Shreenath Paper (544372)

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

Key Financials

Strengths

• Low P/E of 9.57 provides a modest valuation cushion.
• Sales still grew 5.01% despite a difficult year.
• ROCE of 11.74% suggests reasonable capital efficiency.
• Latest quarter remained profitable with ₹1 Cr net profit on ₹55 Cr sales.

Concerns

• Profit growth declined 21.43%, making the PEG of 1.91 unattractive if earnings keep falling.
• Trading and distribution businesses typically have low pricing power and thin net margins of around 1.8%.
• Zero dividend yield means shareholders depend entirely on uncertain price appreciation.
• Insufficient disclosures around book value, debt, promoter holding, and 52-week range, while the Piotroski F-score of 4/9 signals weak financial health.

AI Analysis

At ₹13.05, Shreenath Paper sells for ₹26 crore, or 9.57 times earnings. That looks cheap, but cheap can be a trap. This is a trading and distribution business, and I have always preferred companies with pricing power and a durable moat. A distributor is at the mercy of suppliers and customers; there is little to protect returns over time. Sales grew only 5.01%, while profits fell 21.43%. Latest quarter shows ₹55 crore sales producing just ₹1 crore net profit — roughly 1.8% margin. That is a razor-thin buffer. If costs rise or competition intensifies, profits can vanish. ROCE of 11.74% is respectable, but I cannot assess true financial health without book value, debt-equity, or promoter holding. The Piotroski F-score of 4/9 bothers me; it suggests weak financial fundamentals. There is no dividend, so the investor relies entirely on price appreciation, yet with profit declining and PEG at 1.91, the growth is not cheap. Graham would demand a margin of safety. At 9.57 P/E, there is some cushion, but the zero dividend and lack of disclosure are warning signs. I need to know the balance sheet before treating this as a value opportunity. For now, this is a slow grower at best, and I would wait for evidence that margins are stabilizing and profit growth has turned positive.

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