Apar Inds. (APARINDS)

FairStock Score: 61/100 — STEADY

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

Key Financials

Strengths

• High ROE of 21.62% and ROCE of 32.70% indicate strong capital efficiency and competitive positioning.
• Low debt/equity of 0.15 and free cash flow of ₹586 Cr provide financial resilience.
• Consistent growth: 5-year revenue CAGR of 23.81%, with latest quarter sales of ₹5,480 Cr and net profit of ₹209 Cr.
• Promoter holding of 57.77% aligns interests with minority shareholders; Piotroski F-Score of 8/9 supports balance sheet quality.
• Altman Z-Score of 5.23 suggests low bankruptcy risk.

Concerns

• Valuation is extremely stretched: P/E of 45.29 and P/B of 10.55 versus DCF value of ₹7,801.06 and Graham Number of ₹2,503.69, leaving a margin of safety of -346.56%.
• PEG ratio of 4.91 implies the market is paying far too much for the current profit growth rate of 20.55%.
• Dividend yield of just 0.46% means total returns depend almost entirely on continued price appreciation and multiple expansion.
• EV/EBITDA of 13.82 is not inexpensive; any slowdown in growth could trigger a sharp de-rating.

AI Analysis

Looking at Apar Inds., I am reminded of a wonderful business selling at a price that leaves me cold. The operating metrics are exceptional: ROCE 32.70%, ROE 21.62%, with debt/equity just 0.15. Sales have compounded at 23.81% over five years, and the latest quarter shows ₹5,480 Cr revenue and ₹209 Cr net profit. This is an efficient, growing enterprise with free cash flow of ₹586 Cr and an Altman Z-score of 5.23, so financial distress is not the issue. Promoters own 57.77%, aligning with minority owners, and the Piotroski score of 8/9 confirms solid fundamentals. But investing is about price, and here the arithmetic fails. At ₹11,829.15, the market capitalises Apar at ₹44,910 Cr, about 45 times earnings. Graham's number suggests an intrinsic value of ₹2,503.69, while the DCF estimate is ₹7,801.06. Even using the more generous DCF, I would be paying a significant premium and earning a negative margin of safety. The PEG ratio of 4.91 tells me the growth is more than fully priced. The dividend yield of 0.46% is hardly compensation for that risk. I do not criticise the company; I criticise the price. Apar is a fast grower with visible strengths, but in Mr. Market's current enthusiasm, the margin of safety has disappeared. My discipline says wait for a price that gives me room for error. Until the gap between price and intrinsic value narrows, I will watch from the sidelines, ready to act if Mr. Market becomes less optimistic.

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