I G Petrochems (IGPL)

FairStock Score: 30/100 — RISKY

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

Key Financials

Strengths

• Price-to-book of 1.01 with book value of ₹421.19 provides some asset cushion.
• Debt/equity is only 0.31, so the balance sheet is not heavily leveraged.
• Promoter holding of 68.74% indicates strong insider alignment.
• Dividend yield of 2.77% offers possible income if it remains sustainable.

Concerns

• Latest quarter is a ₹11 Cr net loss and profit growth is -138.05%, so current earning power is negative.
• Sales are down 16.62%; commodity chemicals lack pricing power and durable moats.
• Piotroski F-Score of 3/9 and FairStock Score of 0/100 suggest poor financial health.
• ROE of just 0.54% is far below an acceptable return on shareholder capital.

AI Analysis

At first glance, IG Petrochems looks like the kind of stock Ben Graham might inspect: price ₹425 against book value ₹421, so P/B is 1.01, dividend yield 2.77%, and promoter holding 68.74%. But Graham taught that price near book is not enough; the business must generate a fair return on that book. Here ROE is 0.54%, ROCE is 10.89%, and the latest quarter recorded a ₹11 crore net loss on ₹465 crore sales. Sales have fallen 16.62%, and profit growth is minus 138.05%. The P/E is shown as zero because trailing earnings are absent; it is not a valuation measure, it is a warning sign. Commodity chemicals are price-takers with no durable moat, and the operating numbers confirm the cycle is against the company. The Piotroski F-Score of 3 out of 9 and FairStock Score of 0 out of 100 strengthen my caution. There are some positives: debt/equity is 0.31, so the balance sheet is not stretched, and a high promoter stake aligns management with minority shareholders. But with negative earnings, the 2.77% dividend is not being earned and may not be safe. In Buffett's language, this is not a wonderful business at a fair price; it is a mediocre business at a price that merely appears fair. Book value offers a cushion, but a shareholder's real protection comes from future earning power, not historical assets. I need evidence of a turnaround: sales growth, positive quarterly profits, and a sustained rise in ROCE. Until then, the margin of safety is inadequate. I will wait, not speculate.

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