Nava (NAVA)

FairStock Score: 73/100 — STEADY

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

Key Financials

Strengths

• Low leverage (D/E 0.20) and ₹887 Cr free cash flow provide a solid financial cushion.
• ROCE of 17.17% with Piotroski F-Score 7/9 suggests efficient capital use and strong operating health.
• Promoter holding of 50.10% aligns owner interest and adds stability.
• Latest quarter net margin of roughly 33% (₹326 Cr profit on ₹991 Cr sales) shows operating efficiency.
• Consistent 5-year revenue CAGR of 9.35% reflects steady core demand.

Concerns

• Profit growth of -15.92% and PEG of 7.50 mean earnings are contracting despite a rich multiple.
• Price is about 58% above the Graham Number of ₹433.05, leaving a negative margin of safety; DCF value of ₹136.89 is much lower.
• Altman Z-Score of 2.44 is in the grey zone, warranting balance-sheet vigilance.
• ROE of 11.74% and dividend yield of 1.34% are modest for a power generation business.

AI Analysis

At ₹685.95, Nava trades at 18.83 times earnings and 2.55 times book. Graham would remind me that price is what you pay, value is what you get. The Graham Number of ₹433.05 suggests the margin of safety is missing; the DCF figure is even lower at ₹136.89. So the growth must be extraordinary to justify this price, but with a PEG ratio of 7.50 and profit growth of -15.92%, the opposite is true. The business does have some qualities: debt/equity of only 0.20, ROCE of 17.17%, free cash flow of ₹887 Cr, and a Piotroski score of 7/9. These point to a financially stable operator, not a distressed one. In power generation, a stable operator with 17% ROCE may have some local cost or contractual advantage, but the recent profit decline tells me the moat is not widening. ROE of 11.74% is moderate; five-year revenue CAGR of 9.35% is steady but unspectacular; and latest quarter sales of ₹991 Cr produced net profit of ₹326 Cr. Sales growth of 7.12% with profit falling means operating leverage is currently working against shareholders. Altman Z-Score of 2.44 sits in the grey zone, so balance-sheet health deserves monitoring despite low leverage. Promoter holding at 50.10% is decent, but dividend yield of 1.34% offers little income cushion. My discipline: I need a wonderful business at a fair price, not a fair business at a wonderful price. Here the valuation already discounts quality, while recent earnings decline and expensive PEG make the near term unattractive. I would keep Nava on my watchlist but not buy at this price. A fall closer to book value or the Graham Number would make its financial strength far more interesting.

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