Esab India (ESABINDIA)
StalwartFairStock Score: 42/100 — MIXED
Score breakdown: P/E: 0/3 · ROCE: 2/2 · Growth: 2/2 · Dividend: 0/1
Key Financials
| Current Price | ₹6,232 |
| Market Cap | ₹9,592.93 Cr |
| P/E Ratio | 43.29 |
| ROCE | 70.03% |
| ROE | 60.6% |
| Dividend Yield | 1.88% |
| Profit Growth | 37.1% |
| Debt/Equity | 0.01 |
| Sales Growth | 19.6% |
| Promoter Holding | 73.72% |
| 52-Week Range | ₹4,710 — ₹7,319.5 |
| Sector | Industrial Products |
| Book Value | ₹278.95 |
Strengths
- Exceptional capital efficiency with ROE of 60.60% and ROCE of 70.03%
- Almost zero leverage with Debt/Equity of 0.01, reducing financial risk
- Strong promoter holding of 73.72%, aligning owner and minority interests
- Healthy Piotroski F-Score of 7/9 indicates solid financial condition
Concerns
- Valuation is rich with P/E of 43.31 and P/B of 25.97, leaving little margin of safety
- PEG of 2.07 suggests the growth rate does not justify the current multiple
- Dividend yield of only 1.18% offers minimal income support
- FairStock Score of 37/100 is mixed, while sales growth of 12.25% lags profit growth materially
AI Analysis
When I look at Esab India, I see a very high-quality business. A return on equity of 60.60% and a return on capital employed of 70.03% are extraordinary. Add a debt-to-equity ratio of just 0.01, and this is exactly the kind of capital-light, self-funding franchise that Graham would admire. Promoter holding of 73.72% also tells me the owners are still deeply invested. Profit growth of 29.62% is impressive, though sales growth of 12.25% is more modest. The latest quarter shows sales of ₹379 Cr and net profit of ₹43 Cr, so the business continues to earn well. But here is my problem: price. At ₹5,817, the stock trades at a P/E of 43.31 and a price-to-book of 25.97 against a book value of just ₹224. A PEG of 2.07 tells me the growth is not cheap enough. Benjamin Graham taught me to demand a margin of safety. At this valuation, there is none. The dividend yield of 1.18% offers little cushion. The Piotroski score of 7/9 suggests the financial health is solid, but the FairStock Score of 37/100 is a warning. This is a wonderful business, but I would be paying a wonderful price for what may only be a fair business outcome. I would wait for a better entry point, perhaps if the market gives us a meaningful pullback. Patience is a trait of an investor; buying at 43 times earnings is speculation, not investment.
Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer