Cedaar Textile (CEDAAR)

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

Key Financials

Strengths

• P/E of 3.86 and ₹42 Cr market cap look statistically cheap versus quarterly sales of ₹81 Cr and net profit of ₹4 Cr.
• ROCE of 16.62% shows decent operating capital efficiency.
• Promoter holding of 68.66% aligns owners with minority shareholders.
• Sales growth of 2.58% shows some demand stability despite falling profits.

Concerns

• Profit declined 24.80% and Piotroski F-score of 4/9 indicates deteriorating financial health.
• Zero dividend yield and no book value/debt-equity disclosure weaken the margin-of-safety analysis.
• Latest quarter net margin of roughly 5% is thin, leaving little cushion against cost or demand shocks.
• Low P/E may be a value trap if textile earnings remain cyclical and keep falling.

AI Analysis

At ₹34.40, Cedaar looks statistically cheap: P/E of 3.86, market cap of only ₹42 Cr, against latest quarter sales of ₹81 Cr and net profit of ₹4 Cr. But cheapness is not the same as value. Reported profit is down 24.80%, and the Piotroski score of 4/9 tells me the underlying health is weakening. A PEG of 1.50 assumes growth, but I trust the reported falling earnings over a formula built on hope. Sales growth of just 2.58% makes this a slow, cyclical textile operation, not a compounding franchise. ROCE of 16.62% is respectable, yet the latest quarter net margin is only about 5%—too thin for comfort. There is no dividend, no book value, and no debt/equity figure disclosed, so I cannot apply Graham's margin-of-safety test properly. Promoter holding is high at 68.66%, which is good for alignment, but it also leaves a small free float and little outside scrutiny. The stock has already moved from ₹14.60 to ₹34.40, so the obvious bargain may be partly priced in. If earnings keep falling, a 3.86 P/E will not stay low for long. I would want to see stable quarterly profits, a better F-score, and clear numbers on the balance sheet before acting. Even with high promoter ownership, I need evidence of durable earning power and shareholder-friendly capital allocation. Until then, this is a possible cyclical value trap, not a wonderful business. In Buffett's words, it is far better to buy a wonderful business at a fair price than a fair business at a wonderful price.

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