Shradha AI Tech (543976)
CyclicalFairStock Score: 12/100 — RISKY
Score breakdown: P/E: 2/3 · ROCE: 1/2 · Growth: 0/2 · Dividend: 1/1
Key Financials
| Current Price | ₹92.22 |
| Market Cap | ₹562.1 Cr |
| P/E Ratio | 17.38 |
| ROCE | 17.45% |
| ROE | 12.57% |
| Dividend Yield | 2.14% |
| Profit Growth | -53.58% |
| Debt/Equity | — |
| Sales Growth | -40.43% |
| 52-Week Range | ₹25.1 — ₹92.22 |
| Sector | IT - Software |
| Book Value | ₹12.04 |
Strengths
- ROE of 12.57% and ROCE of 17.45% show existing capital earns a decent return
- P/E of 17.38 is not excessive if earnings stabilize and recover
- Dividend yield of 2.14% provides some income while waiting
- Latest quarter is still profitable with ₹1 crore net profit despite weak sales
Concerns
- Sales down 40.43% and profit down 53.58% indicate severe business deterioration
- Piotroski F-Score of 3/9 signals weak financial health
- P/B of 7.66 against book value of ₹12.04 leaves very little asset protection
- Latest quarter scale of ₹3 crore sales and ₹1 crore profit looks too small to justify a ₹562 crore market cap
AI Analysis
At ₹92.22, Shradha AI Tech wears a price tag of ₹562 crore. The P/E of 17.38 looks reasonable on the surface, but I must look beneath. Sales have contracted by 40.43%, and profit has collapsed by 53.58%. A business losing that much momentum is not a compounder; it is a business under stress. The latest quarter tells a grimmer story: only ₹3 crore of sales and ₹1 crore of net profit. If that run-rate were the new normal, the earnings multiple would be far higher than the stated 17.38. Book value stands at ₹12.04, and I am being asked to pay 7.66 times book. Where is the margin of safety? ROE is 12.57% and ROCE is 17.45%, which are respectable if the decline is cyclical and ends here. But the Piotroski F-score of 3 out of 9 is a clear red flag: weak financial health and deteriorating fundamentals. The dividend yield of 2.14% is pleasant, but dividends can be cut when earnings fall. The stock sits exactly at its 52-week high of ₹92.22, after ranging from ₹25.10. Mr. Market is rewarding hope, not current performance. I would rather buy a wonderful company at a fair price than a fair company at a wonderful price. This is a declining software consulting business, not a wonderful business. I need evidence of stabilization: growth returning, margins holding, and leverage disclosed, since debt/equity is not available. At this price, the odds are not in my favor. I will wait.
Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer