Grauer & Weil (GRAUWEIL)

FairStock Score: 32/100 — RISKY

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

Key Financials

Strengths

• Near-zero leverage (D/E 0.01) provides balance sheet resilience through commodity downcycles.
• Strong capital efficiency: ROCE 23.34% and ROE 16.38% despite difficult profit conditions.
• Promoter holding of 69.03% aligns management interest with minority shareholders.
• Latest quarter delivered ₹32 Cr net profit on ₹291 Cr sales, indicating an ~11% margin.

Concerns

• At P/E 20.21, the stock prices in stability, yet profit growth is -25.02%; valuation is not supported by earnings momentum.
• Piotroski F-Score of 4/9 suggests deteriorating financial health and rising red flags.
• PEG of 3.51 is high for a business with only 5.76% sales growth; negative profit growth makes the multiple even more uncomfortable.
• Commodity chemicals generally lack pricing power; with dividend yield of just 0.80%, shareholders receive little while waiting.

AI Analysis

At ₹73.09, Grauer & Weil is being priced as if it has something special, but I see a commodity chemical business with a price-earnings ratio of 20.21 and a profit decline of 25.02%. The market cap is ₹2,834 Cr. Let me start with strengths: return on capital employed is 23.34%, return on equity is 16.38%, and debt/equity is 0.01. That is a solid financial base. Promoter holding of 69.03% suggests ownership is aligned, at least in structure. But a fine balance sheet cannot turn a price taker into a pricing-power franchise. In commodity chemicals, there is little moat; customers buy on price and availability. Sales grew only 5.76%, while profits fell sharply. That tells me growth is not converting into earnings. The Piotroski F-score of 4 out of 9 is a warning sign on financial quality. The PEG of 3.51 makes no sense for a business with negative profit growth; you are paying a rich multiple for deteriorating earnings. Book value is ₹18.55, so at ₹73.09 I am paying 3.94 times book. The FairStock score of 29/100 flags this as risky, and Graham would call that speculative. A ₹291 Cr quarter with ₹32 Cr net profit is decent on the surface, but one quarter does not change the trend. Dividend yield of 0.80% offers little compensation while I wait. This is a cyclical commodity-chemical company, not a stalwart. I do not need to own every business; I need to own understandable, growing earnings at a sensible price. Here, the earnings are going backward and the price is not. I would put this on the watchlist, not in the portfolio. For patient investors, wait for a better price, or for proof that the profit decline has reversed. Until then, caution is the right word.

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