K C P (KCP)

FairStock Score: 46/100 — MIXED

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

Key Financials

Strengths

• Moderate leverage: Debt/Equity of 0.39 indicates no immediate balance sheet stress.
• Decent capital efficiency: ROE of 13.99% and ROCE of 12.99% are respectable for a cement player.
• Reasonable headline P/E of 13.11, not an extreme speculative multiple.
• Promoter holding of 44.25% provides reasonable ownership alignment.

Concerns

• Profit growth is negative at -5.60%, while sales growth is only 2.28%; latest quarterly net margin is just ₹17 Cr on ₹614 Cr sales, around 2.8%.
• Piotroski F-Score of 4/9 suggests deteriorating financial fundamentals.
• P/B of 3.34 and PEG of 5.75 imply expensive valuation for low growth, with a negligible dividend yield of 0.16%.
• FairStock Score of 31/100 signals elevated risk, with the stock nearer the upper end of its 52-week range.

AI Analysis

KCP appears cheap at first glance, with a P/E of 13.11 and market cap of ₹2,038 Cr. But Graham taught me that price is what you pay, value is what you get. Here, what I get is a cement business with sales growth of only 2.28% and profit down 5.60%. In the latest quarter, it earned ₹17 Cr on sales of ₹614 Cr, a net margin of just 2.8% -- that is very low for a capital-intensive cement maker. The ROE of 13.99% and ROCE of 12.99% are respectable, but the price-to-book of 3.34 means I am paying ₹3.34 for every ₹1 of book value in a business without pricing power. That is no margin of safety. The balance sheet is not frightening: debt/equity of 0.39 is manageable. But the Piotroski F-score of 4/9 worries me more; it suggests the financial fundamentals are deteriorating rather than strengthening. The dividend yield of 0.16% is almost nothing, so there is no income support. The PEG ratio of 5.75 reinforces that growth is being priced far too generously for a company growing sales at 2.28%. Promoter holding of 44.25% is an encouraging sign of alignment, but good ownership cannot overcome cement being a commodity product in a cyclical industry. At ₹177.95, near the upper-middle of its 52-week range of ₹125 to ₹212.70, the risk-reward is unattractive. This has the feel of a cyclical company at a point in its cycle where margins are compressed and growth has stalled. I would wait for a lower price, better margins, and an improving F-score. No business is too wonderful to overpay for, and KCP at this price does not pass my test.

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