Bharat Gears (BHARATGEAR)
CyclicalScore breakdown: P/E: 2/3 · ROCE: 0/2 · Growth: 2/2 · Dividend: 0/1
Key Financials
| Current Price | ₹103.28 |
| Market Cap | ₹158.59 Cr |
| P/E Ratio | 10.56 |
| ROCE | 1.88% |
| ROE | 10.75% |
| Dividend Yield | 0.97% |
| Profit Growth | -90.7% |
| Debt/Equity | 0.56 |
| Sales Growth | 19.9% |
| Promoter Holding | 55.33% |
| 52-Week Range | ₹83.8 — ₹154.2 |
| Sector | Auto Components |
| Book Value | ₹85.44 |
Strengths
- Promoter holding of 55.33% shows strong insider alignment.
- Recent sales growth of 33.27% and profit growth of 124.98% show momentum, with a PEG of 0.16 optically cheap.
- Piotroski F-Score of 7/9 indicates decent financial health and low bankruptcy risk.
- Debt/equity of 0.64 is moderate, and book value of ₹80.65 provides some downside support at P/B of 1.35.
Concerns
- ROCE of just 1.88% is very low, signaling poor return on total capital employed.
- Latest quarter net profit of ₹3 Cr on sales of ₹189 Cr implies a razor-thin net margin near 1.6%.
- Zero dividend yield means investors get no income while waiting for a turnaround.
- Auto components is cyclical, and the sharp profit growth may be a low-base recovery rather than durable compounding.
AI Analysis
Let me look at Bharat Gears with a cold eye. A ₹164 crore company at ₹109 per share, with a P/E of 12.47 and a P/B of 1.35, sounds like a small-cap that might interest a bargain hunter. But my first question is always: what is the real earning power? The latest quarter tells me sales were ₹189 crore and net profit only ₹3 crore — a net margin of barely 1.6%. That is not a wonderful business; it is a cyclical manufacturer struggling to earn a decent return on capital. ROE of 10.75% looks acceptable, but ROCE of 1.88% is a red flag: the company is not earning a good return on the total capital it employs. The managed balance sheet helps — debt/equity of 0.64 is moderate and the Piotroski F-Score of 7/9 suggests no obvious financial distress. Promoters holding 55.33% is good alignment. Sales growth of 33.27% and profit growth of 124.98% look exciting, but I must ask whether this is a durable trend or a low-base recovery in an auto down-cycle. At the 52-week range of ₹83.80 to ₹154.20, today's ₹109.20 is not a screaming bargain. Zero dividend adds no comfort. I would not call this a predictable compounder. It may be an improving cyclical, but only if margins and ROCE rise meaningfully and stay up. With the P/E optically low, the market is pricing in earnings recovery; I need evidence before I invest.
Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer