Carraro India (CARRARO)
Fast GrowerFairStock Score: 38/100 — MIXED
Score breakdown: P/E: 1/3 · ROCE: 1/2 · Growth: 2/2 · Dividend: 0/1
Key Financials
| Current Price | ₹514.65 |
| Market Cap | ₹2,925.86 Cr |
| P/E Ratio | 22.02 |
| ROCE | 21.84% |
| ROE | —% |
| Dividend Yield | 1.29% |
| Profit Growth | 7.8% |
| Debt/Equity | 0.27 |
| Sales Growth | 10.5% |
| Promoter Holding | 68.77% |
| 52-Week Range | ₹416 — ₹667.55 |
| Sector | Auto Components |
| Book Value | ₹99.31 |
Strengths
- Strong operating return with ROCE at 21.84%
- Healthy balance sheet with debt/equity of only 0.37
- Robust recent growth: sales up 27.02% and profits up 141.58%
- High promoter holding of 68.77% aligns interests
- Piotroski F-Score of 7/9 indicates solid fundamentals
Concerns
- Valuation is rich: P/E of 25.46 and P/B of 6.42 versus book value of ₹86.72
- Profit growth of 141.58% may be from a low base and not sustainable
- Thin profitability: latest quarter net profit of ₹28 Cr on sales of ₹565 Cr
- Low dividend yield of 0.87% offers little downside support
AI Analysis
When I look at Carraro India, I see a business that has delivered impressive recent numbers but one where I must keep my feet firmly on the ground. Sales grew 27% and profits jumped 141.58%, which sounds wonderful, but a 141% profit growth often comes from a low base. The latest quarter shows net profit of only ₹28 Cr on sales of ₹565 Cr, meaning margins are thin. That is not the kind of earnings power I like to underwrite. The company earns a respectable ROCE of 21.84% and carries a manageable debt-to-equity of 0.37, so the balance sheet does not keep me awake at night. The Piotroski F-Score of 7 out of 9 also suggests decent financial health. However, I cannot ignore the price. At ₹556.55, I am paying 25.46 times earnings and 6.42 times book value. Book value is just ₹86.72 per share, so the market is pricing in a lot of future success. The promoter holding of 68.77% is encouraging, as their interests are aligned with mine, but high promoter holding also means limited public float and potential liquidity issues. The dividend yield of 0.87% is modest, and for a shareholder, cash returns matter. The PEG ratio of 0.30 looks attractive only if the recent growth is sustainable. As Graham would say, price is what you pay, value is what you get. I need more evidence that this growth is durable before I call it a wonderful business at a fair price.
Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer