KN Agri Resource (KNAGRI)

FairStock Score: 22/100 — RISKY

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

Key Financials

Strengths

• Low leverage with Debt/Equity of 0.13 provides a financial buffer.
• P/B of 1.36 against book value of ₹145.99 is reasonable.
• ROCE of 14.75% suggests decent capital efficiency.
• Promoter holding of 68.86% aligns ownership with minority shareholders.
• Sales growth of 7.90% shows moderate demand despite commodity pressures.

Concerns

• Profit growth declined 26.38%, and the latest quarter earned only ₹5 Cr net profit on ₹513 Cr sales, implying a razor-thin margin.
• Piotroski F-Score of 4/9 signals weak fundamentals and earnings quality.
• No dividend means minority investors get no cash return.
• Edible oil is a commodity-like business with limited pricing power and cyclical margin risk.

AI Analysis

At first glance, KN Agri Resource has some numbers a value investor can appreciate. The stock is ₹198.79, but book value is ₹145.99, so I'm paying about 1.36 times book. The P/E is 12.87, and debt to equity is only 0.13. Promoters own 68.86%, so their interests are broadly aligned. ROCE of 14.75% is respectable. But Graham taught me to judge the business first, not the price. This is an edible oil business, and edible oil is a commodity. In such businesses, the seller is a price taker and margins get squeezed by raw material cycles. The latest quarter tells the story: sales of ₹513 Cr produced just ₹5 Cr net profit — a net margin near 1%. Over the year, profit growth is down 26.38%, while sales are up only 7.90%. That is not the profile of a franchise with pricing power. The Piotroski F-score of 4/9 makes me cautious; it suggests weak earnings quality. There is no dividend, so my return depends on either margin recovery or multiple expansion. The PEG of 1.63 is not compelling when earnings are falling. A low P/E can be a value trap if earnings are not maintained. This looks like a cyclical business, not a compounder. The balance sheet is fine, and the low leverage is a comfort. But I would need a wider margin of safety before putting money here. I want to see margin stability, proof that ₹5 Cr quarterly profit isn't the new normal, and evidence that management can deploy retained earnings wisely. Until then, I prefer to wait.

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