Paragon Fine (PARAGON)

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

Key Financials

Strengths

• Reasonable P/E of 14.72 with a PEG of 0.90, suggesting value if earnings growth persists
• Profit growth of 16.37% despite revenue decline indicates margin improvement
• Piotroski F-Score of 6/9 points to acceptable fundamental health
• High promoter holding of 74.87% aligns management interests with shareholders

Concerns

• Sales declined 20.91%, so current profit growth is not demand-driven
• ROCE of only 9.17% suggests a mediocre, low-return business without a strong moat
• Zero dividend yield offers no income while waiting for a turnaround
• Critical balance-sheet data like book value and debt/equity are unavailable, limiting margin-of-safety analysis

AI Analysis

At ₹41, Paragon Fine wears a cheap label: ₹91 crore market cap and a 14.72 price-to-earnings ratio. But cheap can be a trap. In the latest quarter, sales were ₹41 crore and net profit only ₹2 crore—a thin 4.9% margin. The topline has fallen 20.91%, yet reported profit has grown 16.37%. That contradictory picture tells me the improvement is coming from margins, not from customers. In a cyclical dyes and pigments business, margin-led earnings can vanish when input costs or competition shift. Graham would first ask about the balance sheet. I cannot answer: no book value, no debt-to-equity, no ROE. That is a serious information gap. A 9.17% ROCE is mediocre; this is not a high-return franchise with a durable moat. The zero dividend means I am not being paid to wait. The Piotroski score of 6/9 is acceptable but not outstanding. Promoter holding at 74.87% does provide comfort on alignment, though it also makes the floating stock small and liquidity thin. The PEG ratio of 0.90 looks attractive only if 16.37% profit growth is durable. I doubt durability when sales are shrinking. One good profit quarter does not make a turnaround. I would need to see at least two or three quarters where revenue stabilises or grows while margins hold. At 14.7 times earnings, the price is fair, not a bargain; buying without full balance-sheet data violates my margin-of-safety principle. This is a watchlist candidate, not a conviction buy. I will wait until the company proves the earnings recovery is real and gives me the missing numbers.

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