India Motor Part (IMPAL)

FairStock Score: 26/100 — RISKY

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

Key Financials

Strengths

• P/B of 0.50 and book value of ₹2049.55 mean the market price is roughly half accounting worth — a classic Graham margin-of-safety condition if the assets are genuine.
• Dividend yield of 2.87% provides some income while waiting for value to be recognised.
• Piotroski F-Score of 7/9 suggests the company's recent financial position is stable and not deteriorating.
• Sales growth of 9.13% shows the trading business is still expanding, not shrinking.

Concerns

• ROE of 3.40% and ROCE of 4.38% are very low, meaning the large book value is earning nowhere near a satisfactory return on equity.
• Profit growth of 5.40% lags sales growth of 9.13%, indicating margin compression in the latest numbers.
• FairStock Score of 23/100 is labelled 'RISKY', and the PEG ratio of 2.01 suggests the earnings growth is not cheap on a growth-adjusted basis.
• Promoter holding of 33.81% is moderate, leaving less certainty of strong insider alignment than a higher stake would provide.

AI Analysis

At ₹1015.85, IMPAL sells at half its book value of ₹2049.55, yet the P/E is 14.60. That combination catches my Graham-trained eye, but I must ask what the book value actually earns. The answer is not encouraging: ROE is only 3.40% and ROCE is 4.38%. A business earning such thin returns on such a large equity base is not a wonderful company. It may be an asset-rich situation waiting for better capital allocation, or simply a low-return trader. Sales grew 9.13% while profit grew only 5.40%, so the latest quarter's net margin of roughly 7.4% is not improving. The 2.87% dividend yield gives some reward while waiting, and the Piotroski F-Score of 7/9 suggests no immediate financial distress. But the FairStock Score of 23/100, labelled risky, and a PEG of 2.01 remind me that cheap on book is not automatically cheap on value. As Graham said, price is what you pay; value is what you get. I need evidence that the assets can generate better cash returns — or that hidden value exists in inventory, receivables, or non-core holdings. Promoter holding of 33.81% is moderate; I would prefer stronger alignment. This is not a high-quality stalwart; it is an asset play whose value depends on management improving capital efficiency or unlocking book value. I would not buy purely because of the low P/B. I would need a credible plan to convert balance-sheet strength into shareholder returns, through higher margins, buybacks, or special dividends. Until then, the margin of safety exists on paper, but business quality remains weak.

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