Coffee Day Enter (COFFEEDAY)

FairStock Score: 21/100 — RISKY

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

Key Financials

Strengths

• Trading at only 0.30 times book value, with book value at ₹89.26 against a price of ₹27.10.
• Latest quarter shows a net profit of ₹70 Cr on sales of ₹286 Cr, indicating a possible earnings recovery.
• Piotroski F-Score of 7/9 suggests recent improvement in financial health.
• Debt/equity of 0.39 is manageable and not a distress-level balance sheet.
• Reported profit growth of 161.13%, though likely from a weak base, points to momentum.

Concerns

• ROE is deeply negative at -10.90% and ROCE is only 1.01%, so the business is earning poor returns on both equity and capital.
• Promoter holding is just 7.83%, raising serious governance and alignment concerns.
• Sales growth is only 2.13%, and there is no dividend, offering little organic growth or income support.
• P/E is 0.00, meaning trailing earnings cannot be relied upon; the quarterly profit may be exceptional or non-recurring.

AI Analysis

Price of ₹27.10 against book value of ₹89.26 means I am being offered the equity at roughly 70% discount to stated book. That is an asset play on paper. But Graham taught me that book value is only a starting point, not the conclusion. This business earns poorly: ROE is -10.9% and ROCE is just 1.01%, so the assets are not generating acceptable returns. Sales growth of 2.13% shows a stagnant operation. The latest quarter, however, shows net profit of ₹70 Cr on sales of ₹286 Cr, and reported profit growth of 161% suggests something may be changing. The Piotroski F-Score of 7/9 adds a little evidence that financial health is improving. Debt/equity at 0.39 is manageable. Still, with promoter holding just 7.83%, I am wary: when the people running the business have so little ownership, minority shareholders need extra caution. There is no dividend, and P/E is meaningless because trailing earnings are not reliable. This is not a wonderful business; it is a possible turnaround or asset unlock. I would want to know whether the quarterly profit repeats, whether the book value is real, and whether promoters are buying or selling. If the company can monetise its assets and improve returns, the margin of safety could be substantial. If not, a cheap stock can stay cheap. As Buffett says, price is what you pay, value is what you get. Here the value is uncertain.

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