Roto Pumps (ROTO)

FairStock Score: 35/100 — MIXED

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

Key Financials

Strengths

• Low leverage: Debt/Equity only 0.13, with ROCE of 19.03%, indicating solid financial health and capital efficiency.
• Promoter holding of 66.80% aligns management's interests with minority shareholders.
• Piotroski F-Score of 7/9 points to good profitability, asset efficiency, and stable financials.
• Reported profit growth of 71.21% gives a PEG of 0.63, which is attractive if the growth is sustainable.

Concerns

• Sales growth is essentially flat at 0.01%, so the 71.21% profit jump may be margin-driven or non-recurring.
• Valuation is demanding: P/E of 33.66 and P/B of 5.50 leave little margin of safety relative to ROE of 13.31%.
• FairStock Score of 39/100 and price near the bottom of the 52-week range suggest market skepticism.
• Dividend yield of 1.40% is modest and does little to buffer downside at this valuation.

AI Analysis

Roto Pumps is not a business I would describe as a wonderful compounder. At ₹59.27, the market is asking ₹1,074 crore for a company whose sales grew just 0.01%. A 71.21% jump in profit on flat revenue is impressive on the surface, but as Graham would say, isolate the cause. That kind of divergence usually comes from margins or one-off gains, not from customers buying more pumps. In the latest quarter, ₹73 crore of sales produced ₹7 crore of net profit—decent, but not a compounding machine. I want durable earnings, not a single-year spike. Financially, the company is sound: debt/equity is only 0.13, ROCE is 19.03%, and the Piotroski score of 7/9 gives me comfort about asset quality and operating discipline. Promoter holding of 66.80% means owners are aligned with shareholders. The problem is price. At 33.66 times earnings and 5.50 times book, I am paying up for a business earning 13.31% on equity. Book value is just ₹10.78, and the dividend yield of 1.40% is not enough to compensate for that valuation risk. The PEG of 0.63 looks attractive only if the 71% profit growth is sustainable. With revenue flat, that is a brave assumption. The stock trades near the lower part of its ₹47.50 to ₹90.60 range, and FairStock score of 39/100 suggests the market has doubts. Maybe the cycle is turning in its favor, but I cannot rely on hope. This may be a decent cyclical business, but it is not a margin-of-safety buy. I would keep it on the watchlist and wait for proof that revenue growth has returned or a significantly lower price.

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