Paradeep Phosph. (PARADEEP)

FairStock Score: 72/100 — STEADY

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

Key Financials

Strengths

• Strong ROE of 25.01% with a 5-year revenue CAGR of 21.76%
• Piotroski F-Score of 7/9 and positive free cash flow of ₹789 Cr
• Promoter holding of 57.70% is reassuring
• Reasonable P/E of 12.21 if earnings stabilise

Concerns

• Profit growth of 2.36% lags sales growth of 15.21%, signalling margin pressure
• P/B of 3.69 offers little margin of safety over book value of ₹37.15
• Debt/Equity of 0.87 is manageable but not conservative
• Dividend yield of 0.82% is thin for income investors

AI Analysis

Paradeep Phosphates is a business I would study with respect but not love. The 5-year revenue CAGR of 21.76% and ROE of 25.01% catch my eye, and a Piotroski F-Score of 7/9 suggests the balance sheet is honest. Free cash flow of ₹789 crore gives it room to breathe. Yet I must be careful. A P/B of 3.69 means I am paying ₹137 for ₹37 of book value. Graham would demand a margin of safety. The P/E of 12.21 is not demanding, but profit growth of just 2.36% against sales growth of 15.21% tells me margins are under pressure. This is the nature of fertilisers: a commodity-like input, vulnerable to raw-material prices, subsidy policy and monsoon vagaries. ROCE at 13.72% is acceptable but not exceptional; debt/equity of 0.87 is manageable but not pristine. Promoter holding of 57.70% is reassuring, and the dividend yield of 0.82% is modest. The share price has fallen from ₹232 to ₹137, perhaps reflecting lower margins. I would not call this a wonderful business; I would call it a cyclical with a decent track record. The FairStock score of 65/100 'STEADY' fits. At 12.21 times earnings and a PEG near 1.39, there is no obvious bargain in the classical sense. I would want evidence that recent cost pressures have peaked and that margins are stabilising. If the next few quarters show profit growth catching up with revenue growth, then this could become interesting. Until then, I would keep it on the watch list, not in the shopping cart.

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