Schneider Elect. (SCHNEIDER)

FairStock Score: 37/100 — MIXED

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

Key Financials

Strengths

• 75% promoter holding ensures strong alignment with minority shareholders
• ROE of 51.37% and ROCE of 40.90% indicate exceptional capital efficiency and a defensible business position
• Piotroski F-score of 8/9 and Altman Z-score of 9.17 point to sound financial health and low bankruptcy risk
• Positive free cash flow of ₹242 Cr with latest quarterly net profit of ₹97 Cr on sales of ₹1,029 Cr
• Sales growth of 14.53% and profit growth of 13.22% show continued demand in heavy electrical equipment

Concerns

• Valuation is extreme: P/E of 82.83, P/B of 56.46 and EV/EBITDA of 127.93, far above Graham Number of ₹67.86 and DCF value of ₹300.85
• PEG ratio of 36.17 suggests current growth does not justify the earnings multiple
• Debt/equity of 1.27 with zero dividend yield leaves no margin of safety for shareholders
• FairStock Score of 40/100 and negative margin of safety signal significant downside risk

AI Analysis

At ₹1,127, I cannot call Schneider Elect an investment of safety. The arithmetic is plain: Graham Number is ₹67.86 and DCF intrinsic value ₹300.85, while the market asks ₹1,127. That is a margin of safety of negative 1,235.85%, so Mr. Market is paying for perfection. The business itself has admirable traits: 75% promoter holding aligns ownership with minority shareholders; return on equity is 51.37% and ROCE is 40.90%, showing a franchise with strong capital allocation. A Piotroski score of 8/9 and Altman Z-score of 9.17 suggest financial statements are solid, and free cash flow of ₹242 Cr is positive. Yet I cannot ignore the price: a P/E of 82.83, P/B of 56.46 and EV/EBITDA of 127.93 leave no room for error. Sales grew 14.53% and profit 13.22%, but a PEG of 36.17 tells me the growth rate is nowhere near enough to justify the multiple. Debt/equity of 1.27 is uncomfortable for a capital-goods firm, and the zero dividend means the only return is the hope of appreciation. In Graham's words, price is what you pay, value is what you get. At ₹1,127, I would get very little value. I would wait for a much lower price or for earnings to grow into this valuation before this becomes a candidate. For now, it is a great company, but a poor investment.

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