Guj. Raffia Inds (GUJRAFFIA)

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

Key Financials

Strengths

• Clean balance sheet with D/E of just 0.10
• Piotroski F-Score of 7/9 suggests reasonably good financial health
• Sales growth of 291.8% shows strong revenue momentum, albeit from a small base
• P/B of 1.16 with book value of ₹36.49 offers some downside cushion
• Profit growth of 37.5% and PEG of 0.17 indicate potential value if earnings normalize

Concerns

• Latest quarter net profit is ₹0 Cr despite ₹24 Cr sales — earnings conversion is missing
• ROE of 3.49% and ROCE of 3.97% are very low for the price paid
• P/E of 27.58 is expensive for a company with so little profit; the PEG ratio depends on continued high growth
• No dividend and promoter holding of 39.6% provide limited cash return or insider comfort

AI Analysis

At ₹42.50, this is a ₹20 crore micro-cap in packaging. The first rule is to know what you own, and frankly, this is too small and too low-returning to command a wide moat. The balance sheet is the most comfortable part: debt/equity is only 0.10, book value is ₹36.49, and a Piotroski F-Score of 7/9 suggests financial discipline. But discipline is not the same as profitability. ROE is just 3.49% and ROCE 3.97%; the latest quarter shows sales of ₹24 crore and net profit of ₹0 crore. That tells me the business can generate revenue but struggles to convert it into shareholder earnings. The huge 291.8% sales growth and 37.5% profit growth look exciting, but a zero-profit quarter punctures that enthusiasm. Valuation is tricky: P/B of 1.16 means I am only paying slightly above book value, but P/E of 27.58 is not cheap for such thin earnings. A PEG of 0.17 appears wonderful, but only if current growth is sustainable—I doubt high growth from a tiny base is a dependable margin of safety. The stock has fallen from ₹88 to ₹42.50, so the market is not enthusiastic. I would classify this as a turnaround/watch candidate, not a Buffett stalwart. I want to see improving margins, a profitable quarter, and continued low debt before committing. Promoter holding at 39.6% is moderate, so I would also watch whether insiders have skin in the game. In short, price gives some asset protection, but earnings do not yet justify optimism.

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