ARC Insulation (ARCIIL)

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

Key Financials

Strengths

• ROCE of 52.61% indicates highly efficient use of capital
• Low P/E of 6.09 offers apparent cheap valuation if earnings are sustainable
• Promoter holding at 64.51% provides ownership alignment
• Latest quarter is profitable with ₹1 Cr net profit on ₹10 Cr sales, a 10% net margin

Concerns

• Piotroski F-Score of 3/9 signals weak financial health
• Zero sales and profit growth means there is no compounding engine
• No dividend yield, so returns depend entirely on uncertain price appreciation
• Missing book value, debt/equity, and ROE data; the P/E implies ~₹8.5 Cr earnings while the latest quarter annualises to only ~₹4 Cr

AI Analysis

When I look at ARC Insulation, I look first for a business I can understand and a return I can trust. The market cap is only ₹52 crore and the reported P/E is 6.09. That seems cheap. ROCE at 52.61% is genuinely impressive, and the latest quarter shows sales of ₹10 crore with net profit of ₹1 crore, a 10% margin. Promoter holding at 64.51% also suggests owners are still invested. Good signs. But Benjamin Graham taught me not to accept a pretty multiple without hard evidence. Here the evidence is thin. Sales growth and profit growth are both flat at 0.00%. There is no dividend yield, so the only reward is a future buyer paying more. The Piotroski F-Score is only 3 out of 9, which is a red flag for financial health. I have no book value, no debt-equity ratio, no ROE, and the FairStock score says insufficient data. Worse, the numbers do not fully agree: a P/E of 6.09 on a ₹52 crore market cap implies annual earnings of about ₹8.5 crore, but the latest quarter profit of ₹1 crore annualises to just ₹4 crore. One of these figures is not telling the whole story. A zero-growth, no-dividend business with questionable earnings quality is not a compounder. It may be cheap for a reason. The high ROCE could reflect a small capital base, not a durable moat. Industrial insulation is cyclical and competitive; without order flow data or a balance sheet, I cannot judge its staying power. This is exactly the kind of situation where a low price can trap the unaware investor. I would need clear evidence of improving earnings, better working capital, and honest reporting before I would consider buying. Until then, it sits in the too-hard pile.

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