Deep Industries (DEEPINDS)

FairStock Score: 61/100 — STEADY

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

Key Financials

Strengths

• Low valuation: P/E of 9.58 and PEG of 0.19, if recent growth persists
• Strong balance sheet: debt/equity of only 0.10 and ROE of 14.23%
• High promoter holding of 63.49% aligns management with minority shareholders
• Piotroski F-Score of 7/9 indicates decent earnings quality and financial health
• Latest quarter net profit margin of roughly 32% demonstrates strong operating leverage

Concerns

• Oil equipment and services is inherently cyclical; peak-level margins may normalize sharply
• Price-to-book of 2.30 is not cheap on an asset basis
• Dividend yield of only 0.88% offers limited downside protection
• Recent 52-week range of ₹330–₹698 shows meaningful share-price volatility

AI Analysis

At ₹488, Deep Industries sells at a P/E of 9.58 and a PEG of 0.19. That kind of number makes a value investor pause. But Benjamin Graham taught me to treat growth figures with suspicion. The company earns a 14.23% ROE with almost no leverage — debt-to-equity is just 0.10 — and the balance sheet looks sound. Promoters own 63.49%, so their interests are aligned with mine. A Piotroski score of 7/9 also supports the quality of reported earnings. Yet I must remember this is oil equipment and services. Such businesses are cyclical. The latest quarter saw ₹71 crore net profit on ₹222 crore sales — a 32% margin. That is an exceptionally profitable quarter, possibly near the top of the cycle. When upstream oil companies cut spending, margins can compress much faster than the low P/E suggests. Sales grew 43% and profit grew 56%, but I should not pay a multiple on today's peak earnings and call it a moat. Book value is ₹211.87, so at ₹488 I am paying 2.3 times book — not a distressed-asset bargain. Dividend yield is only 0.88%, providing little income cushion. This is a well-run, growing business with a conservative balance sheet, but the margin of safety depends on continued strong demand for oil services. I would not call it a stalwart; it is a cyclical growth story. If I owned it, I would watch order books, upstream spending by Indian oil majors, and whether that 32% margin can persist. If it can, the low P/E is attractive. If not, today's earnings may prove unsustainable.

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