Lloyds Engineeri (LLOYDSENGG)

FairStock Score: 35/100 — MIXED

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

Key Financials

Strengths

• Latest quarter net profit of ₹67 Cr on ₹272 Cr sales implies a strong 24.6% net margin.
• Profit growth of 70.86% shows recent earnings momentum, while ROE is a healthy 21.87%.
• Debt/Equity of just 0.16 keeps the balance sheet conservative.
• Promoter holding of 49.06% provides reasonable owner alignment.
• Piotroski F-Score of 6/9 signals acceptable fundamental quality at this stage.

Concerns

• P/E of 34.72 and P/B of 19.02 are stretched relative to book value of ₹3.02 and sales growth of just 2.34%.
• Reported ROCE of 0.00% contradicts the high ROE and raises doubts about the quality of reported profits.
• The large gap between profit growth and sales growth suggests margins or one-off gains may not be sustainable.
• FairStock Score of 29/100 flags the stock as risky, and the 0.52% dividend yield offers little downside support.

AI Analysis

Let me begin with the obvious. This company earned ₹67 crore in the latest quarter on ₹272 crore of sales — a 24.6% net margin, exceptional for an industrial products business. Yet reported sales grew only 2.34%, while profit rose 70.86%. That gap tells me the growth is coming from margin expansion or possibly non-operating gains, not from underlying demand. I see no clear moat in a business growing sales at barely 2.34%; for a value investor, that kind of profit growth must be proven sustainable before paying a high multiple. The P/E is 34.72 and price-to-book is 19.02 against a book value of just ₹3.02. The market is pricing in years of elevated returns. The ROE of 21.87% is attractive on paper, but the ROCE is reported at 0.00%. That is a red flag: either capital employed is being mismeasured, or the operating business is not actually earning a good return. With debt/equity at 0.16, the balance sheet is conservative, and promoter holding of 49.06% gives some owner alignment. The Piotroski score of 6/9 is decent, not superb. Still, the FairStock Score is 29/100 — risky. The stock has fallen from ₹99.78 to ₹57.44, but a lower price is not automatically a bargain. At 34 times earnings and 19 times book, with sales growth barely above 2%, the PEG ratio of 0.95 only looks reasonable if the 70% profit growth repeats. Graham would insist on a margin of safety. I don't see one here. If the next quarter shows normal margins, the downside could be sharp. I would stay on the sidelines until sales growth accelerates and reported ROCE becomes credible. Good businesses, fair prices; this one is neither.

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