Shanmuga Hos. (544365)

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

Key Financials

Strengths

• ROCE of 17.20% indicates reasonable efficiency in using capital.
• Latest quarter shows positive net profit: ₹2 Cr on ₹25 Cr sales, roughly an 8% net margin.
• P/E of 14.78 is not excessive if earnings stability can return.
• Operating in the hospital sector gives exposure to structural healthcare demand in India.

Concerns

• Sales growth is flat at 0.00%, with no top-line expansion.
• Profit growth is negative at -15.90%, showing deteriorating earnings.
• Piotroski F-Score of 3/9 is weak and signals financial stress or declining fundamentals.
• No dividend, and missing promoter holding, book value, and debt-equity data make the picture incomplete.

AI Analysis

At ₹41.47, Shanmuga Hos. is a micro-cap hospital with a market cap of just ₹56 Cr. As a value investor, I start not with price but with business quality. A hospital can be a dependable, cash-generating business if it has pricing power, a strong local reputation, or barriers to entry. But from the limited figures given, I cannot confirm any moat. Sales growth is exactly 0.00%, so the top line is standing still. Profit growth is minus 15.90%, meaning the bottom line is moving backwards. The latest quarter does show ₹25 Cr in sales and ₹2 Cr in net profit, which is roughly an 8% net margin — acceptable, but not outstanding. ROCE of 17.20% is a bright spot; it suggests capital is being put to reasonable use. However, the Piotroski F-Score of 3 out of 9 is a serious warning. A good business should score much higher; this score points to deteriorating fundamentals, weakening profitability, or growing financial stress. At a P/E of 14.78, the market is not asking a crazy price, but with falling earnings and zero dividend yield, I am being asked to pay for future recovery, not past proof. Worse, I have no promoter holding data, no book value, and no debt-equity ratio. That makes it impossible to judge leverage or insider commitment. In Graham's framework, an investor should demand a margin of safety in both price and information. This stock fails the information test. It may be a slow-growing regional hospital with decent capital returns, but the negative profit trend and weak F-score tell me to wait. I will not buy hope; I will wait for a lower price or, better, for several quarters of improving sales and profit.

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