Goodyear India (GOODYEAR)

FairStock Score: 35/100 — MIXED

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

Key Financials

Strengths

• Very low debt/equity of 0.05 gives the balance sheet a strong safety cushion.
• High promoter holding of 74% aligns ownership with minority shareholder interests.
• Dividend yield of 2.99% provides a tangible cash return to investors.
• Profit growth of 159.81% shows recent operational recovery and margin improvement.
• ROCE of 13.01% is respectable given the low leverage.

Concerns

• Sales growth is negative at -3.93%, indicating weak top-line momentum.
• ROE of 9.65% is modest and does not justify a P/B of 3.12.
• Latest quarterly net margin is thin at roughly 4.1% (₹25 Cr profit on ₹607 Cr sales).
• P/E of 32.48 is rich, especially if the 159.81% profit jump proves non-recurring.

AI Analysis

I approach Goodyear India the way I approach any tyre company: with respect for the product cycle and suspicion of temporary numbers. The latest year shows profit up 159.81%, but sales actually down 3.93%. That immediately tells me this is not a demand-driven story; it is a margin-and-cost story. In the latest quarter, ₹607 Cr of sales produced only ₹25 Cr of net profit—a thin 4.1% margin. That is not the sign of a business with wide pricing power. The balance sheet is clean: debt/equity is 0.05, and promoter holding of 74% is reassuring. Dividend yield of 2.99% gives me some comfort. Yet a 9.65% ROE on a book value of ₹255.37 leaves little room for error, and at ₹795.85 I am asked to pay 3.12 times book and 32.48 times earnings for that return. Graham would balk. The 159.81% profit growth makes the PEG ratio look tiny at 0.20, but I do not anchor on a single year of profit rebound when sales are shrinking. If margins normalize, as tyre margins often do, the earnings power behind that P/E could evaporate. The Piotroski score of 6/9 is moderate, and the FairStock Score of 38/100 is mixed—both tell me to keep my enthusiasm in check. I need a margin of safety. At this price, with declining top line and modest return on equity, I do not see one. Goodyear India may be in a good profit patch, but today it looks more like a cyclical business than a compounder I can own for decades. I will wait for a lower price or clear evidence that ROE and sales are durably improving.

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