Rajesh Exports (RAJESHEXPO)

FairStock Score: 36/100 — MIXED

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

Key Financials

Strengths

• At ₹128.69, stock trades below book value of ₹173.91 (P/B 0.74)
• Very low leverage: Debt/Equity 0.05
• Promoter holding at 54.55% aligns majority interest with minority shareholders
• Recent operating momentum: sales +143.30%, profit +101.35%, and Piotroski F-score 7/9
• Huge operational scale with quarterly sales of ₹2.35 lakh Cr

Concerns

• Ultra-thin profitability: only ₹71 Cr net profit on ₹2.35 lakh Cr quarterly sales (~0.03% margin)
• Weak returns on capital: ROE 1.10%, ROCE 1.47% suggest assets are not generating adequate value
• High P/E of 25.28 with zero dividend; investor depends entirely on price re-rating
• Growth may be cyclical/price-driven, not structural; 52-week range ₹73.20-₹237.88 shows volatility

AI Analysis

I start with the first question Graham asks: what does this business earn, and am I paying too much for those earnings? Rajesh Exports sells enormous quantities of gold and jewellery—quarterly sales were ₹2.35 lakh crore—but it kept only ₹71 crore as profit. That is a net margin of barely 0.03%. In Buffett's language, a business that grows on turnover but not on per-rupee profit has no moat. It is a giant, low-margin commodity intermediary exposed to gold prices and the jewellery cycle. The trailing P/E of 25.28 confirms that the market is paying ₹25 for every ₹1 of profit, and since there is no dividend, I earn nothing while I wait. The balance sheet is conservative: debt/equity is only 0.05 and promoter holding is 54.55%. The F-score of 7 out of 9 suggests the financial position strengthened recently. Book value is ₹173.91, while the share price is ₹128.69, so the stock trades below book at 0.74 times. That gives some asset-backing. But here is the trap: book value only protects you if the assets can earn a fair return. ROE is just 1.10% and ROCE 1.47%, so this pile of assets is not productive. Sales growth of 143% and profit growth of 101% look exciting, and the PEG of 0.21 appears cheap. I would ignore that. A commodity business can show huge revenue jumps when gold rises, and the profit growth is off a very small base. The 52-week range of ₹73.20 to ₹237.88 tells me how volatile this can be. This is a cyclical, low-return business trading below book. It is not a franchise I would buy without a wider margin of safety, a management plan to improve returns, or evidence that margins are structurally better.

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