Avonmore Capital (AVONMORE)

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

Key Financials

Strengths

• Latest quarter momentum: sales ₹54 Cr and net profit ₹15 Cr
• Conservative balance sheet: debt/equity only 0.05
• Promoter holding of 58.46% aligns management with minority shareholders
• Piotroski F-Score of 7/9 indicates improving fundamentals
• Sales growth of 52.79% shows business expansion

Concerns

• ROE is only 1.23%, yet price/book is 2.49 times — valuation expects much better returns than today's reality
• 1000% profit growth and PEG of 0.03 are likely low-base artifacts, not durable growth signals
• Zero dividend yield means shareholders get no income while waiting for a turnaround
• P/E of 17.91 offers limited margin of safety for an NBFC with weak return on equity

AI Analysis

At ₹12.36, Avonmore is a small ₹412 Cr NBFC. My first test is always: can I understand the business, and does the price give me margin of safety? Book value is ₹4.97, so I am paying 2.49 times book for a business earning just 1.23% on equity. That fails Graham's discipline. A low ROE means equity capital is not being deployed productively; buying it at a premium only makes the hurdle higher. The latest quarter looks impressive: sales ₹54 Cr and net profit ₹15 Cr, with 52.79% sales growth and 1000% profit growth. But I have lived long enough to distrust 1000% profit growth. It usually comes off a tiny base. The PEG of 0.03 is a statistical illusion, not a green signal. One strong quarter does not create a durable franchise. What I like is financial conservatism: debt/equity is only 0.05, and the Piotroski score of 7/9 suggests the company's fundamentals are strengthening. Promoters hold 58.46%, so their interests are aligned with mine. There is no dividend, however; I get no income while waiting. This is a possible turnaround, not yet an established compounder. The 52-week range of ₹9.22 to ₹23.90 tells me this stock is volatile and sentiment-driven. FairStock's 'insufficient data' verdict is appropriate. I would rather miss a speculative bounce than overpay for a low-return NBFC at 17.91 times earnings. If the company continues to earn ₹15 Cr quarterly and ROE climbs meaningfully, I'll revisit. Until then, this is on my watchlist, not my buy list.

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