Salona Cotspin (SALONA)

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

Key Financials

Strengths

• Promoter holding of 68.42% ensures owner-operator alignment and long-term commitment.
• Price-to-book of 1.16 and book value of ₹232.23 mean the market price is only modestly above stated net assets.
• Quarterly sales of ₹155 Cr show the company still has a meaningful operating base despite its troubles.
• Reported ROE of 25.43% indicates the equity base has historically generated high returns, though leverage is a major caveat.

Concerns

• P/E of 1000 and latest quarter net profit of ₹0 Cr mean current earning power is almost nil.
• Debt/equity of 2.78 combined with ROCE of 7.41% shows high leverage and low return on capital.
• Profit growth of -79.11% and Piotroski F-score of 3/9 point to deteriorating fundamentals.
• Dividend yield of 0.38% offers negligible income to shareholders.

AI Analysis

At ₹270, Salona Cotspin carries a market cap of just ₹139 Cr. The first thing I see is a P/E of 1000 and a latest quarter where net profit is ₹0 Cr on ₹155 Cr of sales. That tells me earning power has collapsed; profit growth is down 79.11%. A P/B of 1.16 and book value of ₹232.23 look cheap, but Graham would ask whether the book value is real after liabilities. With debt/equity at 2.78, the balance sheet is heavily leveraged. ROCE of 7.41% is not an impressive return on the capital employed, while the reported 25.43% ROE is flattered by leverage rather than by business quality. This is a commodity textile business, and I see no durable moat, no pricing power, and no reliable earnings. Sales growth is slightly negative at -1.77%, and the Piotroski F-score of 3/9 reinforces my concern about deteriorating financial health. Promoter holding of 68.42% is a positive, as owners have skin in the game, but good intentions cannot repay debt or create lasting competitive advantage. Dividend yield of 0.38% is negligible. At ₹270, the market is not asking a large premium over book value, yet with leverage and zero quarterly profits, any asset-based margin of safety is thin. This is not a business I would call a growing franchise; it is a potential turnaround, but only for someone willing to accept high risk. I would wait for proof of sustainable profits, lower debt, and a ROCE that covers the cost of capital before acting.

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