Acutaas Chemical (ACUTAAS)

FairStock Score: 53/100 — MIXED

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

Key Financials

Strengths

• Near-zero debt (D/E 0.01) provides strong financial stability
• High returns on capital: ROE 24.26% and ROCE 19.92%
• Exceptional growth: sales +42.98%, profit +140.18%, 5-year revenue CAGR 24.18%
• PEG of 0.67 suggests valuation is reasonable if growth persists
• Piotroski F-Score of 7/9 indicates decent overall financial health

Concerns

• High absolute valuation: P/E 61.59 and P/B 16.45 leave little margin of safety
• Negative free cash flow of ₹-106 Cr means earnings are not yet converting into owner cash
• Low promoter holding of 32.66% reduces alignment with minority shareholders
• Nominal dividend yield of 0.07%; returns depend almost entirely on future growth

AI Analysis

At first glance, Acutaas Chemical is the kind of business that wakes up a value investor's curiosity. A debt/equity of 0.01 is almost a fortress balance sheet, and ROE of 24.26% with ROCE of 19.92% tells me capital is being put to work sensibly. The company is growing fast—sales up 42.98% and profit up 140.18%, with a five-year revenue CAGR of 24.18%. The latest quarter shows sales of ₹393 Cr and net profit of ₹106 Cr, so momentum is real. On a PEG of 0.67, the market seems to believe growth will continue. But I have to slow down. Graham taught me to weigh facts, not emotions. The stock trades at ₹2,386.55, a P/E of 61.59 and a P/B of 16.45 against book value of ₹145.12. That is not a bargain price; it is a premium for a pharma growth story. Free cash flow is negative at ₹-106 Cr. Earnings may be on paper, but cash is not following yet. In a high-growth business that can be tolerable for a while, but it demands careful watch. The promoter holding of only 32.66% bothers me. In India, I want promoters to have a serious ownership stake and think like shareholders. A dividend yield of 0.07% is negligible, so minority investor return depends completely on price appreciation and reinvested growth. I will not dismiss it. A Piotroski score of 7/9 suggests solid fundamentals, and the debt-light structure is genuinely good. But with the stock down from ₹3,735 yet still expensive on earnings and book value, I need a margin of safety. If the company can convert growth into free cash flow and maintain momentum, it could become a wonderful business. At today's price, I would classify it as a fast grower, not a value buy.

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