Chamanlal Setia (CLSEL)

FairStock Score: 57/100 — STEADY

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

Key Financials

Strengths

• Very low debt-to-equity of 0.09 indicates a conservative balance sheet and limited financial risk.
• ROE of 14.96% and ROCE of 16.71% show reasonable capital efficiency without leverage.
• P/E of 13.26 combined with a PEG ratio of 0.81 suggests the current valuation is not stretched relative to profit growth.
• Promoter holding of 74.05% aligns management interests with minority shareholders.
• Piotroski F-Score of 7/9 points to generally sound fundamentals and earnings quality.

Concerns

• Sales growth of just 9.03% lags profit growth of 23.89%, making the earnings momentum potentially unsustainable.
• Being in agricultural products, the business may lack pricing power and face commodity/seasonal cycles.
• Dividend yield of only 0.93% offers limited income support if growth disappoints.
• P/B of 1.95 provides only a modest margin of safety if earnings revert to a lower trend.

AI Analysis

As a value investor, I do not chase price; I chase what a business gives me per rupee. At ₹271.45, Chamanlal Setia is available at 13.26 times earnings and 1.95 times book. That is not a deep Graham bargain—book value is ₹139.51, so I am paying a premium. But the premium is supported by earnings quality: return on equity is 14.96%, return on capital is 16.71%, and debt-to-equity is just 0.09. The company does not depend on borrowed money, which makes me sleep well. What troubles me is the nature of the business. Chamanlal Setia deals in other agricultural products—a field where pricing power is often weak and cycles are common. Sales grew only 9.03%, yet profits jumped 23.89%. I like profit growth, but I must ask whether it comes from lasting advantages or from a temporary tailwind. The latest quarter shows sales of ₹431 crore and net profit of ₹36 crore; over a full year, a 24% profit growth is impressive, but a 9% sales growth tells me volume is not booming. The Piotroski score of 7 out of 9 suggests healthy fundamentals, and the 74.05% promoter holding aligns management with shareholders. At a PEG ratio of 0.81, the price looks reasonable if profit growth continues. But the dividend yield is only 0.93%, so this is not an income stock. It is a compounder if margins and efficiency hold. I would not call it a wonderful business with an unbreachable moat; rather it is a decent, financially sound enterprise. I need to watch whether the profit growth is sustainable. If it is, the valuation is fair. If not, I have no margin of safety.

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