Shriram Pistons (SHRIPISTON)

FairStock Score: 61/100 — STEADY

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

Key Financials

Strengths

• High ROCE of 25.70% with low debt-to-equity of 0.20 indicates strong capital efficiency and a conservative balance sheet.
• Consistent growth: sales up 20.67%, profit up 17.91%, and 5-year revenue CAGR of 17.32%.
• Latest quarter remains robust with ₹1,023 crore sales and ₹126 crore net profit.
• Promoter holding of 43.75% aligns management interests with minority shareholders.
• Piotroski F-Score of 7/9 points to sound financial health.

Concerns

• Free cash flow of ₹49 crore is thin relative to reported profits, raising questions about cash conversion.
• Valuation is not cheap: P/E of 24.46 and P/B of 5.20 against book value of ₹688.89.
• Dividend yield of just 0.32% offers negligible income support while waiting.
• Auto components are cyclical, and the 52-week range of ₹2,444.80–₹4,590.05 shows earnings and sentiment can swing sharply.

AI Analysis

When I study Shriram Pistons, I see many of the qualities I look for in a business. It earns a strong 25.70% return on capital employed while carrying very little debt, with a debt-to-equity ratio of only 0.20. That combination of profitability and conservatism is rare. Sales grew 20.67% and profits rose 17.91%, while the five-year revenue CAGR is a steady 17.32%. The latest quarter delivered ₹1,023 crore in sales and ₹126 crore in net profit. Promoter holding of 43.75% aligns management with minority shareholders, and a Piotroski F-score of 7 out of 9 points to a healthy balance sheet. But the price I pay determines my return. At ₹3,584.60, the market capitalisation is ₹13,730 crore, which translates to a P/E of 24.46 and a price-to-book of 5.20 against book value of ₹688.89. This is not a Graham-style bargain. The 52-week range, from ₹2,444.80 to ₹4,590.05, reminds me that auto components are exposed to cycles, so I must build in a cushion. My main reservation is cash generation. Free cash flow of ₹49 crore looks thin next to the reported profit level. I cannot live on accounting earnings; cash is what pays me. The dividend yield is only 0.32%, so I am not being compensated while waiting. The PEG ratio of 1.27 suggests growth is priced almost exactly, leaving little room for error. I would put this in the 'fast grower' category, but I would wait for a better price or clearer evidence that cash conversion improves. A wonderful business can still be a poor investment if bought too dear.

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