Fairchem Organic (FAIRCHEMOR)

FairStock Score: 22/100 — RISKY

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

Key Financials

Strengths

• Low debt/equity of 0.19 provides balance sheet stability during a downturn.
• High promoter holding of 61.19% aligns management with public shareholders.
• ROCE of 10.25% is modest but positive, indicating the operating base can still generate some returns.
• Dividend yield of 1.26% provides a small cash return while waiting for a turnaround.

Concerns

• P/E of 243.93 and P/B of 2.42 are far too rich given ROE of 0.82% and near-zero latest-quarter profit.
• Sales declined 11.83% and profit fell 81.82%, showing serious operational deterioration.
• Piotroski F-score of 3/9 and FairStock Score of 0/100 signal weak financial health and high risk.
• With latest-quarter net profit at roughly ₹0 Cr, there is no earnings cushion to support the valuation or dividend.

AI Analysis

I approach Fairchem Organic the same way I approach any speciality chemical: I ask what the company earns today, what it can earn tomorrow, and what I am paying for that future. Today, the numbers fail the Graham test. The stock is ₹567.90, giving a market cap of ₹773 Cr. But earnings are nearly absent. A P/E of 243.93 is not an investment; it is a hope. Profit growth has collapsed by 81.82%, and sales have declined 11.83%. In the latest quarter, revenue was ₹100 Cr but net profit was essentially zero. That is not a business I can value with conviction. The balance sheet is the only comfort. Debt/equity is 0.19, so the company is not drowning in leverage. Promoters hold 61.19%, so their interests are aligned with minority shareholders. Book value is ₹235.08 per share, but the market demands ₹567.90, or 2.42 times book, for a return on equity of just 0.82%. Even ROCE, at 10.25%, is only modest. The Piotroski F-score of 3/9 and the FairStock Score of 0/100 reinforce the message: financial health has deteriorated. This is not a fast grower or a stalwart. It is a turnaround candidate at best. The 52-week range shows the stock has already fallen from ₹858 to ₹567.90, but a lower price alone is not a margin of safety. Value comes from recoverable earnings power, and I see no evidence of that yet. The dividend yield of 1.26% offers small compensation, but not enough to offset the risk. I would wait. I need to see sales stabilise, profits return to meaningful levels, and ROE climb back toward double digits. Until then, Fairchem sits on the watchlist, not in the portfolio. As Graham taught, the price you pay determines your return; today's price asks too much for too little.

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