Kennametal India (KENNAMET)
StalwartFairStock Score: 29/100 — RISKY
Score breakdown: P/E: 0/3 · ROCE: 1/2 · Growth: 1/2 · Dividend: 0/1
Key Financials
| Current Price | ₹3,513.3 |
| Market Cap | ₹7,721.62 Cr |
| P/E Ratio | 55.86 |
| ROCE | 17.55% |
| ROE | 14.29% |
| Dividend Yield | 1.09% |
| Profit Growth | 184.1% |
| Debt/Equity | 0 |
| Sales Growth | 48.1% |
| Free Cash Flow | ₹34,65,000 Cr |
| Promoter Holding | 75% |
| 52-Week Range | ₹2,090.05 — ₹5,110.35 |
| Sector | Industrial Manufacturing |
| Book Value | ₹365 |
Strengths
- Zero debt on the balance sheet, providing strong financial stability
- Consistent profitability with ROE of 14.29% and ROCE of 17.55%
- High promoter holding of 75% indicates aligned long-term incentives
- Sales growth of 16.38% shows business momentum
- Piotroski F-Score of 7/9 signals overall healthy fundamentals
Concerns
- Expensive valuation: P/E of 47.70 and P/B of 6.62 with EPS growth of only ~9.91%
- Profit growth lags sales growth, implying margin compression
- Anomalous free cash flow figure (₹34.65 lakh Cr) calls reported data into question
- FairStock Score of 22/100 flags the stock as risky at current levels
AI Analysis
When I look at Kennametal India, I see a quality business – no debt at all, a clean balance sheet, and a promoter holding of 75% which aligns interests with minority shareholders. The company earns a respectable ROE of 14.29% and ROCE of 17.55%, suggesting it puts capital to work efficiently. Its Piotroski F-Score of 7/9 reinforces the picture of financial health. But I must pause at the price. At ₹2,463.40, the market cap is ₹5,319 crore, yet the company earns only about 9.91% profit growth. That translates to a P/E of 47.70 and a PEG of 3.63 – far too rich for an industrial products stalwart. Sales are growing at 16.38%, faster than profits, which tells me margins are being squeezed, possibly due to competition or rising costs. The latest quarter’s profit of ₹24 crore on sales of ₹334 crore is a thin net margin of roughly 7%, not bad, but not justifying such a premium. The dividend yield of 1.65% offers little comfort while you wait. Also, the reported free cash flow of ₹34.65 lakh crore is patently absurd compared to the market cap – I would discard that number entirely and demand a corrected figure. With the 52-week range showing the stock has nearly halved from its high, value is improving, but I want a margin of safety. At this price, I am not a buyer. I would wait for a meaningful pullback – ideally a P/E closer to 25 – or a sustained acceleration in profit growth to justify the optimism. For now, this is a fine business but a risky investment.
Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer