Forbes Precision (544186)

FairStock Score: 36/100 — MIXED

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

Key Financials

Strengths

• ROCE of 24.96% and ROE of 17.95% indicate efficient capital deployment and a possible competitive edge.
• Sales growth of 12.12% shows the business is still expanding despite profit pressure.
• Latest quarter is profitable with ₹64 Cr sales and ₹6 Cr net profit.
• Dividend yield of 3.83% offers some cash return to shareholders.

Concerns

• Net profit declined 24.87% even as sales grew 12.12%, pointing to clear margin compression.
• Valuation is expensive: P/E of 25.09 and P/B of 11.99 against book value of ₹30.26 leave no margin of safety.
• Piotroski F-Score of 4/9 and FairStock Score of 34/100 signal financial deterioration and elevated risk.
• Stock is at its 52-week high of ₹362.75 after rallying from ₹103.15, so the easy gains are likely behind.

AI Analysis

Let me start with the numbers that matter. Forbes Precision earns a return on equity of 17.95% and a return on capital employed of 24.96%. Those are good numbers; they suggest a business that can deploy capital without destroying value. Sales grew 12.12%, and last quarter it booked ₹64 Cr of revenue and ₹6 Cr of net profit. So the engine is running. But then I look at the owner's earnings: total profit fell 24.87% even as sales rose. That tells me margins are being squeezed, from competition, cost pressure, or both. Graham would never pay 25.09 times trailing earnings for a business whose profits are falling. The price-to-book ratio of 11.99 against a book value of ₹30.26 is especially rich. You are paying nearly twelve rupees for every rupee of net assets. The stock has moved from ₹103.15 to ₹362.75, a three-fold run, so the market has already cast its vote. At this price, with a Piotroski score of 4/9, I see more risk than reward. The dividend yield of 3.83% is comforting, but I want to know if earnings can cover it after a 24.87% profit drop. The PEG ratio of 2.07 tells me the growth is not cheap. I also have to note that debt/equity and promoter holding are not available; in an industrial business, hidden leverage can be fatal, and promoter skin in the game matters. This is a decent industrial company, but a poor stock at this price. I would wait patiently for either a margin recovery, better financials, or a much lower price. A business can be wonderful and still be a bad investment if you overpay. My circle of competence says: do not chase.

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