Rex Pipes&Cables (REXPIPES)

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

Key Financials

Strengths

• ROCE of 16.14% suggests acceptable returns on capital employed.
• Promoter holding of 57% indicates reasonable ownership alignment.
• Piotroski F-Score of 6/9 points to moderate financial health.
• Profit growth of 21.74% shows some cost or margin control despite falling sales.

Concerns

• Sales growth is -22.63%, a sharp decline in topline.
• P/E of 34.77 and PEG of 1.60 leave little margin of safety for a small-cap.
• Latest quarter net profit of ₹2 Cr on sales of ₹61 Cr is only about a 3.3% margin.
• No dividend and missing book value/ROE data make valuation and return assessment difficult.

AI Analysis

Let me first admit what I don't know. Rex Pipes & Cables has no disclosed book value, no ROE, no debt-equity ratio. That alone puts me on guard; in Graham's world, you don't buy what you cannot measure. The company earns a return on capital employed of 16.14%, which is respectable, and promoter holding at 57% suggests skin in the game. The Piotroski score of 6 out of 9 also points to acceptable financial health, not enough to excite me, but not a distress signal. But the economics trouble me. Sales fell 22.63% while profit rose 21.74%. That is a divergence I would want explained. In cyclical industrial plastics, a profit jump on sharply lower revenue often means cost cuts, better mix, or one-time gains, not durable compounding. The latest quarter shows ₹61 crore sales and just ₹2 crore net profit—a thin 3.3% margin. I cannot call a business with that margin a franchise. Valuation is far from bargain: P/E 34.77, PEG 1.60, zero dividend. The stock is near its 52-week high of ₹208, so the market is optimistic. For a small-cap with declining topline, that price demands continued profit growth. Graham would prefer margin of safety; I see little at this price. Without book value or cash-flow data, I cannot estimate intrinsic value confidently. If the business is truly a cyclical, today's earnings may be the peak, not the base. I would need several quarters of evidence that sales stabilise while margins hold before I commit. Until then, Rex Pipes & Cables belongs on the watchlist, not in my portfolio.

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