Precot (PRECOT)
CyclicalFairStock Score: 17/100 — RISKY
Score breakdown: P/E: 2/3 · ROCE: 1/2 · Growth: 0/2 · Dividend: 0/1
Key Financials
| Current Price | ₹717.15 |
| Market Cap | ₹860.58 Cr |
| P/E Ratio | 23.98 |
| ROCE | 12.6% |
| ROE | 7.72% |
| Dividend Yield | 0.56% |
| Profit Growth | -48.02% |
| Debt/Equity | 0.72 |
| Sales Growth | -1.89% |
| Promoter Holding | 61.51% |
| 52-Week Range | ₹300.05 — ₹899 |
| Sector | Textiles & Apparels |
| Book Value | ₹400.61 |
Strengths
- P/E at 13.74 and P/B at 1.43 are not demanding; book value ₹385.84 provides a crude floor.
- Promoter holding of 61.51% aligns management with minority shareholders.
- ROCE of 12.60% shows capital is earning a reasonable return despite sector headwinds.
- Debt/equity of 0.81 is moderate, not excessive.
- Company remains profitable; latest quarter sales ₹208 Cr and net profit ₹6 Cr are positive.
Concerns
- Profit growth of -48.02% and a thin net margin of roughly 2.9% signal weak earnings power.
- Piotroski F-Score of 3/9 and FairStock Score of 17/100 indicate poor fundamental health.
- Sales growth of -1.89% shows no top-line momentum.
- ROE is N/A, suggesting unstable or inadequate shareholder returns.
AI Analysis
Whenever I see a textile company, my caution lights begin to blink. Textiles are a commodity business, capital-hungry and exposed to global pricing. Precot's numbers reinforce that wariness. Sales grew at -1.89%, and profits collapsed by 48.02%. The latest quarter shows just ₹6 crore net profit on ₹208 crore sales – a thin 2.9% net margin. The Piotroski F-Score of 3/9 and FairStock Score of 17/100 tell me the financial health has deteriorated. At ₹550, the stock trades at 13.74 times earnings and 1.43 times book value. A P/E under 14 might look cheap, but I'll pay a low price only for a good business, not for a deteriorating one. ROCE of 12.60% is respectable, and debt/equity of 0.81 is manageable, so the company isn't broken. Book value of ₹385.84 gives some downside reference. Promoter holding of 61.51% is a positive – those running the show have significant skin in the game. But with ROE not even reported, profit growth down sharply, and a 52-week range that saw the stock fall from ₹899 to ₹300 before recovering to ₹550, this feels like a cyclical business at a difficult point in its cycle. The dividend yield is negligible at 0.66%. This is not the kind of franchise I want to own for decades; it's a cyclical that may offer opportunity if textile demand revives and margins recover. I would need a larger margin of safety, perhaps closer to book value, and evidence that quarterly earnings are stabilising before considering it.
Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer