Crompton Gr. Con (CROMPTON)

FairStock Score: 58/100 — STEADY

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

Key Financials

Strengths

• Near-zero debt with Debt/Equity of 0.05 and strong ROCE of 19.01%
• Healthy free cash flow of ₹606 Cr against a market cap of ₹16,603 Cr
• Solid Piotroski F-Score of 8/9 indicating good financial health
• Altman Z-Score of 3.76 shows low bankruptcy risk
• Established household appliances brand with 5-year revenue CAGR of 10.36%

Concerns

• Profit growth declined 12.11% and sales growth is just 1.40%, showing stalled momentum
• Promoter holding at 0.00% raises serious governance and alignment questions
• Valuation is steep: P/E of 33.93, EV/EBITDA of 29.86, PEG of 2.56
• Price is massively above Graham Number (₹92.61) and DCF value (₹102.79), leaving no margin of safety

AI Analysis

Let me start with what I look for: a durable business with a moat, run by honest stewards, available at a price that makes sense. Crompton Gr. Con has some qualities I respect. It has a zero-debt balance sheet with a Debt/Equity of just 0.05, and its ROCE of 19.01% shows the business generates decent returns on capital. Free cash flow of ₹606 Cr is healthy relative to its market cap, and the Piotroski F-Score of 8/9 tells me the company is financially sound. But I cannot ignore the warning signs. Sales growth of only 1.40% and profit declining 12.11% in the latest period are far from what I'd call a compounding machine. Even the 5-year revenue CAGR of 10.36% is moderate. The real problem, though, is price. At ₹253.45, the stock trades at a P/E of 33.93 and about 4.81 times book value. The Graham Number of ₹92.61 implies a margin of safety of -178%. A DCF value of ₹102.79 suggests the market is pricing in perfection. As Graham said, price is what you pay, value is what you get. Here, you pay a premium for a company whose recent growth is stalling. The negligible promoter holding of 0.00% is a governance red flag I cannot overlook. This isn't a business I would call a wonderful company at a fair price; it's a decent company at an unfair price. For a retail investor, patience is the better virtue. I'd wait for a margin of safety before even considering this one.

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