Saurashtra Cem. (SAURASHCEM)

FairStock Score: 17/100 — RISKY

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

Key Financials

Strengths

• Promoter holding at 66.70% provides strong owner alignment.
• Stock trades at 0.75 times book value of ₹82.44, offering an asset cushion.
• Debt/Equity is N/A, suggesting no meaningful leverage on the balance sheet.
• Piotroski F-Score of 7/9 indicates reasonable financial discipline despite the weak quarter.
• Sales growth of 8.66% shows some resilience in a cyclical cement environment.

Concerns

• Latest quarter is loss-making: ₹410 Cr sales but ₹-10 Cr net profit.
• ROE of 3.19% and ROCE of 1.86% are far below acceptable return thresholds.
• Trailing P/E of 24.76 and PEG of 2.14 offer no earnings-based margin of safety.
• Zero dividend yield means minority shareholders receive no income while waiting.

AI Analysis

At ₹62.17, this is the kind of stock that makes me pause, not smile. Saurashtra Cem has a book value of ₹82.44, yet the market prices it at ₹62.17 — 0.75 times book. That looks like a Graham-style asset play on the surface. But a value investor cannot stop at the balance sheet. The business earns an ROE of only 3.19% and ROCE of 1.86%; those are numbers of a capital-intensive commodity producer, not a franchise with a durable moat. In the latest quarter, it lost ₹10 Cr on sales of ₹410 Cr. The trailing P/E of 24.76 and PEG of 2.14 are not comforting when current earnings are so weak and cyclical. Sales grew 8.66% and profit grew 14.45%, but from a low and volatile base; I would not extrapolate that. On the positive side, there is no debt shown in the D/E ratio, and promoters own 66.70%, so minority interests are reasonably aligned. The Piotroski score of 7/9 is respectable. But low ROE and a zero dividend yield mean shareholders are dependent on an eventual upcycle or asset realisation to earn a return. Cement is a local bulky product; moats come from limestone, logistics, and pricing discipline. The price has fallen from ₹125.35 to ₹62.17, but a falling knife is not a margin of safety. This is not a wonderful business at a fair price; it is a mediocre business at a discount. I would keep it on the watchlist, but I need proof of improved capital allocation and sustained profitability before committing. In Graham's words, price is what you pay, value is what you get — here, value depends entirely on whether these assets can earn more than their cost of capital.

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