Crayons Advertis (CRAYONS)

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

Key Financials

Strengths

• Sales growth is strong at 43.25%, showing business expansion.
• P/E of 6.96 is statistically inexpensive against current earnings.
• Promoter holding of 73.50% indicates strong insider ownership.
• Latest quarter remains profitable with ₹3 crore net profit on ₹141 crore sales.

Concerns

• Profit growth is negative at -12.01% despite 43.25% sales growth, signaling margin compression.
• Net margin is very thin at roughly 2.1% of sales.
• ROCE of 8.93% is modest and offers little cushion for cyclical downturns.
• Piotroski F-Score of 4/9 suggests weak financial health and poor fundamentals.

AI Analysis

At ₹35.10, Crayons Advertis looks statistically cheap with a P/E of 6.96 and a market cap of just ₹93 crore. But in investing, cheap can be a value trap. This is an advertising and media agency, a business I have always approached with caution. Clients can leave, ad budgets are discretionary, and scale rarely creates a durable moat. Latest quarter revenue was ₹141 crore but net profit only ₹3 crore, a net margin of about 2.1%. That is razor-thin. Full-year profit declined 12% even as sales grew 43%. In other words, growth is being bought, not paid for. ROCE of 8.93% is below what I would demand from a business with this little predictability. The Piotroski F-score of 4/9 reinforces my concern about financial health. There is no dividend to compensate me while I wait. Promoter holding is high at 73.5%, which is good if aligned, but high holding also means low liquidity and limited minority protections. The 52-week range of ₹23.60 to ₹64.00 shows how volatile and speculative this stock has been. Some might see a PEG of 0.16 and think it is deeply undervalued. But that ratio uses sales growth, not profit growth. When earnings are falling, a low P/E can get lower. I need a margin of safety in the balance sheet and earnings power, not just in the price. Without book value and ROE disclosed, I cannot assess management's track record on capital. I would prefer to watch from the sidelines until Crayons shows it can convert revenue growth into profit and earn a higher return on capital.

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