Prakash Industri (PRAKASH)

FairStock Score: 30/100 — RISKY

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

Key Financials

Strengths

• Trades at ₹140.38 against book value of ₹177.69, giving a P/B of 0.79 and a clear margin of safety.
• Very low debt-to-equity of 0.10, making the balance sheet resilient through steel cycles.
• ROE of 10.43% and ROCE of 11.24% are respectable for a commodity business with minimal leverage.
• Latest quarter delivered ₹87 Cr net profit on ₹799 Cr sales, showing near-term earnings stability.
• P/E of 7.10 offers an inexpensive entry if the current earnings power is sustainable.

Concerns

• Sales declined 13.76%, signaling weak demand or adverse steel pricing.
• Iron and steel is a commoditized, cyclical industry with limited pricing power and no durable moat.
• Profit grew 3.71% despite lower sales, which may not be repeatable if cost tailwinds fade.
• FairStock Score of 35/100 and PEG of 1.91 suggest the market sees mixed quality and limited growth visibility.

AI Analysis

At 140 rupees, Prakash Industri sells at a meaningful discount to book value of 177.69 rupees. That catches any Graham investor's attention. But price isn't the whole story. This is an iron and steel business—a cyclical, capital-intensive commodity. No enduring consumer franchise, no pricing power. During good times it earns decent returns: ROE is 10.43%, ROCE is 11.24%, and debt-to-equity is just 0.10. That low leverage pleases me. The latest quarter net profit of 87 crore on sales of 799 crore suggests operations can generate cash even when steel conditions are not strong. However, sales fell 13.76%. That tells me we are likely in a down part of the cycle. Profit growth of 3.71% on declining revenue is unusual; I do not expect that to persist if prices stay weak. The P/E of 7.10 looks cheap, but cheap commodity companies can become cheaper. The P/B of 0.79 provides a cushion; book value is real if management is honest and plants are maintained. The Piotroski score of 6/9 is okay, not great. I would not call this a stalwart. It is a cyclical trading at an attractive valuation with a sound balance sheet. In true Graham style, I want margin of safety—here we have low debt, book value cover, and a modest dividend yield of 1.14%. But I must watch steel prices and whether the sales decline resumes. If the cycle turns up, low leverage and controlled costs could let profits surprise. If the downcycle deepens, book value might erode. I am interested—but I would size it cautiously and monitor quarterly trends.

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