Balmer Lawrie (BALMLAWRIE)

FairStock Score: 37/100 — MIXED

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

Key Financials

Strengths

• Strong balance sheet with debt-to-equity of just 0.12 and a Piotroski F-Score of 7/9
• Healthy returns with ROE of 17.17% and ROCE of 14.82%
• Attractive dividend yield of 4.69% provides income support at current price
• Reasonable earnings multiple of 11.61 times with latest quarter net profit of ₹65 crore
• Low leverage gives financial flexibility in uncertain times

Concerns

• Very low growth: sales growth of 4.22% and profit growth of 3.30%
• PEG ratio of 3.09 suggests the stock is expensive relative to its growth rate
• Zero promoter holding raises concerns about ownership alignment and governance
• Price-to-book of 2.25 against book value of ₹79.93 leaves a thin margin of safety

AI Analysis

When I look at Balmer Lawrie, I see a business with a respectable return on equity of 17.17% and return on capital employed of 14.82%, supported by a very conservative debt-to-equity ratio of just 0.12. The Piotroski F-Score of 7 out of 9 also tells me the financial position is solid. At ₹179.95, the stock trades at 11.61 times earnings and offers a dividend yield of 4.69%, which gives me some comfort while waiting. Book value is ₹79.93, so I am paying 2.25 times book. That is not a bargain price in the Graham sense. However, this is not a compounding machine. Sales growth is just 4.22% and profit growth only 3.30%. With a PEG ratio of 3.09, the market is asking me to pay a full price for very modest expansion. The latest quarter shows sales of ₹657 crore and a net profit of ₹65 crore — steady, but hardly exciting. The zero promoter holding is a concern. In India, I prefer owners with skin in the game. Without that alignment, I worry about capital allocation and governance over the long run. A diversified business like this can earn good returns today, but I need a durable competitive moat to be confident about tomorrow. The FairStock Score of 37 out of 100 reinforces my caution. I respect the balance sheet, but I do not chase mediocre growth at 2.25 times book. This looks like a Slow Grower to me — one that I would only buy at a more attractive price or with clearer evidence that growth will improve.

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