Dolat Algotech (DOLATALGO)
CyclicalFairStock Score: 38/100 — MIXED
Score breakdown: P/E: 3/3 · ROCE: 2/2 · Growth: 1/2 · Dividend: 0/1
Key Financials
| Current Price | ₹69.4 |
| Market Cap | ₹1,221.44 Cr |
| P/E Ratio | 9.48 |
| ROCE | 35.48% |
| ROE | 12.11% |
| Dividend Yield | 0.14% |
| Profit Growth | 17.8% |
| Debt/Equity | 0.25 |
| Sales Growth | -3.4% |
| Promoter Holding | 74.49% |
| 52-Week Range | ₹65 — ₹95.76 |
| Sector | Capital Markets |
| Book Value | ₹64.12 |
Strengths
- Low leverage with debt/equity of 0.19 and high ROCE of 35.48%
- ROE of 13.10% and profit growth of 4.04% despite a -8.88% sales decline
- Strong promoter holding of 74.49% aligns owners and management
- Moderate valuation: P/E of 10.83 and P/B of 1.51
Concerns
- Stockbroking is cyclical and competitive; sales are already declining 8.88%
- Dividend yield is only 0.33%, giving minor shareholders little cash return
- PEG of 2.68 and FairStock Score of 33/100 suggest limited growth and high risk
AI Analysis
Let me start with what I like. Dolat Algotech has a clean balance sheet — debt/equity of just 0.19 — and it earns a strong 35.48% ROCE, which tells me the broking business does not require much capital. ROE of 13.10% is respectable, and promoter holding of 74.49% aligns interests with minority shareholders. At ₹78.99, I am paying 10.83 times earnings and 1.51 times book value. That is not demanding for a profitable financial firm. Profit grew 4.04% even as sales fell 8.88%, so there is some cost discipline. But I must be honest: stockbroking is a cyclical, competitive business. In a bull market, volumes inflate profits; in a bear market, they can evaporate. The latest quarter shows sales of ₹108 Cr and net profit of ₹39 Cr, but one quarter proves nothing. The dividend yield is only 0.33%, so I am not being paid to wait. The Piotroski score of 6/9 suggests financial health is okay, but the PEG of 2.68, based on just 4% profit growth, is not attractive. FairStock calls it 33/100 and 'risky'; I understand why. This is not a wonderful business with a durable moat. It is a reasonably capitalized, decently managed cyclical trading operation. I would need a larger margin of safety than 10.8 times trailing earnings, because broking earnings are likely to mean-revert. For a patient investor, this belongs on a watchlist, not in the portfolio today.
Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer