Pudumjee Paper (PDMJEPAPER)

FairStock Score: 45/100 — MIXED

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

Key Financials

Strengths

• Negligible debt with D/E of only 0.02, giving strong financial resilience
• High return ratios: ROE of 16.98% and ROCE of 22.35%
• Cheap on earnings and book value: P/E 8.51, P/B 1.50 versus book value ₹58.07
• High promoter holding of 71.55% aligns management with minority shareholders
• Piotroski F-Score of 7/9 suggests sound underlying fundamentals

Concerns

• Growth is subdued at ~5% for both sales and profit; PEG of 1.55 limits the margin of safety
• Paper is a cyclical, commodity-like industry with potential earnings volatility
• Dividend yield of only 0.72% provides minimal income support
• Current price is well below the 52-week high of ₹148.39, reflecting weak demand or sentiment

AI Analysis

Pudumjee Paper is the kind of business I would sit with quietly. At ₹87.25, the market caps the entire company at ₹789 Cr. That gives me a P/E of 8.51 and a P/B of 1.50 against book value of ₹58.07. For a business earning 16.98% on equity and 22.35% on capital employed, the entry price is not demanding. And unlike most paper companies, this one is almost debt-free: debt-to-equity is only 0.02. That means the earnings are not levered; they are real and sustainable. The Piotroski F-score of 7/9 supports the quality of the reported numbers. Growth is modest—sales and profit grew just about 5%—so this is not a rapid compounder. My Graham instinct asks: am I getting a margin of safety? Yes, in the balance sheet and earnings power, but the PEG of 1.55 reminds me that paying 8.5 times earnings for 5.77% profit growth is no bargain. The dividend yield of 0.72% is thin, so the return must come from earnings growth and prudent re-rating. The 52-week range of ₹65 to ₹148.39 tells me this is a cyclical paper stock, and current price sits closer to the bottom than the top. Promoter holding of 71.55% is reassuring; promoters' interests are aligned with mine. The latest quarter—sales of ₹204 Cr and net profit of ₹21 Cr—annualises roughly to the kind of earnings power that supports the low P/E. I would not expect fireworks. I would expect a steady, conservatively financed business run for owners. I will not overpay for it, and I will watch whether incremental capital continues to earn 20%+ returns. If the industry cycle turns, the low debt gives me patience to hold through.

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