Sheetal Cool (SCPL)

FairStock Score: 51/100 — MIXED

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

Key Financials

Strengths

• Sales grew 25.23% and profit grew 87.38%, with a PEG of 0.37 indicating growth is not fully priced in
• Piotroski F-Score of 7/9 suggests solid financial health and accounting quality
• Promoter holding of 65.59% aligns promoter interests with minority shareholders
• ROCE of 15.66% and ROE of 12.63% are decent, while debt/equity of 0.63 is manageable

Concerns

• Dairy is a commoditised business with no clear moat or pricing power visible in the data
• Net margin is thin: latest quarterly profit of ₹4 Cr on sales of ₹64 Cr is only about 6.25%
• Stock has fallen sharply from ₹700 to ₹318, indicating severe de-rating and possible market skepticism
• Zero dividend yield means investors receive no income while waiting for growth

AI Analysis

Let me look at Sheetal Cool the way I would any business. At ₹318, I am being asked to pay 20.91 times earnings and 2.76 times book value. The company earns 12.63% on equity and 15.66% on capital employed. Those are respectable numbers, but they are not spectacular. Graham would remind me that price is what I pay, value is what I get, and a 20.9 P/E leaves little room for error. The growth story is compelling on paper: sales grew 25.23% and profits grew 87.38%, so the PEG ratio is just 0.37. If that profit growth continues, the stock may be cheaper than it looks. But dairy is a commodity business. I see no wide moat here, no pricing power that protects margins. The latest quarter makes this clear: sales of ₹64 Cr produced only ₹4 Cr of net profit, a thin margin of about 6%. That is a fragile business model. The balance sheet is manageable, with debt-to-equity of 0.63, and a Piotroski F-Score of 7/9 gives me some comfort about financial health. Promoter holding of 65.59% is good, but there is zero dividend yield, so I am entirely dependent on management reinvesting profits wisely. I also notice the stock has fallen from a 52-week high of ₹700 to ₹318. The market has already cut this story down sharply. A price-to-book of 2.76 is not cheap if growth slows. I would call this a fast grower, but a fragile one. It is not the kind of business I can hold forever. I would only be interested if growth continues and the price gives me a margin of safety. Today, I am not fully convinced.

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