Laxmi Organic (LXCHEM)

FairStock Score: 25/100 — RISKY

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

Key Financials

Strengths

• Low debt-to-equity of 0.17 provides a financial cushion during the downturn.
• Promoter holding of 69.35% aligns owner interests with minority shareholders.
• Quarterly sales of ₹719 Cr show the company still has a substantial operating base.
• Price is closer to the 52-week low of ₹107.60 than the high of ₹241.00, leaving room for re-rating if fundamentals recover.

Concerns

• ROE of 4.44% and ROCE of 8.56% indicate weak returns on invested capital.
• Sales growth of -8.60% and profit growth of -13.31% show worsening business momentum.
• P/E of 43.86 is expensive, especially with declining earnings and a Piotroski F-Score of only 3/9.
• FairStock Score of 0/100 flags the stock as fundamentally risky; net profit margin in the latest quarter is only about 3.5%.

AI Analysis

Let me begin with what I see: this is not a business I can call wonderful at first glance. Laxmi Organic trades at ₹143.10, or a P/E of 43.86, and yet its sales have declined by 8.60% and profits have fallen 13.31%. Charlie and I ask what a business will be worth in ten years; paying 44 times earnings for falling earnings makes the arithmetic very hard. The return on equity is 4.44%, and return on capital employed is 8.56% — numbers far below what a compounder should produce. The latest quarter gives ₹719 Cr in sales and only ₹25 Cr in net profit, a margin of roughly 3.5%. That is not pricing power. On the positive side, the balance sheet is sound: debt-equity is only 0.17, and promoters own 69.35%, so skin in the game is good. Book value is ₹71.22, so the market is asking 2.01 times book for an asset earning an inadequate return. The Piotroski F-Score of 3 out of 9 tells me financial health has deteriorated. The dividend yield of 0.40% offers little compensation while I wait. At ₹143, the stock is well below the ₹241 high, but a falling price only matters if the underlying earning power is intact; here it is not obvious. This looks like a cyclical business in a downcycle, selling as if its best times are guaranteed. FairStock scores it 0/100, risky. As Graham said, the investor's chief problem is himself; I won't let hope replace evidence. I will wait for stabilised margins, better return ratios, and a genuine margin of safety before acting.

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