Kasturi Metal (544688)

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

Key Financials

Strengths

• ROCE of 16.34% indicates decent capital efficiency for a small steel products company.
• Piotroski F-Score of 7/9 suggests sound balance-sheet health and operational discipline.
• Latest quarter net margin of about 6% (₹2 Cr profit on ₹32 Cr sales) is respectable.
• Profit grew 9.46% despite negligible sales growth, showing some cost control or operating leverage.

Concerns

• P/E of 28.06 with sales growth of only 0.72% makes the valuation rich; PEG of 3.86 confirms expensive relative to growth.
• Zero dividend yield means shareholders get no income while waiting for uncertain capital appreciation.
• Insufficient data on debt/equity, book value, ROE, and promoter holding weakens any margin-of-safety assessment.
• Iron and steel is inherently cyclical; low top-line growth and high P/E leave little room for a downturn.

AI Analysis

At ₹61, Kasturi Metal has a market capitalisation of only ₹63 crore. That is a small, commodity-steel business, and my first rule is to avoid businesses I cannot understand or assess. The numbers here do not give me a clear margin of safety. The P/E is 28.06, while sales growth is barely 0.72%. A PEG ratio of 3.86 tells me I am paying nearly four rupees for every one rupee of profit growth. That is not a bargain; that is optimism. Profit growth of 9.46% is nice, but for a cyclical steel producer, today's profits can quickly reverse. ROCE at 16.34% is respectable, and a Piotroski F-score of 7/9 suggests the company has managed its balance sheet sensibly, but I do not know its debt/equity, return on equity, or promoter holding. Without book value, I cannot calculate the downside. The latest quarter shows sales of ₹32 crore and net profit of ₹2 crore, a net margin around 6%. That is decent, but one quarter is not a durable earnings stream. The company pays no dividend, so the investor's only return is price appreciation, and with growth this slow, appreciation must come from re-rating, not compounding. This is a cyclical small-cap in a tough industry. In Buffett's words, be fearful when others are greedy. A P/E of 28 with almost no top-line growth is greed, not analysis. I would put this in the 'too hard' pile unless price falls to a level where even average future earnings justify the purchase, or until I have audited financials showing strong returns on tangible capital and a clear competitive position. For now, no margin of safety.

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