K P R Mill Ltd (KPRMILL)

FairStock Score: 60/100 — STEADY

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

Key Financials

Strengths

• Very low leverage with Debt/Equity of 0.06
• Strong free cash flow of ₹951 Cr
• Healthy ROE of 16.87% and ROCE of 19.84%
• Solid financial health indicated by Altman Z-Score of 5.72 and Piotroski F-Score of 7/9
• High promoter holding of 67.52% aligns interests

Concerns

• Expensive valuation: P/E 36.37, P/B 6.34, EV/EBITDA 31.03
• No margin of safety: price far above Graham Number ₹284.89 and DCF value ₹321.58
• Profit growth of 3.47% is lagging sales growth of 8.78%, indicating margin pressure
• Very low dividend yield of 0.56% does not compensate while waiting

AI Analysis

Let me analyze KPR Mill as I would any business. First, I want a company with a durable advantage and sound financial health. KPR has some qualities to admire: a rock-solid balance sheet with debt-to-equity of 0.06, and it generates real cash — free cash flow of ₹951 crore. Promoter holding of 67.52% means management's interests are aligned with mine. Return on equity of 16.87% and ROCE of 19.84% suggest decent capital allocation, though not extraordinary. But price is the key. At ₹927.15, the market is asking ₹36.37 for every rupee of earnings, 6.34 times book, and 31.03 times EV/EBITDA. My friend Graham would say there is no margin of safety. The Graham Number is only ₹284.89, and a conservative DCF comes to ₹321.58. I am being asked to pay nearly three times that. That is not investing; it is paying up for hope. The growth story is real but moderate: 5-year revenue CAGR of 12.61%, yet latest profit growth is just 3.47% on sales growth of 8.78%. That tells me margins are being squeezed. PEG of 7.53 is far too rich. With a dividend yield of 0.56%, you are not being paid to wait. Altman Z-Score of 5.72 and Piotroski F-Score of 7/9 tell me the business is healthy, so I am not worried about bankruptcy. My problem is not the company — it is the price. A wonderful textile franchise can still be a poor investment if bought at the wrong price. I would keep it on my watchlist and wait for a much lower price, one that provides a margin of safety by Graham standards.

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