Banaras Beads (BANARBEADS)

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

Key Financials

Strengths

• Low leverage: D/E 0.27 and book value ₹86.10 provide a downside cushion.
• Promoter holding of 58.14% aligns promoter interests with minority shareholders.
• Sales growth of 34.49% shows strong demand traction in the business.
• Piotroski F-Score of 7/9 indicates solid financial health with no immediate red flags.
• Dividend yield of 1.85% offers modest cash return while waiting.

Concerns

• ROE of 3.36% and ROCE of 7.76% are far too low for a quality compounder.
• P/E of 42.69 and PEG of 1.69 leave little margin of safety at current price.
• Profit growth of 16% is less than half of sales growth of 34.49%, suggesting margin compression.
• Market cap of ₹81 Cr and insufficient data make earnings reliability uncertain.

AI Analysis

As a value investor, my first test is whether the business earns high returns on capital while employing little debt. Banaras Beads fails that test. ROE is only 3.36% and ROCE is 7.76%, so the company earns a thin return on its equity base. This is not the hallmark of a wonderful, moat-protected franchise. The balance sheet is conservative—debt/equity is 0.27 and book value is ₹86.10—but low debt cannot compensate for low profitability. Promoter holding of 58.14% is a positive alignment, and the Piotroski F-Score of 7/9 suggests no obvious financial distress. The top line grew 34.49%, but profit grew only 16%. That gap tells me growth is real but low-quality; margins are being squeezed, and there is no clear pricing power. The latest quarter gives ₹8 Cr sales and ₹1 Cr profit, but one quarter should not be extrapolated. At ₹113, the market cap is ₹81 Cr, which works out to 42.69 times earnings and 1.31 times book value. The PEG of 1.69 also is not a bargain. For a business earning 3.36% ROE, that multiple is rich. The dividend yield of 1.85% provides modest compensation, but not enough margin of safety. With FairStock showing insufficient data, I would keep any idea in the penalty box until we see more consistent evidence. I would need to see ROE climb meaningfully and profit growth catch up with sales before paying this price. Until then, this is a small fast-grower on my watchlist, not a buy.

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