Ravindra Energy (RELTD)

FairStock Score: 13/100 — RISKY

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

Key Financials

Strengths

• Exceptional sales growth of 139.31% and profit growth of 571.56% show strong momentum
• Piotroski F-Score of 7/9 suggests decent short-term financial health
• Promoter holding at 64.77% aligns management and shareholder interests
• Latest quarter profitable: ₹127 Cr sales and ₹15 Cr net profit
• Low PEG ratio of 0.08 implies the market has not fully priced in current growth

Concerns

• Debt/Equity of 3.66 indicates heavy leverage and financial fragility
• ROCE of 9.53% is far below the reported ROE of 55.90%, showing returns are debt-driven
• P/B of 16.68 and book value of ₹8.60 provide no margin of safety
• Zero dividend yield means investors depend entirely on continued price appreciation

AI Analysis

Ravindra Energy looks like a fast grower, but my mother taught me to price the horse, not just admire its gallop. Sales are up 139% and profits up 571%, and the latest quarter shows ₹127 Cr of sales and ₹15 Cr of net profit. Those are eye-catching numbers. But look deeper. The business earns a return on capital of only 9.53%, while book value is a skinny ₹8.60 per share. The reported ROE of 55.9% is flattered by debt: Debt/Equity stands at 3.66. That is not a fortress balance sheet; it is a levered one. I am being asked to pay ₹143.48 per share, or about 16.68 times book, for a company whose equity cushion is thin and whose capital returns are mediocre once leverage is stripped away. The P/E of 27.71 means the market is capitalising on extraordinary growth, and the PEG ratio of 0.08 suggests the shares look cheap only if today's growth is sustainable. In my experience, 571% profit growth from a low base is more fragile than a steady compounding machine. There is also zero dividend yield, so the investor gets nothing while waiting except hope. The Piotroski score of 7 is encouraging, and promoter holding of 64.77% does align interests, but that does not overcome the debt load or the lack of margin of safety. Graham would ask: what am I getting for the price? Too little asset support, too much leverage, and a business whose return on capital is far below its apparent accounting return. This is a fast grower, not a durable wealth compounder. I would wait for stronger capital efficiency and a cleaner balance sheet before investing a rupee.

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