Nilkamal Ltd (NILKAMAL)

FairStock Score: 41/100 — MIXED

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

Key Financials

Strengths

• Debt/Equity is low at 0.36, giving financial cushion
• Sales growth of 12.61% shows real demand
• Profit growth of 63.73% and PEG of 0.45 suggest earnings momentum at a reasonable price
• Promoter holding of 64.54% aligns interests with minority shareholders
• Piotroski F-Score of 7/9 indicates broadly sound financials

Concerns

• ROE of 7.36% and ROCE of 9.57% are well below what I would expect from a high-quality franchise
• Latest quarter net profit of ₹25 Cr on sales of ₹962 Cr implies a very thin margin, leaving little room for error
• Stock has fallen sharply from its 52-week high of ₹1,960 to ₹1,330, reflecting market skepticism
• P/B of 1.58 with low ROE means paying a premium to book for modest returns

AI Analysis

Investing is about paying a fair price for a decent business. Nilkamal's numbers tell me this is not a wonderful business by my standards, but it may be a reasonably priced one. The company earns only 7.36% on equity and 9.57% on capital; those returns are mediocre. I would want a higher ROE to call it a franchise. However, it carries only 0.36 debt to equity and promoter holding is high at 64.54%, so existing owners have skin in the game. The reported profit growth of 63.73% is eye-catching, but I must ask whether it is sustainable. Sales grew 12.61%, so there is some genuine demand. At ₹1,330, the P/E is 17.36 and PEG is 0.45, which suggests the market is pricing in continued growth. Yet the latest quarter's net profit of ₹25 crore on sales of ₹962 crore is a very thin margin, so there is little room for error. Book value is ₹840; at 1.58 times book, I am paying a premium for a business that earns modest returns. The 52-week range shows it has fallen from ₹1,960 to ₹1,330, reminding me that Mr Market is moody. I would not call this a stalwart; it looks more like a cyclical or recovery situation where profit has bounced sharply. My discipline: I like the low debt and the 7/9 Piotroski score, but I would only invest if I see margins expanding and the 63% profit growth not being a blip. In the end, a fair price must come with a business I can trust. Nilkamal is not a bad business, but it must prove it can earn better returns on its assets before I get excited. The margin of safety is modest.

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