Khaitan (India) (KHAITANLTD)

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

Key Financials

Strengths

• High ROE of 28.59% indicates strong shareholder returns on equity
• Sales and profit growth of ~50% and ~58% respectively show rapid expansion
• Debt/Equity of 0.38 suggests a conservative capital structure
• Promoter holding of 60.24% aligns interests with minority shareholders
• Low P/E of 6.04 and PEG of 0.11 imply significant undervaluation relative to growth

Concerns

• ROCE reported as 0.00% conflicts with ROE, signalling possible data error or hidden operational issues
• Latest quarter net profit margin is only 3.7% (₹1 Cr on ₹27 Cr sales), indicating thin profitability
• No dividend yield offers no income cushion, common for small growth companies but risky
• Microcap status (₹45 Cr market cap) makes the stock vulnerable to volatility and liquidity problems

AI Analysis

Let's look at Khaitan (India) through the lens of a business owner. The first thing that catches my eye is the price: at ₹120.95, the market cap is just ₹45 crore. That's a microcap, and I must be honest—small size brings fragility. But the numbers tell an interesting story. P/E of 6.04 is cheap, especially when profits are growing at 58%. Even with a 50% sales growth, the PEG ratio of 0.11 suggests the market is dramatically underpricing this growth. ROE is a sparkling 28.59%, and debt-to-equity is only 0.38, so the balance sheet isn't a worry. Promoter holding of 60.24% aligns owners with minority shareholders, which I appreciate. But I'm not blind to the cracks. ROCE shows as 0.00%, which is nonsensical given the ROE; either the data is flawed, or the company's capital efficiency is far worse than it appears. I'd demand an explanation before investing a rupee. The latest quarter shows sales of ₹27 crore but net profit of just ₹1 crore—a thin 3.7% margin. That's a red flag for a consumer electronics firm in a competitive, low-margin industry. Also, no dividend at this stage: management is reinvesting, or cash is tight. At book value of ₹49.40, the P/B of 2.45 isn't dirt cheap, but the earnings power justifies some premium if growth continues. This looks like a fast grower, but the quality of earnings needs scrutiny. I want to see whether those growth rates translate into consistent cash flows and whether ROCE improves. If the company can sustain even half its growth, the price gives a margin of safety. But in microcaps, patience is key, and one bad quarter can change the story.

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