Chembond Chemic. (CHEMBONDCH)

FairStock Score: 60/100 — STEADY

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

Key Financials

Strengths

• ROCE of 26.47% shows strong capital efficiency.
• Sales growth of 15.32% indicates ongoing demand for the company's specialty chemicals.
• Promoter holding at 67.94% aligns promoter interests with minority shareholders.
• Trailing P/E of 12.32 and PEG of 0.80 provide valuation cushion if earnings stabilise.
• Latest quarter net profit of ₹10 Cr on sales of ₹86 Cr shows the business is still profitable.

Concerns

• Profit growth of -2.31% despite 15.32% sales growth points to margin compression.
• Piotroski F-score of 4/9 signals weak financial health and poor fundamental momentum.
• Dividend yield of only 0.51% gives limited support to investors while the stock price is down sharply from its 52-week high of ₹283.
• ROE and debt-equity data are unavailable, making balance sheet leverage and return quality opaque.

AI Analysis

At ₹147, Chembond Chemic trades like a beaten-down cyclical, and that is exactly how I intend to judge it. The price has fallen from ₹283 to ₹147, yet the business is not collapsing: sales grew 15.32%, and latest quarter sales came in at ₹86 Cr with net profit of ₹10 Cr. The ROCE of 26.47% points to decent capital efficiency, and the P/E of 12.32 with a PEG of 0.80 suggests the market has already priced in pessimism. But I have to ask whether this is a bargain or a value trap. The 2.31% decline in profit growth, despite double-digit sales growth, tells me margin compression is real. In specialty chemicals, a durable moat shows up in pricing power; here, the operating leverage seems to be working against the company. The Piotroski F-score of 4/9 is a red flag—it suggests financial health is weak, at least on the metrics I can see. I also lack ROE and debt/equity data, so I cannot fully judge shareholder returns or leverage risk. A 0.51% dividend yield is hardly comforting. On the positive side, promoters own 67.94%, so their interests are aligned with mine. Book value is ₹68.60, meaning the stock is valued at 2.14 times book; not deeply cheap, but acceptable for a profitable specialty chemical player. For a Graham-style investor, the margin of safety depends on future earnings, not past prices. I would need to see profit growth turn positive for at least two or three consecutive quarters before I consider this a serious buy. Until then, I can only call it a cyclical in an unloved phase.

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