Datamatics Glob. (DATAMATICS)

FairStock Score: 44/100 — MIXED

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

Key Financials

Strengths

• Profit growth of 31.06% outpaces P/E of 20.89, giving a PEG of 0.82
• Low leverage: Debt/Equity of 0.13 and Piotroski F-Score of 7/9
• Promoter holding of 66.33% aligns ownership with minority shareholders
• Sales growth of 19.89% with ROCE of 15.01% suggests efficient capital use

Concerns

• ROE of 10.18% is modest for a P/B of 5.08 and price of ₹729.45
• Dividend yield of 0.65% is low, so returns depend entirely on price appreciation
• Latest quarter net margin is thin: ₹36 Cr profit on ₹510 Cr sales, roughly 7%
• FairStock Score of 39/100 indicates a mixed fundamental picture

AI Analysis

Let me start by saying what I like: Datamatics is growing. Sales up nearly 20%, profits up 31%. At a P/E of 20.89, with a PEG of 0.82, the market is paying a fair price for that growth. The balance sheet is conservative—debt is just 13% of equity, and a Piotroski score of 7 out of 9 tells me the fundamentals are improving. Promoters own 66%, which is good; their interests are aligned with mine. But I must be honest about the quality. Return on equity is only 10.18%. That is not a franchise. A wonderful business earns high returns on tangible capital; this one earns a modest return. The book value is ₹143.53, yet I am being asked to pay ₹729.45—over five times book. That leaves little margin of safety if growth stumbles. The dividend yield is under 1%, so I cannot wait comfortably while holding this stock. The FairStock score of 39/100 captures the mixed picture. I remind myself that a good business is not necessarily a good investment. The latest quarter shows sales of ₹510 Cr and net profit of ₹36 Cr—roughly a 7% margin. That's thin. The 52-week range tells the story of volatility: from ₹632 to ₹1054, now at ₹729. The stock has been cut down, but value? Let's see. Would I buy a 5x book business with 10% ROE? Not without a durable moat. IT-enabled services is a competitive field. The growth numbers are encouraging, but I need to see return on equity climb and the price give me more cushion. For now, I'd keep it on the watchlist, not in the portfolio.

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