Aaron Industries (AARON)

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

Key Financials

Strengths

• Strong sales growth of 26.57% shows demand traction
• ROCE of 18.62% indicates decent capital efficiency
• Piotroski F-Score of 7/9 suggests solid financial health
• High promoter holding of 73.06% aligns interests with minority shareholders
• Manageable debt-to-equity of 0.72

Concerns

• P/E of 46.87 and PEG of 2.42 imply expensive valuation relative to growth
• Profit growth of 12.22% lags sales growth, indicating margin compression
• Dividend yield of only 0.37% offers little income support
• Stock is down significantly from its 52-week high of ₹258, reflecting volatility

AI Analysis

When I look at Aaron Industries, I see a small industrial player growing its top line at a healthy 26.57%, which certainly catches my eye. But as Graham taught me, growth is only half the story; the price you pay determines your return. At ₹141.01, the market is asking for a P/E of 46.87 and a P/B of 6.64 against a book value of just ₹21.25. That is a rich price for a company whose profit growth is only 12.22% — meaning sales are growing more than twice as fast as earnings. That gap tells me margins are under pressure, and that is a red flag I cannot ignore. The latest quarter shows sales of ₹23 Cr and net profit of ₹2 Cr, which annualizes to roughly ₹8 Cr — making the market cap of ₹338 Cr look demanding. The balance sheet is acceptable with debt-to-equity at 0.72, and a Piotroski score of 7/9 suggests operational discipline. Promoter holding of 73.06% is reassuring; I like owners who eat their own cooking. ROCE of 18.62% is decent, though not extraordinary. But with a PEG of 2.42, the market is pricing in perfection. A 52-week range of ₹106.80 to ₹258.00 shows how volatile this stock has been — I prefer calm compounding over wild swings. At this valuation, I would not be a buyer; the margin of safety is absent. I would wait for a better price or evidence that margins are expanding before parking my capital here.

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