Sancode Tech. (543897)

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

Key Financials

Strengths

• Revenue growth of 29.51% shows the company is expanding its top line.
• Reported profit growth of 122% suggests improving operating leverage, albeit from a tiny base.
• Piotroski F-score of 7/9 indicates decent financial-strength signals and improving fundamentals.
• PEG of 1.08 would be reasonable if the current profit growth is sustained in the future.

Concerns

• P/E of 81.89 is very expensive for a company with latest-quarter net profit of roughly ₹0 crore.
• ROCE of only 7.07% barely covers the cost of capital and implies a weak or absent moat.
• Price of ₹64.44 is below the 52-week low of ₹90.00, reflecting severe market distrust or distress.
• Critical data missing: book value, debt/equity, ROE, and promoter holding — no Graham-style margin of safety possible.

AI Analysis

Looking at Sancode Tech, the first thing that strikes me is how little I actually know. Book value, debt-to-equity, promoter holding, ROE — all blank. That alone disqualifies it from a Graham-style margin-of-safety check. The market cap is ₹26 crore and the price is ₹64.44, which is actually below the stated 52-week low of ₹90.00. That is a loud warning sign. Reported sales growth of 29.51% and profit growth of 122% sound exciting, but the latest quarter shows sales of ₹7 crore and net profit of roughly zero. Zero profit cannot support a P/E of 81.89. The market is paying as if this tiny IT-enabled services firm is a compounder, but ROCE is only 7.07% — barely more than a bank deposit and far below what a quality franchise should earn. No dividend means I must depend entirely on capital gains. The Piotroski F-score of 7/9 is one genuine bright spot; it says the fundamentals are improving. The PEG ratio of 1.08 would be fine if profits were strong, but with current earnings near zero, PEG is built on hope. I also cannot assess debt or asset quality because critical data is missing. In investing, what you cannot see can kill you. This looks like a speculative turnaround situation, not a Buffett-quality business. If the company can convert rising sales into real, growing profits, improve ROCE, and release transparent numbers, I would happily revisit. Until then, I prefer to sit on my hands. The price may look cheap at ₹64.44, but cheap can always become cheaper when the balance sheet is invisible. Patience is the better part of valor.

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