Solex Energy (SOLEX)

FairStock Score: 50/100 — MIXED

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

Key Financials

Strengths

• Sales growth of 136.79% shows strong demand and scaling revenue.
• Promoter holding of 66.15% aligns management interests with minority shareholders.
• ROCE of 28.22% suggests decent operational return on capital employed.
• Latest quarter is still profitable, with ₹8 Cr net profit on ₹318 Cr sales.
• P/E of 19.96 is not extreme if high growth can be sustained.

Concerns

• Profit fell 40.40% despite revenue jumping 136.79%, indicating severe margin compression.
• Latest quarterly net margin is only ~2.5%, leaving a very thin earnings cushion.
• Debt/Equity of 1.56 is high, and Piotroski F-score of 4/9 points to weak financial health.
• P/B of 7.50 against book value of ₹172.54 means the market is pricing in aggressive future growth; dividend yield of 0.06% offers no downside support.

AI Analysis

At a glance, Solex Energy excites on the top line but not on the bottom line. Sales growth of 136.79% is eye-catching, but profit declined 40.40%. That alone makes me sceptical: growth that doesn't flow to owners is often just expensive activity. In the latest quarter, the company did ₹318 Cr of sales and kept only ₹8 Cr as net profit—a net margin of about 2.5%. Thin margins in a capital-heavy industry do not build durable value. The balance sheet also worries me. Debt/equity stands at 1.56, which is not the kind of conservative structure I prefer. ROCE of 28.22% looks respectable, but with this leverage and a F-score of only 4 out of 9, I have little confidence in financial quality. Promoter holding at 66.15% is encouraging—it ties management to shareholders. Dividend yield of 0.06%, however, is almost nothing; this is a business asking shareholders to wait for capital gains. Valuation is not cheap. At ₹1,294.15, market cap is ₹932 Cr, with P/E of 19.96 and P/B of 7.50. Book value is ₹172.54, so the market is paying a big premium for growth. PEG of 0.15 may look attractive, but it is dangerous because profit growth is negative—I cannot trust a PEG built on a falling E. A Graham investor needs margin of safety; at 7.5 times book with falling profits and rising debt, I don't see it. I would keep this on the watchlist, not buy it yet. I need proof that rising sales can convert into rising profits without additional leverage.

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