Banswara Syntex (BANSWRAS)

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

Key Financials

Strengths

• At ₹121.25, the price is below book value of ₹156.51 per share, giving a P/B of 0.77 and a margin of safety
• Piotroski F-Score of 7/9 indicates recent improvement in financial health and profitability
• Promoter holding of 54.19% aligns majority owners with minority shareholders
• Debt/equity of 0.90 is moderate for a capital-intensive textile company
• Profit growth of 38.07% and PEG ratio of 0.54 suggest the earnings rebound may not be fully priced

Concerns

• ROE of 4.45% and ROCE of 7.39% show weak returns on invested capital, implying a weak moat
• Sales growth of just 0.31% means the topline is stagnant; earnings growth may be cyclical, not structural
• Dividend yield of only 0.87% provides little income while waiting for a re-rating
• Textile industry remains commodity-like and competitive, so margin gains can reverse quickly

AI Analysis

At first glance, Banswara Syntex looks like the kind of cigar-butt Graham might examine. The market prices it at ₹121.25 against book value of ₹156.51, so I get ₹156.51 of equity for about 77 paise in the rupee. But I must ask whether that book value earns a decent return. It does not. ROE is only 4.45% and ROCE is 7.39%, so this is a business that ties up large capital for mediocre returns. That is not a franchise with pricing power; it is a commodity textile operation. Debt/equity of 0.90 is manageable, but it takes away from the protection that book value otherwise offers. Promoters holding 54.19% is a plus. Sales growth of 0.31% is nearly flat, yet profit grew 38.07%. In my experience, that kind of divergence is usually a cyclical margin recovery, not durable growth. Trailing P/E of 15.37 on roughly ₹25.6 crore net profit is not expensive, and the PEG ratio of 0.54 makes the rebound look attractive. But I value companies on sustainable earning power, not one rebound quarter. The latest quarter shows ₹340 crore sales and ₹14 crore net profit, which is encouraging, but I need to see this repeated before paying a growth multiple. The Piotroski score of 7/9 suggests improving financial health, which I like. Still, I would not buy a mediocre business solely because it is cheap. At 0.77 times book, there is a margin of safety if the assets are real and debt does not increase. But without meaningful sales growth or higher returns on capital, this remains a cyclical asset play rather than a compounding machine. If the cycle turns down, the low P/B provides cushion; if it continues recovering, the low P/E offers upside. I would watch debt, margins, and return on capital before acting.

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