Nova Agritech (NOVAAGRI)

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

Key Financials

Strengths

• Low debt-to-equity of 0.23 provides balance-sheet cushion
• ROCE of 16.39% shows reasonable operating capital efficiency
• Promoter holding of 59.39% keeps management's interests aligned with minority shareholders
• Price is well below the 52-week high of ₹53.74, resetting expectations

Concerns

• Profit growth is down 75.28% and sales growth is down 24.54%, showing severe business deterioration
• Latest quarter net profit of ₹3 Cr annualises to around ₹12 Cr, making the effective P/E closer to 23 than the headline 14.87
• Piotroski F-score of 3/9 suggests worsening financial health and possible trouble ahead
• ROE of 6.16% is weak, and the zero dividend yield offers no compensation while waiting

AI Analysis

When I look at Nova Agritech, I see a statistically cheap stock that fails Graham's most important test: earnings power. The market cap is ₹274 crore, and book value is ₹17.34 per share, so the stock trades at 1.66 times book. That is not a margin of safety for a company whose earnings are collapsing. The reported P/E of 14.87 is based on trailing profits that no longer exist. Last quarter's net profit was only ₹3 crore. Annualise that, and you get roughly ₹12 crore, which puts the current price on an earnings run-rate multiple near 23, not 15. Sales are down 24.54% and profits are down 75.28%. The Piotroski F-score of 3 out of 9 reinforces the warning: this business is financially deteriorating, not healing. Fertilisers are a commodity-like input business. Nova Agritech has no obvious durable moat, no pricing power, and no dividend to pay me while I wait. ROE of 6.16% is weak; I want management that can earn high returns on shareholders' equity. ROCE is 16.39%, so operating capital earns a decent return, but very little of it flows through to the equity holder. The balance sheet is the one comfort: debt-to-equity is only 0.23, so the company is not leveraged to its eyeballs. Promoter holding of 59.39% does align shareholders with management. This looks like a cyclical business in the down part of its cycle. I would not call it a turnaround without evidence that demand and margins are stabilising. At ₹28.72, the market has already marked it down from ₹53.74, but a weak business can always get cheaper. I would wait for a lower price, a healthier F-score, and proof that quarterly earnings have stopped falling.

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