CP Capital (CPCAP)

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

Key Financials

Strengths

• Trading at 0.36x book value – price ₹96.30 vs book value ₹270.56 – offering a wide margin of safety.
• Low leverage for an NBFC: debt/equity of only 0.14.
• Strong growth with sales up 24.81% and profit up 49.70%; PEG of 0.11 implies the market has not priced in growth.
• Piotroski F-Score of 7/9 suggests solid financial health and improving fundamentals.
• Promoter holding of 63.77% aligns management with minority shareholders.

Concerns

• ROE of 7.72% and ROCE of 9.83% are mediocre; the large book value is not generating high returns.
• A P/B of 0.36 may signal unrecognized asset-quality problems in the loan book.
• Latest quarter shows ₹13 Cr profit on ₹17 Cr sales – an exceptionally high margin that may not be sustainable.
• Price is far closer to the 52-week low of ₹73.51 than the high of ₹167.74, reflecting market skepticism.

AI Analysis

At ₹96.30, CP Capital offers a classic Graham-style margin of safety: I am paying 36 paise for every ₹1 of book value, with book value at ₹270.56. A P/E of 3.94 and a 3.30% dividend yield further suggest the market is not giving this NBFC much credit. But cheap can be a trap. ROE of only 7.72% and ROCE of 9.83% tell me this is not yet a wonderful business; capital is not being compounded at a high rate. The low debt-to-equity of 0.14 is a genuine comfort, especially for a finance company—it means I am not relying on fragile funding. Promoters own 63.77%, so their interests are aligned with mine. The recent 24.81% sales growth and 49.70% profit growth are encouraging, and a PEG of 0.11 is almost absurdly low if those numbers are sustainable. A Piotroski F-Score of 7/9 also indicates decent financial health. However, I must be honest: the latest quarter's ₹17 Cr sales with ₹13 Cr net profit implies an unusually high profit margin; I need to understand whether that is a one-off or repeatable. The heavy discount to book could mean the market knows something about asset quality or future provisioning that annual figures do not reveal. I would not call this a fast grower in the Buffett sense, because the returns on equity are still mediocre. This is an asset play: a business trading below its stated book value with low leverage and improving earnings. If management can convert this momentum into higher ROE, and asset quality holds, the shares could rerate. If not, I still have some protection from the tangible ₹270.56 of book value and a 3.30% dividend while I wait.

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