Aeroflex Enter. (AEROENTER)

FairStock Score: 53/100 — MIXED

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

Key Financials

Strengths

• Low leverage with Debt/Equity of 0.05 gives financial stability
• Piotroski F-Score of 7/9 indicates recent financial health is decent
• Sales growth of 21.69% and profit growth of 14.49% show business expansion
• ROCE of 13.76% suggests operating efficiency is respectable
• Promoter holding of 51.59% aligns interests with minority shareholders

Concerns

• ROE of only 2.10% is very low for a stock trading at P/B of 2.79
• P/E of 17.24 and dividend yield of 0.38% offer limited margin of safety
• Profit growth is slower than sales growth, indicating possible margin pressure
• Iron and steel is highly cyclical, with earnings vulnerable to price swings

AI Analysis

When I look at Aeroflex, I first ask what kind of business I am buying. Iron and steel is a commodity business, where prices are driven by capacity, demand and global cycles; there is little durable pricing power. The numbers confirm this. The company reports sales growth of 21.69% and profit growth of 14.49%, but return on equity is only 2.10%. That is far below what a shareholder should accept for bearing cyclical risk. A P/E of 17.24 and P/B of 2.79 on a book value of ₹32.05 means the market is paying a rich multiple for a business that earns roughly ₹2 per ₹100 of equity. The ROCE of 13.76% shows the operating side is healthier, and debt/equity of 0.05 is conservative, so the company is not gambling with borrowed money. Piotroski F-Score of 7/9 suggests recent financial health is okay. Promoter holding at 51.59% is decent; aligned but not absolute. Yet the dividend yield of just 0.38% means I am not getting paid to wait. Profit growth of 14.49% is slower than sales growth, so margin pressure is visible. Latest quarter sales of ₹191 Cr and net profit of ₹25 Cr gives a 13% margin, but one quarter is not a trend. Price at ₹89.41 is 40% below the 52-week high, but I do not buy simply because a stock has fallen. With PEG of 0.95, growth seems reasonably priced if it continues, but for a cyclical steel player, I need a margin of safety. At a P/B near 2.8 and ROE near 2%, I am not seeing enough earnings power to compensate for cyclicality. I would keep it on my watchlist and demand either a lower price or evidence that ROE can move much higher.

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