Sahyadri Industr (SAHYADRI)

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

Key Financials

Strengths

• Book value ₹342.43 vs price ₹244.35 gives a clear discount to book (P/B 0.71)
• Conservative capital structure: D/E 0.09 and Piotroski F-Score 7/9 indicate low financial distress
• Promoter holding 71.12% aligns management with minority shareholders
• P/E of 11.85 is reasonable if current earnings are maintained
• Sales growth of 10.70% shows moderate business expansion

Concerns

• ROE of 6.09% and ROCE of 7.12% suggest poor returns on capital and limited moat
• Latest quarter net margin is thin: ₹5 Cr profit on ₹145 Cr sales, roughly 3.4%
• Profit growth of 606.58% is likely from a low base or one-off factors and may reverse
• Dividend yield of only 0.40% gives minority shareholders little income while waiting

AI Analysis

At ₹244.35, Sahyadri trades at only 0.71 times book value while book value stands at ₹342 per share. That is the kind of margin of safety Graham taught. But cheapness alone is not enough. The business earns a weak 6.09% ROE and 7.12% ROCE, below what I'd expect from a quality compounder. In construction materials, there is little pricing power or moat; competition and cyclical demand can erase profits quickly. Latest quarter net profit of ₹5 Cr on sales of ₹145 Cr is a thin 3.4% margin. The 606% profit growth looks spectacular, but with such a low base and cyclical business, I'd treat it as noise, not trend. The balance sheet is sound: D/E 0.09 and Piotroski F-Score 7/9 show financial discipline and some improving fundamentals. Promoters own 71%, so interests are aligned. However, dividend yield is just 0.40%; shareholders are not paid much while waiting. Sales grew 10.70%, reasonable but not exciting. P/E of 11.85 is modest, yet low returns on capital mean the discount to book could persist or widen if earnings stagnate. This is not a wonderful business at a fair price; it is a mediocre business at a cheap price. I would not buy solely for the PEG of 0.04, because that metric is meaningless when one year's profit jump is unsustainable. If I owned it, I would watch whether margins can improve, whether sales growth continues, and whether management deploys the balance sheet wisely. In Buffett's terms, a cigar butt with one puff left—maybe worth a puff, but not a permanent holding.

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