Shivam Chemicals (544165)

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

Key Financials

Strengths

• Sales growth of 39.45% shows strong demand traction.
• Profit growth of 239.66% and PEG of 0.36 indicate possible earnings acceleration.
• Piotroski F-Score of 7/9 suggests improving financial health.
• ROCE of 11.38% is decent for a small-cap industrial business.

Concerns

• P/E of 49.55 is expensive unless growth continues at an exceptional pace.
• Latest quarter net margin is only ~1.5% on ₹132 crore sales, leaving little cushion.
• Stock is near its 52-week low at ₹58 versus ₹130.40 high, signaling negative market sentiment.
• Zero dividend and missing debt, book value, and promoter holding data reduce transparency.

AI Analysis

When I look at Shivam Chemicals, I see a small animal-feed business trading at ₹58 with a market cap of just ₹100 crore. The headline numbers are striking: sales up 39.45% and profit up 239.66%. A PEG ratio of 0.36 suggests that if this growth persists, the stock is not as expensive as the 49.55 P/E appears. But I must be careful. A 49.55 P/E means the market is paying nearly fifty rupees for every rupee of current earnings. That is a high price for a commodity-like animal feed business with no visible moat. The latest quarter shows ₹132 crore in sales but only ₹2 crore in net profit — a thin margin of about 1.5%. That tells me this is a low-margin, high-volume business where small cost swings can crush profitability. The ROCE of 11.38% is respectable but not exceptional, and with no dividend, the investor relies entirely on price appreciation. The Piotroski score of 7/9 is encouraging and suggests improving fundamentals, but I cannot ignore that the stock sits near its 52-week low of ₹57.40, down from ₹130.40. That is a steep fall, and I would question whether the market is pricing in a slowdown or a miss in future quarters. I do not have book value, debt-to-equity, or promoter holding data, which makes me uneasy. In Graham's framework, lack of information is not a reason to buy. I want margin of safety, and a high P/E with thin margins offers very little. I would need to see sustained cash generation, better margins, and clarity on the balance sheet before treating this as a true bargain.

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