Azad Engineering (AZAD)
Fast GrowerFairStock Score: 14/100 — RISKY
Score breakdown: P/E: 0/3 · ROCE: 1/2 · Growth: 2/2 · Dividend: 0/1
Key Financials
| Current Price | ₹2,717.8 |
| Market Cap | ₹17,552.03 Cr |
| P/E Ratio | 126.59 |
| ROCE | 12.23% |
| ROE | 18.02% |
| Dividend Yield | 0% |
| Profit Growth | 21.3% |
| Debt/Equity | 0.31 |
| Sales Growth | 25.9% |
| Promoter Holding | 55.84% |
| 52-Week Range | ₹1,360 — ₹2,986.4 |
| Sector | Electrical Equipment |
| Book Value | ₹236.65 |
Strengths
- Sales growing 31.38% and profit growing 40.14% show strong momentum.
- Low debt-to-equity of 0.21 keeps the balance sheet conservative.
- Promoter holding of 55.84% aligns interests with minority shareholders.
- Piotroski F-Score of 7/9 suggests sound financial health and improving operations.
- Healthy ROE of 18.02% indicates good return on equity capital.
Concerns
- Absurd valuation: P/E of 89.91 and P/B of 19.96 leave no margin of safety.
- ROCE of 12.23% is modest relative to the premium price paid for growth.
- Zero dividend yield means shareholders get no cash return while waiting.
- PEG ratio of 2.51 suggests growth is already fully discounted by the market.
AI Analysis
Looking at Azad Engineering, I see a business growing at an impressive clip—sales up 31.38% and profit up 40.14%—with a Piotroski score of 7 out of 9, suggesting fundamentals are improving rather than deteriorating. The balance sheet is conservative, with debt-to-equity of just 0.21 and promoter holding at 55.84%, which aligns interests and reduces governance worries. ROE of 18.02% is healthy, although ROCE of only 12.23% tells me this is not a phenomenal capital compounder at the operating level; it is a good business, not a great one. The great difficulty is price. At ₹2,108.55, the market cap is ₹11,064 Cr against a trailing P/E of 89.91 and P/B of 19.96. That implies enormous expectations. Even with 40% profit growth, the PEG ratio of 2.51 means the valuation already prices in years of flawless execution. The company pays zero dividend, so the investor receives no cash while waiting. Annualizing the latest quarter's net profit of ₹34 Cr gives a run-rate near ₹136 Cr, which still leaves the stock at over 80 times that run-rate. Benjamin Graham taught me to pay a fair price for a good business, not a visionary price for a good business. This may be a fast grower, but as an investor, I need a margin of safety. At this price, the risk-to-reward is unfavorable. I would watch it, but I would not buy it today.
Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer