Shilchar Tech. (SHILCTECH)
Fast GrowerFairStock Score: 27/100 — RISKY
Score breakdown: P/E: 1/3 · ROCE: 2/2 · Growth: 2/2 · Dividend: 0/1
Key Financials
| Current Price | ₹3,904.2 |
| Market Cap | ₹4,466.48 Cr |
| P/E Ratio | 32.47 |
| ROCE | 71.3% |
| ROE | 72.09% |
| Dividend Yield | 0.32% |
| Profit Growth | -49.7% |
| Debt/Equity | — |
| Sales Growth | -15.2% |
| Promoter Holding | 62.12% |
| 52-Week Range | ₹2,852.5 — ₹5,397.85 |
| Sector | Electrical Equipment |
| Book Value | ₹429.1 |
Strengths
- Exceptional capital efficiency: ROE of 72.09% and ROCE of 71.30% indicate a strong competitive position.
- High profitability: latest quarter net profit of ₹42 Cr on sales of ₹170 Cr implies roughly a 25% net margin.
- Profit growth of 21.77% outpacing sales growth of 10.75% shows improving operating leverage.
- Piotroski F-Score of 7/9 and no disclosed debt suggest sound financial health.
- Promoter holding of 62.12% aligns management interests with minority shareholders.
Concerns
- Valuation is rich: P/E of 24.93 and P/B of 23.40 leave little margin of safety.
- Sales growth of only 10.75% may not sustain 21.77% profit growth indefinitely.
- Dividend yield of 0.31% offers negligible income to shareholders.
- FairStock Score of 38/100 suggests mixed signals despite strong fundamentals.
AI Analysis
Whenever I see a business earn 72.09% on equity and 71.30% on capital employed, I stop and listen. Shilchi Tech is not an ordinary electrical equipment maker; those numbers suggest a niche franchise with pricing power and a real moat. My mentor Ben Graham would nod, but then look at 23.40 times book and 24.93 times earnings and warn me about paying for excellence as if it will never be challenged. The latest quarter shows ₹170 Cr of sales and ₹42 Cr of net profit, nearly a 25% margin, which is remarkable for this industry. The balance sheet seems healthy — the debt/equity is not given, but the Piotroski F-score of 7 out of 9 gives some comfort. Promoters own 62.12%, so their money stays with mine, which I like. However, I am bothered by the growth curve: sales rose 10.75% while profit rose 21.77%. That is operating leverage, but it can only take you so far; eventually volume must lead. At ₹5,307.80, near the top of the 52-week range, the market has already applauded. The dividend yield of 0.31% is almost nothing, so I receive no cash while waiting. A PEG of 1.53 says the price is somewhat above what growth justifies. This is a wonderful business, and I would be happy to own it — but I want a better price, or evidence that sales growth is picking up speed. In Graham's frame, the margin of safety is thin. For now, it remains a high-quality business I admire but cannot buy with conviction at this price.
Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer