Servotech Renew (SERVOTECH)

FairStock Score: 31/100 — RISKY

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

Key Financials

Strengths

• ROCE at 20.81% indicates efficient use of capital
• Debt/Equity of 0.56 is manageable
• Promoter holding of 58.61% aligns owner interests
• Piotroski F-Score of 7/9 shows reasonable financial health
• Profit growth of 54.74% demonstrates near-term earnings momentum

Concerns

• P/E of 52.72 and P/B of 8.72 leave no margin of safety
• Dividend yield of 0.07% means returns depend entirely on price appreciation
• Sales growth of only 11.21% versus profit growth of 54.74% may not be sustainable
• FairStock Score of 22/100 flags the stock as risky

AI Analysis

At ₹91.79, Servotech Renew carries a market cap of ₹1,706 Cr but earnings of only about ₹32 Cr, translating to a P/E of 52.72. That is not a Graham bargain. A P/B of 8.72 means I am paying nearly nine times book for a business whose book value is just ₹10.53 per share. The dividend yield of 0.07% tells me the shareholder return is almost entirely dependent on future price appreciation, which is hope, not investment. The business has some decent traits. ROCE is 20.81%, which suggests management is earning a good return on capital. Debt/equity at 0.56 is tolerable, and a Piotroski F-Score of 7/9 indicates the financial statements are not deteriorating. Promoter holding of 58.61% is positive, as their interests are tied to mine. But I need a moat, not just momentum. Profit growth of 54.74% looks impressive, but sales only grew 11.21%. That gap suggests margins or other income drove the bottom line, and such leverage can reverse quickly. If the core topline cannot sustain the expansion, a high P/E stock will be repriced. The FairStock Score of 22/100 calls it risky, and I agree. The 52-week range shows the market has already swung from ₹57.51 to ₹143 and back to ₹91.79. That kind of volatility is uncomfortable for an owner, not reassuring. At this price, the margin of safety is missing. Even the PEG of 1.60 suggests growth is already priced in. In Graham's words, price is what you pay, value is what you get. I do not see clear value here. I would wait for a lower price or evidence that sales growth catches up to profit growth before considering it.

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