Nephrocare Health Services (NEPHROPLUS)

FairStock Score: 25/100 — RISKY

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

Key Financials

Strengths

• Sales growth of 31.67% and profit growth of 60.32% show strong momentum.
• Latest quarter net profit of ₹32 Cr on sales of ₹260 Cr implies a healthy ~12% margin.
• Debt/Equity of 0.36 and ROCE of 14.11% indicate reasonable financial discipline.
• Promoter holding of 63.85% aligns management with minority shareholders.
• Piotroski F-Score of 7/9 points to decent overall financial health.

Concerns

• P/E of 75.76 is extremely rich, and PEG of 1.65 suggests valuation has run ahead of growth.
• No dividend at all, so investors depend entirely on future price appreciation.
• Price is down about 30% from the 52-week high of ₹767.95, showing negative momentum.
• FairStock Score of 25/100 labels the stock risky.

AI Analysis

At first glance, this is exactly the kind of stock that tests my patience. Nephrocare is growing fast — sales up 31.67% and profits up 60.32% — but at ₹5,958 crore market cap with a P/E of 75.76, the market is paying a rich price. Graham would say price is what you pay, value is what you get. Here, I'm not certain what value I'm getting. The balance sheet is not scary: debt/equity is 0.36 and ROCE is 14.11%, which is respectable. Promoters own 63.85%, so their interests are aligned. The Piotroski F-Score of 7/9 suggests financial health is okay. Latest quarter shows ₹260 crore sales and ₹32 crore net profit, roughly 12% net margin. But I cannot ignore the warning signs. No dividend means I am completely dependent on capital appreciation. The stock trades at ₹539.40, far below its 52-week high of ₹767.95 — that is a 30% drawdown. The FairStock Score calls it risky at 25/100. The growth is real, but at a PEG of 1.65, even the growth is not enough to justify the multiple. I would need profit growth to continue at 60% for years, and that is a bold assumption. Book value is ₹391.25, so P/B is 1.38, but earnings power, not assets, sets the value for a service business. I would call this a fast grower, not a stalwart. The moat is not visible from these numbers. If the company can maintain its growth and improve returns on capital, the story gets better. But as a disciplined investor, I would wait for a lower price and clearer evidence of a durable competitive advantage.

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