Addictive Learn (ADDICTIVE)

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

Key Financials

Strengths

• ROCE of 25.13% indicates strong capital efficiency
• Promoter holding of 65.10% aligns management interests with minority shareholders
• Latest quarter sales of ₹41 Cr and net profit of ₹5 Cr imply a healthy quarterly margin of about 12%
• Market cap of ₹168 Cr is modest, offering scope for scalability if growth returns

Concerns

• Sales growth is just 1.30% and profit growth is negative at -17.75%, showing stagnation
• PEG ratio of 14.81 makes the valuation expensive relative to its minimal growth
• Piotroski F-Score of 4/9 points to weak financial health
• No dividend, and missing book value/debt data prevent a full margin-of-safety assessment

AI Analysis

The company earns a return on capital employed of 25.13%, which would ordinarily interest me. But in Graham's idiom, a good business at a fair price still needs growth to justify the price. Here, sales growth is only 1.30% and profits have fallen by 17.75%. At ₹88.20, the market capitalizes the company at ₹168 Cr, or 19.25 times earnings. For a business whose earnings are shrinking, that multiple gives me little margin of safety. The PEG ratio of 14.81 screams overvaluation relative to growth. A Piotroski F-score of 4 out of 9 reinforces my caution; the financial health is not robust. The latest quarter shows sales of ₹41 Cr and net profit of ₹5 Cr, a decent quarterly margin, but one quarter doesn't make a trend. Promoter holding is 65.10%, which aligns interests, and no dividend means the small shareholder depends entirely on capital appreciation. Without book value and debt-equity data, I cannot do the balance-sheet audit Graham insisted upon. I would classify this as a slow grower at best, and a possible value trap if growth doesn't revive. I'd wait for a lower price, or evidence that revenue growth has reaccelerated and margins are holding. As Buffett might say, it's far better to buy a wonderful business at a fair price than a fair business at a wonderful price—but this is a fair business at an unremarkable price, with signs of deterioration. I'll keep it on the watchlist, not in the portfolio.

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