Fractal Industries (544707)

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

Key Financials

Strengths

• ROCE of 29.79% indicates strong capital efficiency
• Latest quarter net margin of ~16.7% (₹4 Cr profit on ₹24 Cr sales) is respectable
• Price-to-earnings of 22.61 is not extreme if earnings quality and growth improve
• Small market cap of ₹171 Cr leaves room for niche growth if execution improves

Concerns

• Piotroski F-Score of 3/9 flags weak financial health and possible earnings quality issues
• Sales growth and profit growth are both 0.00%, showing a stagnant business
• P/E of 22.61 with zero growth is expensive for a no-growth garments company
• No dividend, no book value, and missing debt/equity data prevent any margin-of-safety calculation

AI Analysis

Looking at Fractal Industries, I am immediately struck by what I don't know. The page tells me price ₹218.05, market cap ₹171 Cr, P/E 22.61, and ROCE 29.79%. But book value, debt-to-equity, ROE, promoter holding are all missing. In Graham's language, an investor cannot compute a margin of safety without the balance sheet. A Piotroski F-score of 3 out of 9 is a loud warning; it suggests weak financial health, deteriorating operations, or poor earnings quality. I would want to dig deep before putting any money at risk. The operating side is not without merit. ROCE of 29.79% is genuinely impressive—this business generates strong returns on capital employed. Latest quarter sales of ₹24 Cr and net profit of ₹4 Cr imply a net margin of about 16.7%, which is respectable for a garments and apparels company. But the growth picture is flat: sales growth 0.00% and profit growth 0.00%. A no-growth business with a P/E of 22.61 is demanding a high price for stagnation. The market seems to be paying for quality that hasn't shown up in the income statement's growth line. Also, the stated P/E implies annual earnings around ₹7.6 Cr, yet the latest quarter alone shows ₹4 Cr profit. That mismatch needs explanation—seasonality or one-offs. And there is no dividend; shareholders rely entirely on price appreciation. In Buffett's terms, this is not a wonderful business at a fair price. It might be an average business with an uncertain balance sheet at a rich price. For a retail investor, the absence of reliable data is itself a red flag. I would wait for more numbers, especially debt, book value, and cash flow, before any decision. The price must offer a clear discount to intrinsic value; today, I cannot calculate that value. Hence, I stay patient and file this under 'too hard.'

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