N R Agarwal Inds (NRAIL)

FairStock Score: 36/100 — MIXED

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

Key Financials

Strengths

• Price-to-book of 1.05 offers asset-backed downside support relative to book value of ₹457.86
• Promoter holding of 74.11% aligns management interests with minority shareholders
• Sales growth of 34.77% shows strong revenue momentum
• Piotroski F-Score of 7/9 indicates decent financial fundamentals
• Debt-to-equity of 0.93 is manageable, not excessive

Concerns

• P/E of 29.49 is high for an ROE of only 5.50%, implying overvaluation for low returns
• Latest quarter net margin is just ₹14 Cr on ₹563 Cr sales (~2.5%), showing severe margin pressure
• Profit growth of 17.99% lags sales growth of 34.77%, indicating eroding profitability
• Dividend yield of only 0.43% offers negligible income support

AI Analysis

When I look at N R Agarwal, I'm reminded of Ben Graham's advice to weigh the facts. The stock trades at ₹479.60, barely above its book value of ₹457.86 – a P/B of 1.05. That seems comforting, especially with promoters holding 74.11%. But the earnings tell a different story. The trailing P/E is 29.49, and the return on equity is just 5.50%. For every ₹100 of equity, I earn only ₹5.50; I could get better from an index fund. The latest quarter shows sales of ₹563 Cr and net profit of ₹14 Cr – a net margin of less than 2.5%. That is a razor-thin cushion. Sales grew 34.77%, but profits grew only 17.99%, so the margin squeeze is visible. Debt-to-equity at 0.93 is not outrageous, but I dislike leverage in a cyclical business like paper. The Piotroski F-score of 7/9 suggests some fundamental improvement, so it is not a melting ice cube. But with ROCE of 5.62%, the company is barely covering its cost of capital. I see no economic moat in paper and pulp; it is a commodity business. The dividend yield is only 0.43%, so I won't get paid to wait. Some might call this an asset play because of book-value support, but book value can erode in a downturn. At a P/E of 29.49, I am paying a premium for low current returns – essentially betting on a cyclical recovery. That is a speculative wager, not an investment. I need a far larger margin of safety before I put my capital to work here.

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