Sh. Digvijay Cem (SHREDIGCEM)

FairStock Score: 37/100 — MIXED

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

Key Financials

Strengths

• Debt/Equity of 0.39 indicates a manageable balance sheet, not buried under leverage.
• Promoter holding of 45.12% aligns management with minority shareholders to a reasonable extent.
• Despite a loss-making quarter, full-year ROE at 10.12% and ROCE at 8.73% are positive, so operating assets are not yet value-destructive.
• Dividend yield of 2.16% offers a modest cash return while investors wait.

Concerns

• Latest quarter net loss of ₹7 Cr against sales of ₹183 Cr, with profit growth down 44.31%, shows earnings deterioration.
• P/E of 29.01 and P/B of 3.11 look expensive for a cement business with falling sales and thin returns.
• Piotroski F-Score of 3/9 and FairStock Score of 3/100 signal weak financial health and poor fundamental quality.
• Negative sales growth of -1.83% and ROCE of 8.73% suggest no pricing power and high capital intensity.

AI Analysis

I look for a business I can understand; cement is within my circle, but being understandable isn't enough. At ₹74 with a market cap of ₹1,027 Cr, Sh. Digvijay Cem is priced at 29 times earnings while earnings have fallen 44%. Book value is ₹23.81, so I am paying 3.11 times stated net worth for a company earning 10.12% on equity. That is not a bargain; it is a premium for cyclical exposure. The latest quarter loses ₹7 Cr on sales of ₹183 Cr, and the Piotroski score of 3/9 confirms financial stress. A dividend yield of 2.16% offers some cash cushion, and debt/equity of 0.39 is not scary, but I don't invest to collect 2% while earnings erode. ROCE of 8.73% suggests the operating return is thin. Promoter holding at 45.12% is decent alignment, but no amount of insider ownership turns a mediocre commodity business into a wonderful one at a demanding price. Cement remains cyclical and capital-intensive. In an upturn, margins can recover; but the current numbers show contraction, not recovery. Graham would ask whether downside is protected. Sales growth is -1.83%, profit growth is -44.31%, and a loss-making quarter means there is no margin of safety. I would wait for either a much lower price, closer to book value, or clear evidence that quarterly profits have returned and returns on capital are improving. I would rather miss a flashy rally than sacrifice capital in a business with deteriorating fundamentals. This is not a great compounder today.

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