Emerald Tyre (ETML)

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

Key Financials

Strengths

• Sales growth of 9.28% shows the business still has demand traction.
• ROCE of 13.05% indicates acceptable capital efficiency for a capital-intensive tyre maker.
• Latest quarter remains profitable: ₹5 Cr net profit on ₹98 Cr sales.
• Promoter holding of 50.31% provides moderate alignment with minority shareholders.
• A small dividend yield of 1.04% offers some return while waiting.

Concerns

• Profit growth is -9.24% despite sales growth, pointing to margin compression.
• P/E of 21.06 and PEG of 2.27 look expensive for a company with falling earnings.
• Piotroski F-Score of 4/9 suggests weak financial health.
• No book value, ROE, or debt/equity data makes balance sheet risk impossible to assess.

AI Analysis

At ₹85, Emerald Tyre looks like a typical small-cap cyclical, and I do not see a durable moat in these numbers. The market capitalisation is ₹187 crore and the P/E is 21.06. For a company whose profit fell 9.24% while sales grew 9.28%, that multiple gives me no comfort. Growth that does not reach the bottom line is not the kind I want to pay for. Quarterly figures show ₹98 crore in sales and only ₹5 crore in net profit — a thin margin that leaves little room for error. ROCE of 13.05% is decent, but it is not the exceptional return that signals pricing power. As Graham would say, the first rule is to protect the downside. The Piotroski F-score of 4 out of 9 suggests below-average financial fitness; several warning lights are flashing. I also lack the book value, ROE, and debt-to-equity figures, so I cannot judge the balance sheet. That alone is enough to put this in the 'too hard' pile. Promoter holding of 50.31% is moderate, and the dividend yield of 1.04% gives little compensation while I wait. With profit declining and a PEG of 2.27, the market is already pricing in growth that may not arrive. The 52-week range of ₹72.50 to ₹99.00 shows uncertainty, not stability. This is a cyclical business, not a predictable compounder. Even if the company is around in five years, I need a margin of safety, and at ₹85 I cannot find one. I would wait for a lower price or clear proof that margins are improving before revisiting. In investing, patience is often better than action. This one I am happy to let pass.

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