Chatha Foods (544151)

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

Key Financials

Strengths

• Sales growth of 13.88% shows demand traction in packaged foods.
• Latest quarter is profitable with ₹84 Cr sales and ₹3 Cr net profit.
• ROCE of 11.92% indicates reasonable capital efficiency.
• Small market cap of ₹287 Cr leaves room for growth if execution improves.

Concerns

• Profit growth is negative at -1.24% despite sales growth, indicating margin pressure.
• P/E of 30 and PEG of 2.16 make the valuation expensive relative to flat earnings.
• Piotroski F-Score of 4/9 suggests weak financial health signals.
• No dividend, and missing data on book value, ROE, and promoter holding reduce transparency.

AI Analysis

I look first for a business I can understand, and packaged foods is within my circle of competence. Chatha Foods has a small market cap of ₹287 Cr, latest quarterly sales of ₹84 Cr, and net profit of ₹3 Cr. The company is profitable, but profitability is not improving: sales growth is 13.88%, while profit growth is -1.24%. That gap worries me. It suggests revenue is growing only because the company is spending more or accepting thinner margins. The latest quarter's net profit margin is roughly 3.6%, which is thin for a food processor. ROCE of 11.92% is okay, but not the kind of durable competitive advantage I demand. The Piotroski F-score of 4/9 is a yellow flag; financially healthy companies usually score higher. There is also no dividend, so the only return is price appreciation. At ₹127.35, with a P/E of 30 and PEG of 2.16, the market is asking me to pay a rich price for flat earnings. Graham taught me to buy with a margin of safety; I don't see one trading near the top of its 52-week range with insufficient data on book value, ROE, and promoter holding. The stock has already moved from ₹60 to ₹127.35, so much of the optimism may be priced in. If Chatha can convert its 13.88% sales growth into profit growth, improve returns on capital, and show stronger financial health, it may become interesting. But my job is to weigh what is known today. Today, this is a business to watch, not a business to buy.

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