EID Parry (EIDPARRY)

FairStock Score: 64/100 — STEADY

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

Key Financials

Strengths

• Strong recent growth: sales growth of 23.46% and profit growth of 46.45%
• Reasonable valuation: P/E of 14.60, P/B of 1.95, and PEG of 1.38
• Healthy balance sheet with debt/equity of only 0.31
• Good capital efficiency: ROE of 14.99% and ROCE of 16.59%
• Piotroski F-score of 8/9 indicates solid financial health

Concerns

• Free cash flow is deeply negative at ₹-847 crore despite reported profits
• No dividend yield, so investors get no income cushion
• Graham Number of ₹820.04 is below the current price, giving a margin of safety of -5.51%
• EV/EBITDA of -20.67 is a red flag that needs explanation

AI Analysis

As value investors, we first ask what a business earns on capital and how it funds growth. EID Parry earns an ROE of 14.99% and ROCE of 16.59%, and with debt/equity of only 0.31, the balance sheet is not keeping me awake. Sales are up 23.46%, profits are up 46.45%, and the five-year revenue CAGR of 11.24% shows compounding. The Piotroski F-score of 8/9 reminds me of a company whose financial health is improving. At ₹871.60, the P/E of 14.60 and P/B of 1.95 are not demanding for that growth; even the PEG of 1.38 is acceptable. But Graham would tug my sleeve: the Graham Number is ₹820.04, so the price offers no margin of safety, and the negative free cash flow of ₹847 crore is a serious concern. Profits are not being converted into cash, and with no dividend yield, the shareholder must rely entirely on future growth. The latest quarter revenue of ₹10,316 crore and net profit of ₹437 crore suggest operational vitality, but I need to understand why cash flow is negative and why EV/EBITDA is a meaningless negative number. The 52-week range from ₹698.20 to ₹1196.40 reminds me this is not a stable compounder; it has cyclical tendencies. Promoter holding of 41.45% is good, but I also note the stock is roughly 27% below its high, meaning market sentiment has cooled. I would classify this as a fast grower trading at a reasonable price, not a wonderful business at a wonderful price. If the cash flow turns positive and the balance sheet stays prudent, it deserves attention; today, I would wait for a larger margin of safety or proof of cash conversion.

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