Intrasoft Tech. (ISFT)

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

Key Financials

Strengths

• Trades below book value: P/B 0.92 against book value of ₹83.76
• Very low debt/equity of 0.05 provides financial resilience
• Promoter holding of 43.06% aligns interests with minority shareholders
• P/E of 9.31 gives a trailing earnings yield of roughly 10.7%
• Sales still growing at 6.49% despite a competitive e-retail environment

Concerns

• ROE of 0.67% and ROCE of 6.21% are far below acceptable return thresholds
• Profit growth is negative at -2.96% even as sales grow, showing margin compression
• Piotroski F-score of 4/9 indicates weak overall financial health
• No dividend (0.00% yield) and PEG of 1.43 with negative profit growth offer little compensation for risk

AI Analysis

Looking at Intrasoft Tech, I'm reminded of Graham's core principle: price is what you pay, value is what you get. The shares trade at ₹76.94, below a book value of ₹83.76, so the P/B ratio of 0.92 suggests I'm buying a rupee of assets for 92 paise. That sounds like a margin of safety. But in investing, cheap assets that earn poor returns are often value traps. The reported ROE is only 0.67%, and ROCE is a weak 6.21%. A business that cannot generate double-digit returns on equity is not a compounding machine, no matter how low the P/E looks. The P/E of 9.31 implies a decent earnings yield, but profits declined by 2.96% even as sales grew 6.49%. That divergence tells me margins are being squeezed, likely due to competition in e-retail. In the latest quarter, ₹137 Cr of sales produced just ₹3 Cr of net profit — a hair-thin margin. The Piotroski F-score of 4/9 confirms underlying financial weakness. FairStock Score is N/A due to insufficient data, so I can't rely on a quantitative checklist. Of course, there are some positives. Debt/equity is just 0.05, so the company is not leveraged and should be able to survive rough patches. Promoter holding at 43.06% aligns interests with minority shareholders. But there is no dividend; I get no yield while waiting. The PEG of 1.43 is hardly attractive when profit growth is negative. In e-commerce, without a durable moat or scale advantages, today's low valuation may become tomorrow's low valuation. This is more of an asset play than a stodgy compounder, and I would demand a wider margin of safety before committing capital.

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