Raghav Product. (RPEL)

FairStock Score: 32/100 — RISKY

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

Key Financials

Strengths

• Near-zero debt: Debt/Equity of 0.03, giving a very strong balance sheet.
• High profitability: ROCE of 25.80% and ROE of 16.55% with latest quarter net margin around 22%.
• Strong recent growth: Sales up 17.17% and profit up 43.93%, with a healthy Piotroski F-Score of 7/9.
• Promoter holding of 62.91% aligns management interests with minority shareholders.

Concerns

• Very expensive valuation: P/E of 65.17, P/B of 19.61, and PEG of 2.13 leave no margin of safety.
• Small absolute scale: Quarterly sales of ₹64 Cr and annualised profit of roughly ₹56 Cr against a ₹3,243 Cr market cap.
• Negligible dividend yield of 0.14%, so shareholders are not compensated while waiting.
• FairStock Score of 32/100 and the sharp fall from ₹1,473 to ₹712 highlight high risk and possible cyclical pressure.

AI Analysis

Let me begin with the numbers I can trust. Raghav Product earns a strong 25.8% return on capital and 16.55% return on equity, with virtually no debt—debt to equity is only 0.03. The Piotroski score of 7/9 tells me the recent profit improvement isn’t just accounting cosmetics. Sales grew 17.17% and profit grew 43.93%, and the latest quarter shows ₹14 crore net profit on ₹64 crore sales, a roughly 22% margin. That suggests a quality niche business in electrodes and refractories, and promoter holding of 62.91% is reassuring. But Graham taught me that price is what I pay; value is what I get. At ₹712, the market capitalises this company at ₹3,243 crore. The trailing P/E is 65.17, and book value per share is only ₹36.31, so I am paying 19.61 times book. Even with high growth, the PEG ratio is 2.13—growth is already more than fully priced. There is no margin of safety. The stock has fallen from ₹1,473 to ₹712, but a fallen knife can still be expensive if earnings don’t catch up. Scale itself is a concern. One quarter of ₹64 crore sales is tiny; annualised profit is roughly ₹56 crore against a ₹3,243 crore market cap. The market is paying for years of flawless execution in an industrial cyclical industry. Dividend yield is only 0.14%, so I am not being paid to wait. FairStock’s risky score of 32/100 does not surprise me. I would classify this as a Cyclical, despite the recent fast growth. As a value investor, I cannot chase it here. I will put it on my watchlist and ask whether the growth can continue through the next downturn. Only a much lower price—or a much larger earnings base—would give me the margin of safety Graham demanded.

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