eMudhra (EMUDHRA)

FairStock Score: 40/100 — MIXED

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

Key Financials

Strengths

• Sales and profit both growing at 35%+ (35.41% and 36.72% respectively), with latest quarter revenue of ₹188 Cr and net profit of ₹29 Cr.
• PEG ratio of 0.96 suggests the growth is not drastically overpriced relative to P/E of 34.51.
• Very low debt-to-equity of 0.02 and Piotroski F-score of 7/9 indicate sound financial health.
• Promoter holding of 54.40% gives meaningful skin in the game for minority investors.
• ROCE of 15.32% shows acceptable capital efficiency.

Concerns

• ROE of 5.94% is weak for a stock trading at 8.06 times book value; the premium looks hard to justify on current returns.
• P/E of 34.51 and P/B of 8.06 leave little margin of safety if growth decelerates.
• FairStock Score of 40/100 signals mixed fundamentals, and dividend yield of 0.29% offers negligible downside support.
• Current price of ₹501.65 is well below the 52-week high of ₹771.05, suggesting recent market disappointment or volatility.

AI Analysis

At first glance, eMudhra offers the classic contradiction I have learned to respect. The business is growing at an impressive clip—sales up 35.41% and profits up 36.72%, with the latest quarter showing ₹188 Cr in revenue and ₹29 Cr in profit. A PEG of 0.96, against a P/E of 34.51, suggests the growth is not outrageously priced, and the debt-to-equity of 0.02 gives me comfort that this growth is not being bought with leverage. The Piotroski score of 7/9 supports the idea of solid fundamentals. But a value investor cannot ignore price versus substance. Book value is ₹62.21, yet the share trades at ₹501.65, or 8.06 times book. For that premium, I expect a high return on equity, but eMudhra delivers only 5.94%. Even the return on capital employed, at 15.32%, is decent but not the kind of franchise strength that would make me pay 34 times earnings without hesitation. The 0.29% dividend yield offers little compensation while waiting. Promoter holding of 54.40% is a positive signal, as the owners have skin in the game. The balance sheet is clean, and the F-score of 7 is encouraging. Still, the FairStock Score of 40/100 reminds me that not everything here is cheap or safe. The test for this company is whether the high growth can continue long enough to make today’s valuation look reasonable. If sales and profits keep compounding at over 35% for several years, eMudhra could earn its multiple. If growth slows, the market may re-rate the stock sharply. As Graham would say, price is what you pay, value is what you get. At ₹501.65, I would need strong evidence that the return on equity is about to follow sales growth upward. Until then, it belongs on my watchlist, not my buy list.

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