Nilachal Carbo (544510)

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

Key Financials

Strengths

• ROCE of 24.09% indicates strong capital efficiency.
• P/E of 12.65 and PEG of 0.72 offer modest valuation if current earnings are sustainable.
• Profit growth of 29.39% with latest quarter net profit of ₹8 Cr on ₹105 Cr sales.
• Piotroski F-score of 7/9 points to generally sound financial health.
• Market cap of ₹199 Cr versus annualized profit of roughly ₹32 Cr gives a healthy earnings yield.

Concerns

• Zero dividend yield means no income cushion for shareholders.
• Ferro and silica manganese is a cyclical commodity business with limited pricing power and no moat.
• Sales growth is only 5.86%; profit growth is margin-driven and could reverse.
• Book value, debt/equity, and promoter holding data are missing, so balance sheet risk cannot be assessed.

AI Analysis

At ₹80, Nilachal Carbo trades at 12.65 times earnings, a market cap of ₹199 Cr against latest quarter net profit of ₹8 Cr. That annualizes to roughly ₹32 Cr, so the multiple is not demanding. But I must first ask what kind of business I am buying. This is ferro and silica manganese, a commodity input for steel. There is no consumer franchise, no pricing power, no moat. In good times these businesses print money; in bad times margins vanish. The 24.09% ROCE is impressive, and a Piotroski score of 7/9 suggests a healthy recent financial position. Profit growth of 29.39% with sales growth of only 5.86% tells me the improvement is coming from margins and operating leverage, not durable demand. That can reverse quickly in a cyclical downturn. Graham would demand a margin of safety. At a P/E of 12.65 and PEG of 0.72, the valuation is not expensive if today's profitability is normal. But commodity cyclicals often look cheapest at the peak of the cycle. I have no data on book value, debt, or promoter holding, so I cannot judge the balance sheet conservatism that I insist on. Dividend yield is zero, so the return depends entirely on price appreciation and commodity prices. I would treat this as a cyclical, not a compounding stalwart. The latest quarter earned ₹8 Cr on ₹105 Cr sales, a 7.6% margin; that is decent, but not a wide-moat margin. I would only buy with the understanding that steel and manganese prices will move against you someday. Watch quarterly margins and debt levels carefully. There is some quantitative appeal here, but qualitative safety is missing.

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