Harsha Engg Intl (HARSHA)

FairStock Score: 27/100 — RISKY

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

Key Financials

Strengths

• Strong recent growth: sales up 20.74% and profit up 25.89%, with latest quarter net profit of ₹34 crore.
• Conservative balance sheet: debt/equity of 0.24 and Piotroski F-Score of 7/9 indicate financial health.
• High promoter holding of 75% aligns management interests with minority shareholders.
• Positive growth versus valuation: PEG of 1.17 suggests the growth is not entirely overpriced if it persists.

Concerns

• Valuation is not cheap at P/E of 27.20, offering little margin of safety at ₹391.05.
• Moderate returns: ROE of 11.85% and ROCE of 12.14% do not indicate a strong economic moat.
• Shareholders receive minimal income with dividend yield of only 0.27%.
• FairStock Score of 36/100 is MIXED, and the stock remains well below its 52-week high of ₹469.

AI Analysis

At first glance, Harsha Engg Intl presents a mixed picture. A P/E of 27.20 with a return on equity of only 11.85% is not a classic Graham bargain. But there are qualities I admire. Sales grew 20.74% and profits grew 25.89%, and the latest quarter's ₹34 crore net profit on ₹409 crore sales suggests momentum is intact. The balance sheet is conservative: debt-to-equity is just 0.24, and a Piotroski F-Score of 7 out of 9 points to healthy fundamentals rather than financial engineering. Promoter holding of 75% aligns interests, though it also leaves little floating stock. Still, discipline matters. At ₹391.05, the market is paying a rich price for a business earning moderate returns on capital. ROCE of 12.14% and ROE of 11.85% do not scream wide moat. The PEG ratio of 1.17 looks reasonable only if the high growth continues, but industrials can be cyclical. A dividend yield of 0.27% means the patient investor gets almost nothing while waiting. The FairStock Score of 36/100, labelled MIXED, reinforces that this is not a clear-cut opportunity. The stock has already fallen from its 52-week high of ₹469 to ₹391.05, yet it still isn't cheap. I want a margin of safety. In Graham's words, price is what you pay, value is what you get. Here, I see a decent fast grower with a sound balance sheet, but not a wonderful business at a wonderful price. I would wait for either a better price or proof that returns on equity can move sustainably higher.

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