE hold as the company scales.

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