Le Merite Export (LEMERITE)
CyclicalFairStock Score: 26/100 — RISKY
Score breakdown: P/E: 0/3 · ROCE: 0/2 · Growth: 2/2 · Dividend: 0/1
Key Financials
| Current Price | ₹455.25 |
| Market Cap | ₹1,137.9 Cr |
| P/E Ratio | 25.18 |
| ROCE | 7.8% |
| ROE | —% |
| Dividend Yield | 0% |
| Profit Growth | 700% |
| Debt/Equity | 0.66 |
| Sales Growth | -23.1% |
| Promoter Holding | 59.65% |
| 52-Week Range | ₹17.73 — ₹537.85 |
| Sector | Textiles & Apparels |
| Book Value | ₹52.77 |
AI Analysis
AI-generated, general educational analysis — not personal investment advice.
Let me assess Le Merite Export the way Graham would. The market cap is ₹1,138 Cr, but the latest quarter brings only ₹73 Cr of sales and ₹2 Cr of net profit. That implies an annual profit of roughly ₹8 Cr against a price-earnings multiple of 87. In other words, I am being asked to pay more than eight times book value of ₹52.77 for a business that earns just 7.8% on capital employed. That is not investing; it is paying up for hope. Sales fell 22.92%, and the 780% profit growth is from a very low base. The latest net margin is under 3%, which gives no margin of safety in a competitive textile export business. Debt/equity of 0.66 is manageable, but with declining turnover and thin profits, debt becomes a burden rather than a tool. Promoter holding at 59.65% is positive, and the Piotroski score of 6 suggests some operational improvement. Still, these factors do not justify 8.63 times book value for a company earning 7.8% ROCE. The 52-week range of ₹19.52 to ₹537.85 tells me this is a speculative re-rating, not a gradual compounding story. There is no dividend to cushion the wait. FairStock score of 26 confirms the risk. As Buffett says, it is far better to buy a wonderful company at a fair price than a fair company at a wonderful price. This is a tiny, cyclical, low-margin textile exporter at an extraordinary price. I will watch from the sidelines until sales stabilise, margins expand, and capital returns improve materially. If the business can show consistent quarterly earnings and better ROCE, I may revisit. But at ₹455.25, the market is pricing perfection that the fundamentals do not yet reveal.
The full AI analysis, bull and bear case and key monitorables are in FairStock Pro.
Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer