Remsons Ind (REMSONSIND)

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

Key Financials

Strengths

• Sales growth of 20% and profit growth of 27.22% show strong momentum
• PEG ratio of 0.91 suggests valuation is reasonable relative to growth
• Piotroski F-score of 7/9 indicates solid financial health
• Promoter holding of 66.24% aligns management with minority shareholders
• ROCE of 14.38% is decent and above the company's cost of capital

Concerns

• ROE of 9.08% is mediocre; P/B of 3.31 is rich for such returns
• Debt/equity of 0.72 is not negligible for an auto component manufacturer
• Dividend yield of 0.27% is too low for income-focused investors
• Latest quarter net margin is thin at around ₹6 Cr profit on ₹123 Cr sales, and the auto sector is cyclical

AI Analysis

Let me first apply the Graham test. At ₹102.54, the stock trades at 21.58 times earnings and 3.31 times book value. That P/B is not cheap, especially when book value is only ₹30.98 and the company generates a modest 9.08% return on equity. As a value investor, I look for ROE of at least 15%; Remsons falls short. However, the growth record catches my eye: sales up 20% and profits up 27.22%. The PEG ratio of 0.91 suggests that, if this growth persists, the valuation is not excessive. The business earns a ROCE of 14.38%, which is respectable, and debt-to-equity of 0.72 is manageable though not conservative. The Piotroski F-score of 7/9 indicates decent financial health, with no red flags in profitability, leverage, or operating efficiency. The promoter holding of 66.24% aligns management with shareholders, an important factor in a small-cap auto component player. Yet I must be honest: the latest quarter's net profit of ₹6 Cr on sales of ₹123 Cr gives a thin margin, and the dividend yield of 0.27% offers little income protection. The 52-week range of ₹75.23 to ₹152.45 tells me this is a volatile, cyclical stock. I would not call it a classic Graham bargain; rather, it is a fast-growing small-cap that deserves a place on a watchlist. If the company continues to convert its 20% sales growth into 27% profit growth and maintains its F-score, the market's current premium may be justified. But I would only buy with the expectation of holding for years, and I would demand sustained returns on equity above 12% before deploying capital. At today's price, the margin of safety is thin.

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