Indo Amines (INDOAMIN)

FairStock Score: 50/100 — MIXED

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

Key Financials

Strengths

• ROE of 24.38% and ROCE of 18.32% indicate strong capital efficiency
• P/E of 11.12 gives an earnings yield of roughly 9% for a business with high returns
• Piotroski F-Score of 7/9 points to sound financial fundamentals
• Promoter holding of 58.42% aligns management with minority shareholders
• Positive but moderate sales growth of 7.18% and profit growth of 4.95%

Concerns

• Profit growth of only 4.95% and PEG of 1.83 make the stock fairly valued at best, not cheap
• Debt-to-equity of 0.85 adds financial risk, especially if the chemical cycle turns
• Latest quarter's net margin is thin: ₹12 Cr net profit on ₹277 Cr sales, about 4.3%
• Price of ₹113.15 is well above book value of ₹40.31; the premium depends on sustained high returns

AI Analysis

At ₹113.15, Indo Amines presents a typical value-investing puzzle. The obvious attractions are ROE of 24.38% and ROCE of 18.32%—both well above what I expect from an ordinary chemical company. A high return on equity at a P/B of 2.81 is not cheap, but it is justified if the business can keep earning well above its cost of capital. The P/E of 11.12 gives me an earnings yield of nearly 9%, which provides a modest margin of safety if no further deterioration occurs. The Piotroski score of 7/9 is reassuring; it says the financial statements are not lying to me. Promoter holding of 58.42% also keeps management aligned with public shareholders. But I must be honest about the growth. Sales grew only 7.18% and profits just 4.95%. At this pace, the PEG of 1.83 makes the valuation look fair but not compelling. The latest quarter shows ₹277 Cr of sales translating into only ₹12 Cr of net profit—a thin margin that reveals limited pricing power. Debt-to-equity of 0.85 is another concern; leverage may flatter returns in good times but will hurt if the cycle turns. The dividend yield of 0.46% means I cannot wait for income while holding. Book value is ₹40.31, so paying ₹113.15 means the market values the franchise at over two and a half times what is on the books. That is acceptable for a wonderful business, but not for a slow grower with single-digit profit expansion. I would need to see acceleration in sales and margins, or a lower price closer to book, before calling this an exceptional buy. For now, it’s a decent business at a reasonable price—not the fat pitch I look for.

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