Butterfly Gan Ap (BUTTERFLY)

FairStock Score: 39/100 — MIXED

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

Key Financials

Strengths

• Near-zero debt: D/E of 0.03 provides a strong balance sheet cushion
• 75% promoter holding aligns management interests with minority shareholders
• Piotroski F-Score of 7/9 suggests sound earnings quality and financial health
• ROE of 14.08% and ROCE of 15.04% are respectable for a consumer brand
• Profit growth of 43.68% shows meaningful recent margin/cost improvements

Concerns

• Top-line growth is weak at 2.66%, making the 43.68% profit jump hard to sustain
• Valuation is not cheap: P/E 24.23 and P/B 3.61 with zero dividend yield
• Latest quarter net margin is only about 4.5% (₹11 Cr on ₹245 Cr), leaving little room for competitive pressure
• FairStock Score of 41/100 reflects mixed fundamentals and no clear margin of safety

AI Analysis

Let me first ask whether this is a business I understand and at a price that leaves a margin of safety. Butterfly Gan Ap is a household appliance player, a decent niche but one where competitive forces are intense. The numbers tell me the balance sheet is conservative: debt-equity is only 0.03, so financial risk is low. Return on equity of 14.08% and ROCE of 15.04% are respectable, but not the kind of exceptional returns I want from a franchise. Promoter holding of 75% aligns ownership with management, which I like. What bothers me is the divergence between sales and profit. Sales are growing only 2.66%, yet profits jumped 43.68%. That could be good cost control, but it could also be a one-time gain or unsustainable margin expansion. The latest quarter shows sales of ₹245 Cr and net profit of ₹11 Cr, a margin under 5%—thin for a consumer durable business. A P/E of 24.23 and P/B of 3.61 are not bargain prices. With no dividend, I am asked to rely entirely on future earnings growth. The PEG of 1.05 only looks reasonable if the 43.68% profit growth continues, and I have little evidence revenue can support that. Piotroski score of 7/9 suggests decent financial strength, but the FairStock Score of 41 is mixed. The 52-week range shows the price has fallen from ₹823 to ₹616, so the market has already cooled on it. At ₹616, I get a decent, conservatively financed company, but not a great one at an obvious discount. I would need sustained sales acceleration and stable margins before I can call this a wonderful business at a fair price. For now, it sits on my watch-list rather than in my shopping cart.

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