Pentagon Rubber (PENTAGON)
CyclicalScore breakdown: P/E: 1/3 · ROCE: 0/2 · Growth: 0/2 · Dividend: 0/1
Key Financials
| Current Price | ₹122.95 |
| Market Cap | ₹94.79 Cr |
| P/E Ratio | 20.81 |
| ROCE | 7.38% |
| ROE | —% |
| Dividend Yield | 0% |
| Profit Growth | -32.26% |
| Debt/Equity | — |
| Sales Growth | 10.04% |
| Promoter Holding | 70.04% |
| 52-Week Range | ₹49.15 — ₹122.95 |
| Sector | Industrial Products |
Strengths
- Promoter holding is high at 70.04%, indicating strong owner alignment.
- Sales grew 10.04%, showing some demand traction.
- Latest quarter is profitable with ₹1 Cr net profit on ₹27 Cr sales.
- Small market cap of ₹50 Cr could offer niche growth opportunities if execution improves.
Concerns
- Profit growth is sharply negative at -32.26%, yet P/E is 20.81.
- ROCE is low at 7.38%, suggesting weak capital efficiency.
- No dividend yield of 0.00% means shareholders rely entirely on price appreciation.
- Piotroski F-Score of 4/9 points to weak financial health, and key balance sheet data is unavailable.
AI Analysis
At first glance, this is a small, simple rubber business. But my test is not whether a company is easy to understand; it is whether the economics are attractive. Pentagon Rubber has a market cap of ₹50 crore and sells at ₹69.85, or 20.81 times earnings. That is a demanding price for a company whose profit fell 32.26% last year. When sales grow 10.04% but profits shrink by a third, I suspect margin compression or rising costs. The latest quarter shows net profit of only ₹1 crore on sales of ₹27 crore — a thin margin. Return on capital employed is 7.38%, far below what a quality business should earn. There is no dividend, so the investor's entire return depends on the share price, which has already ranged from ₹49.15 to ₹99.50 in a year. The Piotroski F-score of 4 out of 9 is another warning; it suggests financial health is not robust. Promoter holding of 70.04% is good for alignment, but it does not compensate for weak returns and a high multiple. With a PEG ratio of 2.07 and negative profit growth, I see no margin of safety. I would prefer a business with stable margins, high returns on capital, and a reasonable price. Pentagon Rubber fails that test today. In Graham's language, the figures do not support the price; I will wait on the sidelines until the business shows better profitability or the price falls enough to give me protection.
Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer