Electrotherm(I) (ELECTHERM)

FairStock Score: 34/100 — RISKY

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

Key Financials

Strengths

• Large operating scale: quarterly sales of ₹904 Cr are nearly equal to the entire market cap of ₹914 Cr, implying a very low price-to-sales multiple.
• ROCE of 31.62% suggests the core operations may have some earning power if the heavy debt/interest burden and losses are addressed.
• The stock trades well below its 52-week high of ₹1,278.35, reflecting considerable pessimism; a steel cycle recovery could offer operating leverage.
• As an iron and steel player, it could benefit from any commodity upcycle, though that is not yet visible in the numbers.

Concerns

• Negative book value of -₹120.91 per share means liabilities exceed assets; there is zero equity cushion for shareholders.
• Ongoing losses: latest quarter net profit is -₹35 Cr, ROE is -27.44%, and profit growth is -140.10%.
• Sales declined -16.41%, and the Piotroski F-Score of 3/9 indicates poor financial health.
• Promoter holding is only 29.90%, there is no dividend yield, and the FairStock Score of 18/100 flags this as a risky balance sheet situation.

AI Analysis

At first glance, this is the kind of stock Graham would call speculative, not investing. Electrotherm sells a commodity—steel—which gives it little pricing power. The numbers get worse on inspection. Book value is negative: -₹120.91 per share. That means the equity cushion has been completely eaten by losses and liabilities. Debt/equity is not meaningful, and with a ROE of -27.44%, shareholders are nursing a bleeding wound. The latest quarter shows a net loss of ₹35 Cr on sales of ₹904 Cr, and profit growth has collapsed by -140.10% while sales fell -16.41%. A P/E of 18.50 is a ghost; you cannot value a loss-making business on trailing earnings. Piotroski F-Score of 3/9 confirms weak financial health. Yes, ROCE is 31.62%, which might hint that operations can generate returns if the capital structure is fixed, but that is a big if in a capital-intensive cyclical industry with negative net worth. The market cap of ₹914 Cr looks small against quarterly sales of ₹904 Cr, yet low price-to-sales is a trap when liabilities dominate. Promoter holding of 29.90% and zero dividend do not give minority investors much comfort. At ₹747.45, well below the 52-week high of ₹1,278.35, the market has marked it down, but a low price is not a reason to buy. Without a clear path to positive equity and consistent profits, this remains a turnaround or a special situation, far outside my circle of competence. I would prefer to watch from the sidelines.

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