Sadbhav Engg. (SADBHAV)

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

Key Financials

Strengths

• Deep discount to stated book value: P/B of 0.18 against book value of ₹57.44 per share.
• ROCE of 9.98% suggests the operating capital base can generate some return before interest and charges.
• Piotroski F-Score of 6/9 indicates moderately healthy financials for a distressed-looking name.
• Latest quarter sales of ₹230 Cr dwarf the ₹184 Cr market cap, showing revenue scale not reflected in valuation.

Concerns

• Latest quarterly net loss of ₹86 Cr and negative ROE of -12.08% are destroying shareholder equity.
• P/E is meaningless at 0.00 because earnings are negative; 159.46% profit growth is from a negative base.
• Sales growth is negative at -4.23% and dividend yield is zero, so there is no income support.
• Debt/Equity is not available, but the wide gap between ROCE of 9.98% and ROE of -12.08% points to heavy interest or finance costs.

AI Analysis

At ₹10.59, Sadbhav Engineering is being valued at just ₹184 Cr, while book value stands at ₹57.44 per share — a P/B of 0.18. That looks like a bargain until you remember that a P/E of zero usually means earnings are not there. Last quarter sales were ₹230 Cr but net loss was ₹86 Cr. Return on equity is -12.08%; book value is being destroyed. The reported profit growth of 159.46% is meaningless because it is coming from a negative base. A Graham investor would say: price is what you pay, value is what you get. Here the value depends on whether the asset base is real and can earn. ROCE of 9.98% is not bad as a starting point, but after interest costs and other charges, shareholders get nothing. Civil construction is a highly competitive, low-moat business; Sadbhav has no pricing power and negative sales growth of -4.23%. The Piotroski score of 6/9 gives a little comfort that the company is not falling apart, and the low market cap relative to quarterly sales suggests a franchise. But a loss-making franchise is not a compounding machine. I would not be seduced by 0.18 times book alone. Book value can shrink if losses continue. The margin of safety is only real if management stabilises operations and generates cash. This is an asset play, not a quality business, and it needs watching.

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