Dodla Dairy (DODLA)

FairStock Score: 41/100 — MIXED

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

Key Financials

Strengths

• Excellent capital efficiency with ROE at 19.67% and ROCE at 26.55%
• Very low leverage with debt/equity of 0.04 and a Piotroski F-Score of 7/9
• Steady growth: sales up 13.74% and profit up 17.08%
• Strong promoter holding of 58.92% aligns owner interests
• Latest quarter shows scale and profitability: ₹1,025 Cr sales and ₹69 Cr net profit

Concerns

• Valuation is rich at P/E of 26, P/B of 5.68, and PEG of 1.69
• Low dividend yield of 0.43% provides little cash return cushion
• FairStock Score of 40/100 signals a mixed risk-reward profile
• Price of ₹1,109.95 is far above book value of ₹195.34, leaving limited margin of safety

AI Analysis

Let me examine Dodla Dairy with Graham's discipline. The business quality is apparent: 19.67% return on equity and 26.55% return on capital employed, with debt-equity of just 0.04. That is a conservatively financed operation earning excellent returns on retained capital. The Piotroski F-Score of 7 out of 9 confirms a healthy fundamental backdrop. Growth has been steady—sales up 13.74% and profit up 17.08%—and the latest quarter shows ₹1,025 crore in sales with ₹69 crore net profit. Promoters hold 58.92%, aligning their interests with mine. But value? At ₹1,109.95, the market capitalises Dodla at ₹7,043 crore, or 26 times earnings and 5.68 times book value. Graham would remind me that price is what you pay, value is what you get. A PEG of 1.69 means I am paying more than the growth rate justifies. The dividend yield is thin at 0.43%, so the reward rests almost entirely on future growth and multiple re-rating. The share sits 26% below its 52-week high of ₹1,500, but a falling price alone is not a margin of safety. This is a fine stalwart business: liquid milk and dairy products have recurring demand, low debt gives resilience, and owner earnings are improving. But at this price, the margin of safety is modest. The FairStock Score of 40/100 says mixed. If the business continues compounding near 17% profit growth, the P/E may become reasonable after several years. Until the price falls to a level nearer to intrinsic value—or growth accelerates—I would not rush to build a large position. I would wait for a better entry point and keep watching.

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