Kewal Kir.Cloth. (KKCL)

FairStock Score: 46/100 — MIXED

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

Key Financials

Strengths

• Sales growth of 18.01% and profit growth of 38.86% show strong recent momentum
• PEG ratio of 0.79 suggests growth is not fully overpriced despite the P/E of 22.41
• ROE of 17.15% and ROCE of 18.19% indicate efficient capital deployment
• Piotroski F-score of 7/9 points to sound financial health
• High promoter holding of 74.27% aligns management with minority shareholders

Concerns

• P/E of 22.41 and P/B of 3.77 leave limited margin of safety for a garment maker
• Profit growth outpacing sales growth by a wide margin may not be sustainable
• Dividend yield of 0.39% means shareholders get very little income while waiting
• FairStock Score of 49/100 is mixed, suggesting the risk-reward is not clearly favorable

AI Analysis

At ₹477.60, Kewal Kir. Cloth is a ₹3,125 Cr garment business, not a stock I would buy on impulse. My first test is always return on capital. The company earns 17.15% on equity and 18.19% on capital employed. Those are respectable numbers, but they do not scream an economic moat. Apparel is a low-barrier, fashion-driven trade; what sells today can be obsolete tomorrow. Still, the numbers are not bad: sales grew 18.01% and profits jumped 38.86%. The PEG ratio of 0.79 suggests the market price is not excessive if that growth continues. But I must be careful. Profit growth much faster than sales growth often means margins are temporarily elevated; fashion margins can reverse quickly. The latest quarter shows net profit of ₹38 Cr on sales of ₹301 Cr — a 12.6% margin, decent for this industry. Financial health appears solid: Piotroski F-score 7/9, and no debt/equity ratio is given, so I cannot fully judge leverage, but the score is reassuring. Promoters own 74.27%; that aligns interests and reduces the risk of reckless capital allocation. On valuation, P/E of 22.41 is not cheap for a garment maker. Book value is ₹126.55; at ₹477.60 I am paying 3.77 times book for a 17-18% ROE. That is not a margin of safety. Dividend yield is only 0.39%, so I receive little while I wait. The FairStock score of 49/100 calls it mixed, and I agree. This is a decent growth business, but at this price, I would want a better price or a stronger moat.

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