Ram Ratna Wires (RAMRAT)

FairStock Score: 44/100 — MIXED

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

Key Financials

Strengths

• Promoter holding of 68.54% aligns management interests with minority shareholders
• Sales growth of 43.80% and profit growth of 106.33% show strong recent momentum
• ROE of 19.59% and ROCE of 20.17% indicate decent capital efficiency
• Piotroski F-Score of 7/9 suggests recent financial position is improving
• PEG of 0.45 appears reasonable if the high profit growth is sustainable

Concerns

• P/E of 33.76 and P/B of 8.93 leave little margin of safety at the current price
• Debt/Equity of 1.23 and a net margin of roughly 2.5% make the business vulnerable to cost pressures
• Dividend yield of 0.39% offers negligible income support for shareholders
• Profit growth of 106.33% may be cyclical or low-base, and sustainability is unproven

AI Analysis

Ram Ratna Wires is growing fast, but I must separate growth from value. At ₹387 with market cap ₹2,994 Cr, it sells at 33.76 times earnings and 8.93 times book. That is not a Graham bargain. The business earns ROE 19.59% and ROCE 20.17%—quite respectable. But debt-to-equity of 1.23 reminds me this is not a fortress balance sheet. Profit growth of 106% sounds wonderful, but the latest quarter tells me the truth: ₹1,278 Cr of sales produced only ₹32 Cr profit—a margin around 2.5%. Wires is a competitive, raw-material heavy business. The 43.8% sales growth is nice, but I want predictable earnings power, not cyclical surges. The Piotroski F-score of 7 out of 9 suggests recent financial health is okay. Promoter holding at 68.54% aligns interests. Yet dividend yield of 0.39% means shareholders are asked to wait patiently for returns. The stock traded between ₹268 and ₹520 in a year; current price is below the midpoint, but still not cheap on trailing earnings. PEG of 0.45 only makes sense if the 106% profit growth rate persists, and that is doubtful for a low-margin electrical wire maker. I would call this a fast grower, not a stalwart. It may be a good business at the right price, but at 33 times earnings with debt and thin margins, the margin of safety is thin. If growth slows, the multiple could compress sharply. I'd want to understand whether the growth is durable, how much is volume versus price of copper/aluminium, and how management plans to reduce leverage. For now, this is an observe-and-study case, not a 'circle of competence' buy at this price.

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