Balaji Amines (BALAMINES)

FairStock Score: 28/100 — RISKY

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

Key Financials

Strengths

• Very low leverage with debt/equity of 0.02, providing strong financial stability
• Promoter holding of 54.59% aligns management interests with minority shareholders
• Sales are still growing at 5.94%, and latest quarter sales of ₹331 Cr indicate an operating base
• Stock is trading much closer to its 52-week low of ₹968.10 than its high of ₹2,443.15

Concerns

• Profit growth is negative at -5.30%, while valuation remains expensive at P/E of 24.46
• PEG ratio of 4.12 suggests the growth rate does not justify the earnings multiple
• Piotroski F-Score of 4/9 indicates weak fundamental health and deteriorating profitability
• ROE of 9.07% and ROCE of 11.00% are unimpressive for a specialty chemicals business

AI Analysis

This is not the kind of business that would excite Mr. Buffett. Balaji Amines earns a modest return on equity of 9.07% and a return on capital employed of 11% — hardly a compounding machine. I prefer businesses that generate high returns on tangible capital; this one barely clears the cost of capital. Growth is sluggish: sales grew just 5.94%, while profits actually fell 5.30%. At ₹1,241.30, the stock trades at a P/E of 24.46 — a rich price for a business with negative profit growth. The PEG ratio of 4.12 reinforces my concern: you are paying over four times the growth rate, and that growth is already weak. To be fair, the balance sheet is conservative, with debt/equity of just 0.02, and promoter holding of 54.59% does align interests with minority shareholders. But a clean balance sheet is not a margin of safety when the price is still high. Book value is ₹500.65, so the stock trades at 2.48 times book. The Piotroski F-Score of 4 out of 9 points to deteriorating fundamentals. The latest quarter shows net profit of ₹31 Cr on sales of ₹331 Cr — a reasonable margin, but not evidence of a wide moat. The stock has fallen from ₹2,443.15 to ₹1,241.30, but a falling knife is not automatically cheap. The dividend yield of 1.01% offers little comfort. In Graham's language, this is a business of average quality at a price that demands above-average performance. I need a bigger margin of safety — either a much lower price or clear evidence that returns and profit growth are turning around. Until then, I pass.

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