Mehul Colours (544472)

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

Key Financials

Strengths

• Sales growth of 31.45% and profit growth of 28.52% show strong momentum.
• Latest quarter net margin is about 21.4% (₹3 Cr profit on ₹14 Cr sales), indicating pricing power or operating efficiency.
• ROCE of 51.28% reflects excellent capital efficiency and a possible niche advantage.
• Piotroski F-Score of 7/9 suggests solid financial fundamentals.
• PEG of 0.40 with P/E of 11.89 offers a potentially attractive growth-at-a-reasonable-price setup.

Concerns

• Zero dividend yield means no income cushion for investors.
• Critical data missing: book value, debt/equity, promoter holding, and 52-week range, limiting full Graham-style analysis.
• Market cap of only ₹74 Cr makes it a micro-cap vulnerable to volatility and liquidity issues.
• High growth at a small base may not be sustainable in a cyclical specialty chemicals industry.

AI Analysis

Specialty chemicals is a good hunting ground for small compounders, but my first rule is never invest in a business you cannot understand, and my second rule is never invest in numbers you cannot see. Mehul Colours shows several attractive signals. Sales grew 31.45% and profit grew 28.52%. Latest quarter sales are ₹14 Cr and net profit is ₹3 Cr, giving a net margin of roughly 21.4% — excellent for a chemical business. ROCE is 51.28%, far above what most Indian manufacturing businesses earn. Such a return on capital usually suggests a niche product, client stickiness, or an asset-light process, all potential ingredients of a small moat. The Piotroski F-Score of 7 out of 9 also points to sound financial health. The valuation looks reasonable too. At ₹70.34, the market cap is just ₹74 Cr, so the P/E is 11.89. With profit growth of 28.52%, the PEG ratio is close to 0.40. That is the kind of price-to-growth that gives a margin of safety — if the growth proves durable. But I must be careful: missing data is itself a warning. There is no book value, no P/B, no debt-to-equity ratio, no promoter holding figure, and no 52-week range. I cannot judge the balance sheet, insider commitment, or share price volatility. The dividend yield is zero, so small investors must rely entirely on capital appreciation. A small, fast-growing chemical company with high ROCE can be a wonderful business, but only if the fundamentals are visible and durable. At ₹74 Cr market cap, even a small order loss or raw material shock can hit hard. The numbers available are promising; the missing numbers keep me humble. I would not buy blindly today. I would put this on the watch list, demand the missing disclosures, and wait for confirmation.

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