Machhar Industri (543934)

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

Key Financials

Strengths

• Revenue growth of 21.13% shows expanding demand for its specialty chemicals.
• Piotroski F-Score of 7/9 suggests decent financial health across profitability, leverage, and efficiency metrics.
• Profit growth of 462.5%, though from a tiny base, indicates an earnings turnaround is underway.

Concerns

• ROE of 4.13% and ROCE of 3.55% reflect poor capital efficiency; returns are far below what a shareholder should accept.
• P/E of 49.48 with latest quarterly net profit at ₹0 Cr means the valuation is not supported by current earnings.
• No dividend payout and undisclosed promoter holding leave retail investors without clear signals of insider commitment.
• Tiny ₹25 Cr market cap with a 52-week range of ₹221.20–₹395.00 implies high volatility and liquidity risk.

AI Analysis

As I look at Machhar Industri, I'm reminded that in the stock market, you pay a price for optimism. At ₹338.85, the market values this specialty chemicals company at ₹25 crore. That's about 49 times the last twelve months' earnings. But what are those earnings? The latest quarter shows sales of just ₹4 crore and net profit of ₹0 crore. The headline profit growth of 462.5% may look spectacular, but when earnings were near zero a year ago, even a small improvement produces a huge percentage. The company does enjoy 21% sales growth, which is encouraging, and a Piotroski F-Score of 7/9 tells me the balance sheet isn't deteriorating. But my mentor Graham taught me to focus on return on capital. Here, ROE is only 4.13% and ROCE 3.55%. If I can earn more in a bank deposit, why should I pay 2.05 times book value? Book value is ₹165.35, so I'm paying ₹338.85 for assets that earn barely 4%. There is no dividend to compensate for the wait. A PEG ratio of 0.20 is seductive, but it's built on unsustainable profit growth. The small capital base means a single contract or a quarter's blip can distort the numbers. Without promoter holding or debt data, I cannot fully judge management's skin in the game. This is a micro-cap in a cyclical specialty chemicals segment; it's not the kind of business I can confidently value. If the company can steadily deploy capital at higher returns, this may become interesting. For now, I'd rather remain prudent. Price is what you pay; value is what you get. I don't see enough value here.

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