Shradha Realty (SHRADHA)

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

Key Financials

Strengths

• Sales growth of 25.51% and profit growth of 29.61% show a strong growth trajectory
• P/E of 14.61 and PEG of 0.53 indicate reasonable valuation relative to growth
• Piotroski F-Score of 7/9 suggests solid financial health
• Promoter holding at 74.97% aligns management interests with minority shareholders
• Dividend yield of 1.32% provides a modest cash return while waiting

Concerns

• Debt/Equity of 0.93 is significant leverage for a real estate developer
• ROCE of 9.54% is not high, and ROE is unavailable, raising questions about capital productivity
• Real estate is highly cyclical and competitive; one quarter of ₹28 Cr sales and ₹5 Cr profit is not enough evidence of durable demand
• The stock at ₹40.50 is well below its 52-week high of ₹65.02, indicating possible volatility or loss of momentum

AI Analysis

I start with a simple test: can I understand the business? Shradha Realty builds residential and commercial projects in India—understandable, but highly competitive and cyclical. At ₹40.50, market cap ₹306 Cr, the market is paying 14.61 times earnings and 1.28 times book value. That is not a bargain-basement Graham stock, but it isn't expensive either, especially with sales growing 25.51% and profit growing 29.61%. The PEG ratio of 0.53 suggests the growth is not yet fully reflected in the price. However, I must be cautious. ROCE is only 9.54%, which is modest, and ROE is not reported. A good business should generate returns on capital well above its cost; this one does not yet convince me of a wide moat. Real estate has no durable brand lock-in unless the builder executes flawlessly, and leverage of 0.93 D/E means debt is meaningful. A high promoter holding of 74.97% is positive—owner-operators with skin in the game—and a 1.32% dividend gives me a small return while waiting. The Piotroski score of 7 out of 9 signals healthy balance-sheet and operational indicators: margins, leverage, and asset utilisation are broadly improving. Latest quarter sales of ₹28 Cr with ₹5 Cr net profit shows profitability at the operating level, but one quarter is not a trend. I would categorise this as a fast grower trading at a reasonable multiple. My discipline demands a margin of safety. I would want to see lower debt, more consistent cash conversion, and evidence that ROCE can climb into the mid-teens. If those appear while growth continues, Shradha could be a compounding machine. Until then, I watch, do my homework, and wait for the price to offer safety.

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