Atul Auto (ATULAUTO)

FairStock Score: 35/100 — MIXED

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

Key Financials

Strengths

• Sales growth of 18.40% and profit growth of 111.10% show strong recent demand and operating leverage.
• PEG of 0.60 suggests the high P/E may be less punitive if the growth can be sustained.
• Piotroski F-score of 7/9 points to reasonable earnings quality and financial health.
• Latest quarter's ₹15 Cr net profit on ₹231 Cr sales shows the business is currently operating profitably.

Concerns

• P/E of 38.62 is rich, especially with ROE of only 10.83% and ROCE of just 6.48%.
• Zero dividend yield means minority shareholders receive no cash return while waiting for growth.
• P/B of 3.15 leaves little margin of safety if the Commercial Vehicle cycle turns down.
• FairStock Score of 33/100 flags the stock as risky, and the 52-week range shows meaningful price volatility.

AI Analysis

As a Graham-Buffett investor, my first question is not 'how fast is it growing?' but 'can the business earn decent returns on capital, and am I being offered a margin of safety?' Atul Auto's recent numbers are eye-catching: sales are up 18.40%, profit is up 111.10%, and the latest quarter delivered ₹15 Cr net profit on ₹231 Cr sales. A Piotroski F-score of 7/9 also suggests the reported earnings are not just accounting noise. But I never pay 38.62 times earnings and 3.15 times book value merely for a good quarter. The underlying economics remain ordinary: ROE is 10.83% and ROCE is just 6.48%. That is not a wide-moat franchise; it looks like a commercial-vehicle business enjoying cyclical tailwinds. The PEG ratio of 0.60 looks seductive, but PEG only works if today's growth is genuinely sustainable and not borrowed from the next downturn. With zero dividend yield, the minority shareholder gets no direct return while waiting. Promoter holding of 42.70% shows alignment, but it is far from a controlling vote for minority interests. FairStock's 33/100 risky score reinforces my caution. I would need several more quarters of proof that margins, ROCE, and ROE have moved structurally higher before I could consider this a compounder. A high-growth cyclical at a high multiple is not the same as a wonderful business at a fair price.

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