National High (NHIT)

FairStock Score: 43/100 — MIXED

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

Key Financials

Strengths

• Sales growth of 76.71% and profit growth of 58.27%, with a PEG of ~1.06, show strong recent expansion.
• Dividend yield of 6.99% is attractive on the surface for income-seeking investors.
• Piotroski F-Score of 7/9 indicates decent operational and financial discipline.
• P/B of 1.40 against book value of ₹95.82 provides some asset backing for the market cap of ₹30,021 Cr.

Concerns

• Free cash flow is deeply negative at -₹16,210 Cr, raising doubts about whether the dividend is truly cash-covered.
• P/E of 71.47 is very high, especially when ROCE is only 3.38%.
• Debt/equity of 1.01 combined with negative free cash flow creates balance-sheet risk.
• The 52-week range shows no meaningful price history (₹133.75–₹133.75), so past market behaviour cannot be assessed.

AI Analysis

Let me start with what I like. National High owns road concessions—toll, annuity, and hybrid-annuity—which are tangible infrastructure assets with long-duration revenue contracts. That gives me some comfort about the durability of the underlying asset base. But my job is to buy value, not just assets. At ₹133.75, the market is capitalizing National High at ₹30,021 Cr. For that price, I am paying 1.40 times book value of ₹95.82, and an earnings multiple of 71.47. That is a steep price for a business earning only 3.38% ROCE. A high P/E needs growth to justify it, and growth has been strong—sales up 76.71%, profit up 58.27%, with a PEG of about 1.06. So the trailing growth is not outrageously priced. But the deeper problem is cash. Free cash flow is negative ₹16,210 Cr. A 6.99% dividend yield is attractive only if paid from real cash generation, not from debt or further equity raising. With debt/equity at 1.01, the balance sheet is not broken, but negative free cash flow is a serious warning. On the positive side, the Piotroski score of 7/9 suggests decent operating quality, and the latest quarter's ₹1,002 Cr sales with ₹112 Cr net profit shows the assets can earn money. Still, this is a high-yield, growth-flavoured infrastructure vehicle, not a Graham bargain. I would need to see positive free cash flow and a trend of falling leverage before calling it a compounding machine. Until then, I watch and wait rather than buy.

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