Gensol Engineer. (GENSOL)

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

Key Financials

Strengths

• Extreme valuation cushion: P/E 0.94 and P/B 0.14, with price ₹24.24 versus book value ₹171.64 per share.
• Strong growth: sales up 56.42% and profit up 32.52%, with latest quarter sales ₹345 Cr and net profit ₹18 Cr.
• Respectable profitability and quality score: ROE 19.97% and Piotroski F-Score 7/9.
• PEG of 0.02 implies the market has priced in hardly any future growth despite recent momentum.

Concerns

• High leverage: Debt/Equity of 2.28 amplifies both returns and risk, especially if earnings soften.
• Lower ROCE of 14.33% versus ROE of 19.97% indicates returns are significantly aided by debt rather than pure operating strength.
• Low promoter holding of 35.87% and zero dividend yield reduce alignment and patience for minority shareholders.
• The deep discount to book could signal a value trap; asset quality and debt covenants need scrutiny.

AI Analysis

At first glance, Gensol Engineering stops me cold: a market cap of just ₹97 crore against a book value of ₹171.64 per share and a P/B of 0.14. The market is pricing this at 14% of stated net worth. As Graham said, price is what you pay, value is what you get, but I must ask why the discount is so wide. A P/E of 0.94 and PEG of 0.02 are almost too good to be true. The latest quarter delivers ₹345 crore in sales and ₹18 crore net profit, while sales and profit are compounding at 56.42% and 32.52% respectively. Those are fast-grower numbers, yet the valuation is that of a forgotten asset. ROE of 19.97% is solid and Piotroski's F-Score of 7 out of 9 suggests operations are not deteriorating. But I see no obvious moat; this is an electrical equipment business that must earn its returns daily against competitors. More importantly, debt/equity of 2.28 bothers me. ROCE of only 14.33% against a 19.97% ROE means leverage is doing a lot of heavy lifting. If profits wobble, debt doesn't. Promoter holding of 35.87% is below what I like to see, dividends are zero, and the 52-week range of ₹16.50 to ₹46.02 shows how volatile this can be. If the ₹171.64 book value is tangible, the margin of safety is enormous at ₹24.24. If it is not, the leverage turns this asset play into a trap. I would study the annual report, receivables, and debt covenants before acting. At this price, curiosity is earned, but conviction requires hard evidence.

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