Lambodhara Text. (LAMBODHARA)

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

Key Financials

Strengths

• Promoter holding is high at 73.17%, aligning management with minority shareholders.
• Conservative leverage with debt/equity of 0.32 provides a cushion through textile cycles.
• Price-to-book of 0.97 means the stock trades slightly below book value of ₹110.38.
• P/E of 13.59 is reasonable, and F-score of 6/9 suggests moderate financial health.
• Profit growth of 57.89% shows some earnings recovery, though from a low base.

Concerns

• ROE of 7.01% and ROCE of 9.10% are weak; the business is not generating high returns on capital.
• Sales growth is negative at -2.86%, and latest quarter net margin is only ₹2 Cr on ₹59 Cr sales.
• Dividend yield of 0.47% is negligible, offering little cash return to minority investors.
• PEG of 0.23 is misleading if the profit jump is cyclical rather than sustainable.

AI Analysis

When I look at Lambodhara Text, I see a small, boring textile company, not a wonderful business. The numbers tell me this is a cyclical commodity operation, not a franchise with pricing power. At ₹107.60, I can buy one rupee of book value for 97 paise—P/B 0.97. That sounds like Graham, but value must be judged with quality. Book value is ₹110.38 per share, yet ROE is only 7.01% and ROCE is 9.10%. Earning 7% on equity is barely above a fixed deposit; it doesn't create much wealth. The latest quarter shows net profit of just ₹2 Cr on sales of ₹59 Cr—a thin 3.4% margin. Profit growth of 57.89% looks impressive, but from a low base; sales growth is negative at -2.86%. A growing profit while sales shrink usually means cost cuts or raw material tailwinds, not enduring competitive advantage. That makes the PEG of 0.23 misleading. The balance sheet is manageable: debt/equity 0.32, and F-score 6/9 shows reasonable financial health. Promoters own 73.17%, so interests are aligned, and the dividend yield is a negligible 0.47%. I would not call this a great business. At 13.59 times earnings and around book value, the price is not obviously cheap after adjusting for mediocre returns. For a textile cyclical, I need a margin of safety either from a stronger balance sheet or higher margins. As Graham said, price is what you pay, value is what you get. Here, I get an ordinary business at a fair price, not a bargain. I'd wait for either a lower price, or evidence that sales and returns can sustainably improve.

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