Ducol Organics (DUCOL)

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

Key Financials

Strengths

• Sales growth of 67.24% shows strong demand traction for its dyes and pigments.
• Piotroski F-score of 6/9 suggests acceptable financial health for a small-cap.
• Promoter holding of 51.33% aligns management interests with minority shareholders.
• Current price ₹118.05 is well below the 52-week high of ₹209.50, offering potential if weakness stabilises.

Concerns

• P/E of 45.20 is steep relative to profit growth of only 12.35%.
• Latest quarter net profit of ₹3 Cr on sales of ₹65 Cr implies a thin ~4.6% net margin.
• ROCE shown as 0.00% and no ROE/book value data make return-on-capital verification impossible.
• Reported PEG of 1.14 appears inconsistent with the P/E and 12.35% profit growth; actual earnings-based PEG looks far higher.

AI Analysis

As a value investor, I first ask: what does a ₹223 crore market cap buy me? Ducol Organics is a dyes and pigments player selling at ₹118, which is 45 times trailing earnings. That multiple demands a lot. Meanwhile, profit growth is only 12.35%, so I am paying a high price for moderate earnings expansion. Sales growth of 67.24% catches the eye, but the latest quarter shows ₹65 Cr of sales translating to just ₹3 Cr of net profit — roughly 4.6% net margin. High growth with thin, fragile margins is not the sign of a durable moat. I cannot calculate ROE, book value, or debt-to-equity from the data, and ROCE is shown as 0.00. In a cyclical chemical industry, return on capital is everything. If the company cannot demonstrate returns above its cost of capital, growth just consumes money. The Piotroski score of 6/9 is decent, but not a strong signal. Promoter holding of 51.33% aligns owners with shareholders, but ownership alone does not make a wonderful business. The stock has fallen from ₹209.50 to ₹118.05, but a falling price is not automatic value. At 45 times earnings with no dividend, expectations remain high. The reported PEG of 1.14 does not reconcile with a 12.35% earnings growth rate; using that profit growth, the PEG would be clearly above 3.5. I therefore view the valuation with suspicion. This looks like a fast-growing cyclical, not a predictable compounder. I would keep Ducol on the watch list and wait for proof of margin stability, better return on capital, and a cheaper entry price before committing.

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