Aeroflex (AEROFLEX)
CyclicalFairStock Score: 24/100 — RISKY
Score breakdown: P/E: 0/3 · ROCE: 1/2 · Growth: 1/2 · Dividend: 0/1
Key Financials
| Current Price | ₹459.85 |
| Market Cap | ₹6,085.23 Cr |
| P/E Ratio | 89.29 |
| ROCE | 22.34% |
| ROE | 15.41% |
| Dividend Yield | 0.09% |
| Profit Growth | 158.2% |
| Debt/Equity | 0.02 |
| Sales Growth | 72.4% |
| Promoter Holding | 65.47% |
| 52-Week Range | ₹158 — ₹583.7 |
| Sector | Industrial Products |
| Book Value | ₹33.8 |
Strengths
- Very low debt-to-equity of 0.03 provides financial stability in a cyclical industry
- Healthy ROCE of 22.34% indicates efficient use of capital
- Sales growth of 21.13% shows recent demand traction
- Promoter holding of 65.47% aligns management with minority shareholders
Concerns
- P/E of 63.29 is extremely expensive for a steel products company with modest profit growth
- P/B of 12.27 vs book value of ₹24.11 leaves no margin of safety
- Profit growth of 8.42% significantly lags sales growth, suggesting margin compression
- Dividend yield of 0.13% offers negligible income to shareholders
AI Analysis
When I look at Aeroflex, I first ask: what am I buying at ₹295.75? A share of a steel products company with book value of just ₹24.11. That means I'm paying 12.27 times book for a business whose return on equity is 15.41%. Graham would call that a dangerous trade-off. The market is pricing Aeroflex as if it has a durable moat, but iron and steel is a cyclical, commodity business where margins are subject to forces beyond management's control. Yes, the balance sheet is clean with a debt-to-equity of only 0.03, and ROCE of 22.34% indicates efficient capital use. Sales grew 21.13%, but profit growth lagged at 8.42%—a tell-tale sign that pricing power is weak and costs are eating into the top-line gains. The latest quarter adds only ₹16 Cr net profit on ₹121 Cr sales, a margin that doesn't justify a P/E of 63.29. Even the dividend yield of 0.13% means I'm not being paid to wait. The Piotroski score of 7 suggests decent operational health, but the PEG ratio of 4.28 tells me growth is already fully discounted. With the stock at roughly 43% off its 52-week high of ₹521.50, the market has started to realize the cycle may be turning. I am a value investor, not a momentum trader. I need a margin of safety. At this price, I find none. I'd rather miss the upside than lose my capital. This is a cyclical business, and cycles turn—often when optimism is highest.
Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer