Narmada Agrobase (NARMADA)

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

Key Financials

Strengths

• Low financial leverage with debt/equity of 0.18 and a Piotroski F-score of 7/9.
• ROE of 19.98% and ROCE of 13.05% show reasonable capital efficiency.
• Sales growth of 54.26% and quarterly revenue of ₹21 Cr indicate strong top-line momentum.
• Promoter holding of 50.30% provides moderate ownership alignment.

Concerns

• Profit growth is only 1.00% despite 54.26% sales growth, suggesting severe margin pressure.
• Valuation is rich at P/E of 32.35 and P/B of 6.72, with zero dividend yield.
• Animal feed is a commodity business with likely weak pricing power and cyclical earnings.
• Latest quarterly net profit of ₹1 Cr on ₹21 Cr sales is a very thin margin, leaving little safety cushion.

AI Analysis

Let me start with what I like: a debt/equity of 0.18 and a Piotroski F-score of 7/9 suggest the balance sheet has not been stretched to chase this growth. With return on equity near 19.98%, capital allocation looks reasonable. But I cannot ignore the gap between sales growth of 54.26% and profit growth of just 1.00%. Revenue can grow quickly in animal feed because it is a commodity business tied to input prices, but if the bottom line does not follow, that growth is often just passing higher costs through. The latest quarter earned only ₹1 Cr on ₹21 Cr of sales, a thin margin that leaves little room for error. At ₹34.12, the market capitalisation is ₹124 Cr, while book value is just ₹5.08 per share. A P/B of 6.72 and a P/E of 32.35 are rich for a company whose profits are flat. The PEG of 0.79 seems to assume future profit growth will catch up with revenue growth; as a value investor, I prefer paying a fair price for earnings I can see, not hopes. The dividend yield is zero, so the only return is from price appreciation. Promoter holding of 50.30% is acceptable, but it does not create a moat. Animal feed is a low-differentiation, cyclical commodity; suppliers and customers hold power, and margins can swing. This may be a fast-growing cyclical, but at this valuation I would wait for a lower price or clear evidence that profit growth matches sales growth. If the business can translate ₹21 Cr of quarterly sales into consistently rising profits, I might reconsider; today, the price embeds too much optimism.

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