Raj Oil Mills (ROML)

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

Key Financials

Strengths

• Sales growth of 17.51% and latest quarter revenue of ₹36 Cr show commercial traction.
• Piotroski F-Score of 7/9 suggests improving profitability, leverage, or operating efficiency.
• P/E of 11.97 and PEG of 0.91 are reasonable if current earnings are sustainable.
• Promoter holding of 75% provides strong ownership alignment.

Concerns

• Debt/Equity of 60.07 and book value of ₹0.33 indicate a highly leveraged, paper-thin equity base.
• ROE of -111.86% shows shareholder value has been severely eroded.
• P/B of 132.24 is effectively meaningless and highlights lack of tangible net worth.
• Zero dividend and a commodity edible-oil business mean no pricing power or buffer for shareholders.

AI Analysis

At ₹43.64, Raj Oil Mills is a small ₹65 Cr market cap player in edible oil, a business I would normally walk past. It is a commodity business with no real moat; you are a price taker on global oilseeds, and margins can be squeezed from both directions. The numbers make this a possible turnaround rather than a compounder. The balance sheet is clearly the concern: book value is just ₹0.33 per share, so the P/B of 132.24 is not a valuation; it is a warning that equity has been nearly destroyed. Stated debt/equity of 60.07 means leverage is extreme, and ROE is -111.86%. In Graham's terms, this is not a safe enterprise; minority shareholders can be hurt badly before a recovery matures. That said, the operating story shows signs of life. The latest quarter has sales of ₹36 Cr and net profit of ₹1 Cr. Sales are growing at 17.51%, profit at 8.93%, and a P/E of 11.97 with a PEG of 0.91 suggests the market is not pricing in dramatic growth. The Piotroski F-Score of 7/9 also points to improving financial fundamentals. Promoter holding at 75% aligns owners and management, which I respect. But a recovering commodity business is still a commodity business. ROCE of 13.71% is decent, but with zero dividend and huge debt, I would demand a wide margin of safety. I need to see debt reduced steadily and earnings generated from operations, not financial engineering. If the turnaround continues, this could be interesting; if the commodity cycle turns, the leverage could bite hard. I would keep it in the 'too hard' pile until the balance sheet is repaired.

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