Emami Paper (EMAMIPAP)

FairStock Score: 51/100 — MIXED

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

Key Financials

Strengths

• Trading at a 43% discount to book value (P/B 0.57, book value ₹133.72) providing a tangible asset cushion.
• High promoter holding at 74.97%, aligning management interests with shareholders.
• Piotroski F-Score of 7/9 indicates improving financial health and operational efficiency.
• Sales growth of 10.16% and a latest quarter net profit of ₹17 Cr suggest demand recovery.
• Dividend yield of 1.89% offers a small income while waiting for cyclical upturn.

Concerns

• Weak profitability with ROE of only 4.18% and ROCE of 6.58%, indicating poor capital allocation.
• Moderate leverage with debt/equity of 1.01, exposing the company to interest rate and commodity cycles.
• Profit growth of 994.71% is a low-base artifact and not a sustainable growth rate.
• Thin net margin of ~3.4% in the latest quarter leaves little room for error if costs rise.

AI Analysis

When I look at Emami Paper, I see a classic cyclical asset play. The stock trades at ₹76.18 against a book value of ₹133.72 — that's 57 paise for every rupee of net worth. Graham would have called this a margin of safety. However, sound balance sheets alone don't make good investments; the business must generate returns. Here, ROE is just 4.18% and ROCE 6.58%, which tells me the paper business is capital-hungry and currently earning subpar returns. The debt-to-equity of 1.01 is acceptable but not ideal, and interest costs likely eat into profits. The reported profit growth of 994% looks spectacular but is misleading — it's a rebound from a low base, not a new compounding machine. The latest quarter's net profit of ₹17 Cr on sales of ₹500 Cr translates to a thin 3.4% margin. Still, the Piotroski score of 7/9 suggests improving fundamentals, and promoter holding of 74.97% aligns owners with minority shareholders. At ₹512 Cr market cap, the market is pricing in modest expectations. I would not call this a stalwart or a fast grower; it's a cyclical paper company in an early recovery. The dividend yield of 1.89% gives a small income cushion. My approach would be to hold this only as a value-backed cyclical play, watching paper price cycles and debt reduction. If returns on capital improve meaningfully, the low P/B could re-rate. If not, the discount to book may persist or widen. Patience is required, but with a FairStock score of 52, I'd keep it on the radar rather than rush in.

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