Chemplast Sanmar (CHEMPLASTS)

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

Key Financials

Strengths

• Trading at 0.99x book value, with book value per share of ₹245.12 vs price of ₹243.85
• Promoter holding of 54.99% indicates significant insider ownership
• Debt/Equity of 0.97 is not extreme for a capital-intensive chemical business
• Latest quarterly sales of ₹835 crore show the company still has meaningful scale

Concerns

• Negative earnings: P/E is zero/meaningless, and latest quarterly net loss is ₹119 crore
• ROE of -3.76% and ROCE of 1.83% indicate value destruction
• Sales declined 21% and profit growth fell 144%, showing severe cyclical stress
• Piotroski F-Score of 3/9 and zero dividend point to weak financial health and no income support

AI Analysis

Let me start with what attracts me: the price of ₹243.85 is almost exactly the book value of ₹245.12. For a Graham investor, buying near book can give a margin of safety if the assets are real and earnings power exists. But in this case, the earnings power is missing. Chemplast Sanmar lost ₹119 crore in the latest quarter on sales of ₹835 crore. Annual profit growth collapsed by 144%, and sales fell 21%. The company earns a return on equity of -3.76% and a return on capital of just 1.83% — far below what I would demand for a commodity chemical business. With debt/equity at 0.97, the balance sheet is not deeply distressed, but leverage plus losses is a dangerous combination. There is no dividend to compensate while waiting, and the Piotroski F-score of 3/9 suggests weak operational health. Promoter holding at 54.99% is a positive, but even good ownership cannot overcome a business without pricing power. This is a cyclical commodity producer in a downcycle, not a wonderful franchise. I cannot say it is a bargain just because it trades near book. Book value is an accounting number; value comes from future cash earnings. Until I see stabilising sales, narrowing losses, and returns moving back toward a respectable cost of capital, this remains a risky turnaround speculation, not a Graham investment. The 52-week range of ₹170 to ₹460 shows how volatile this stock can be. I would keep it on the watchlist but not put my capital to work.

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