Nahar Poly (NAHARPOLY)

FairStock Score: 26/100 — RISKY

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

Key Financials

Strengths

• Low headline valuation: P/E of 8.36 and P/B of 1.30 against book value of ₹202.53
• Minimal leverage with debt/equity of just 0.11 and high promoter holding of 72.28%
• Profitability improved sharply, with latest quarter net profit of ₹19 Cr on sales of ₹167 Cr and profit growth of 157.39%
• Piotroski F-Score of 6/9 suggests sound near-term financial health

Concerns

• Sales growth is negative at -3.17%, yet profit growth is 157.39%, raising questions about earnings quality and sustainability
• ROCE of only 6.46% is weak, indicating poor underlying capital productivity despite low debt
• Dividend yield of 0.41% offers little compensation while waiting for value to be recognized
• PEG of 0.05 looks exaggerated unless the earnings surge proves durable, which shrinking sales does not confirm

AI Analysis

When I examine Nahar Poly, I try to look beyond the headline numbers. The company trades at a P/E of 8.36, with a market cap of ₹606 Cr, and has a P/B of 1.30 against a book value of ₹202.53. On the surface, that appears reasonably cheap, and the low debt-to-equity of 0.11 gives me comfort that the business is not leveraged to the hilt. Promoter holding of 72.28% aligns interests with minority shareholders, and the Piotroski F-Score of 6 suggests decent fundamental signals. However, I must be honest: this is not a wonderful business. Return on capital employed is just 6.46%, while ROE is 11.91%. The gap between the two, with minimal debt, tells me the reported profits may be driven by non-operating items or a low tax base. Sales have declined by 3.17%, yet profit jumped 157.39%. That extraordinary profit growth is likely from a low base or margin tailwinds, not durable top-line strength. In the latest quarter, Nahar Poly earned ₹19 Cr on sales of ₹167 Cr, a margin near 11%, but I would want to see if that can persist. The dividend yield is only 0.41%, so the patient investor receives little while waiting. With a PEG of 0.05, the market is pricing in explosive growth—too good to be true given shrinking sales. In the Graham tradition, I demand a margin of safety. At 1.3 times book, with weak ROCE, I am not getting a substantial discount. The 52-week range of ₹200 to ₹338 shows volatility. I would need to see sales stabilize and ROCE head higher before calling this a bargain. For now, it is a cyclical packaging play with a tempting earnings yield, but not a clear deep-value gem.

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