Digjam (DIGJAMLMTD)
TurnaroundScore breakdown: P/E: 0/3 · ROCE: 0/2 · Growth: 2/2 · Dividend: 0/1
Key Financials
| Current Price | ₹50.38 |
| Market Cap | ₹100.76 Cr |
| P/E Ratio | 43.43 |
| ROCE | 5.04% |
| ROE | -290.4% |
| Dividend Yield | 0% |
| Profit Growth | -14.6% |
| Debt/Equity | 13.61 |
| Sales Growth | 88.7% |
| Promoter Holding | 75% |
| 52-Week Range | ₹36.03 — ₹73.47 |
| Sector | Textiles & Apparels |
| Book Value | ₹2.19 |
Strengths
- Promoter holding at 75% aligns management with minority shareholders.
- Sales growth of 30.47% shows improving demand traction.
- Profit growth of 128.21% and a positive latest quarter net profit of ₹1 Cr indicate a potential turnaround.
- Piotroski F-Score of 7/9 suggests improving financial fundamentals.
Concerns
- Debt/Equity of 12.64 is extremely high, creating severe financial risk in a downturn.
- ROE of -290.40% and book value of ₹2.31 show deep erosion of shareholder equity.
- P/E of 59.34 and P/B of 23.28 leave little margin of safety.
- No dividend and minuscule scale with quarterly sales of ₹7 Cr limit investment quality.
AI Analysis
Let me begin with a simple truth: I like businesses that throw off cash, not ones that consume it. Digjam is a small textile company with a market cap of ₹95 Cr, latest quarterly sales of ₹7 Cr and net profit of ₹1 Cr. That sounds nice, but the broader numbers tell a warning. The company carries debt/equity of 12.64, book value is only ₹2.31 per share, and ROE is deeply negative at -290.40%. In other words, the equity cushion is thin and has been badly eroded. A 23.28 price-to-book on a business earning negative returns on book is not value investing; it is hope. The reported profit growth of 128.21% is flattering because the base is low. At a P/E of 59.34, the market is paying up for a recovery that may not be durable. Fortunately, there are some positive signals: sales grew 30.47%, the Piotroski F-Score is 7/9, and promoter holding is 75%, so owners are aligned. This looks like a possible turnaround rather than a wonderful business. Graham would ask where the margin of safety is. With no dividend, high leverage, and a book value of ₹2.31 against a share price of ₹53.78, I don't see one. Textiles are a cyclical, competitive commodity business; leverage makes this more dangerous, not safer. If the company can keep earning positive quarterly profits, reduce debt, and build book value, it may eventually become interesting. Until then, I will remain disciplined and wait.
Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer