Aarvi Encon (AARVI)

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

Key Financials

Strengths

• Revenue growth of 27.2% and profit growth of 96.2% show strong recent momentum
• PEG of 0.19 and P/E of 11.59 suggest the market is pricing in very modest expectations
• Debt/Equity of 0.24 provides financial flexibility and lowers bankruptcy risk
• Piotroski F-Score of 7/9 points to solid fundamental health
• Promoter holding of 73.53% aligns management interests with minority shareholders

Concerns

• Latest quarter net profit of ₹4 Cr on sales of ₹167 Cr implies a thin 2.4% margin, leaving little room for error
• ROCE of 10.82% is moderate and does not signal a high-return franchise
• 96% profit growth may be on a low base and may not be sustainable
• Small market cap of ₹193 Cr could mean lower liquidity and higher volatility

AI Analysis

Looking at Aarvi Encon, I'm reminded that cheap can be justified, but only when numbers tell a sober story. At ₹132.62, the market capitalisation is only ₹193 crore, so this is a small-cap, and I must demand more margin of safety. The trailing P/E of 11.59 is attractive versus the 27.2% sales growth and 96.2% profit growth. A PEG of 0.19 is strikingly low. Graham would say the price is not excessively above asset value: P/B 1.48 versus book value ₹89.32. Debt/equity at 0.24 is manageable. Piotroski F-score of 7/9 lends some confidence that the reported improvements are not pure accounting noise. But I must keep my enthusiasm in check. ROCE of 10.82% is moderate, not a hallmark of a wonderful business. The latest quarter shows ₹167 crore in sales but only ₹4 crore in net profit—a thin 2.4% margin. That means any rise in costs or a delayed project can squeeze earnings violently. The 96% profit growth, therefore, is a high percentage on a low base; it needs to be sustained before I call it a compounding machine. The moat is not evident from the figures. A diversified commercial services company often competes on relationships and price, not pricing power. Promoter holding at 73.53% is positive, but small-caps with low float need monitoring for governance. The valuation is not expensive, but I buy quality, and here I see a fast grower at a reasonable price, not a great business at a wonderful price. I would want several more quarters of margin stability and order book visibility before committing a large sum.

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