Sotac Pharma. (SOTAC)

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

Key Financials

Strengths

• Low P/E of 14.33 with positive profit growth of 28.27% makes the stock optically cheap.
• ROCE of 15.06% indicates acceptable capital efficiency.
• High promoter holding of 72.85% aligns management interests with minority shareholders.
• Piotroski F-score of 6/9 signals moderate financial health.
• PEG of 0.51 suggests undervaluation if recent profit growth can be maintained.

Concerns

• Sales growth of -29.63% shows a severe top-line decline; latest quarter revenue is only ₹37 Cr with ₹2 Cr net profit, reflecting thin margins.
• Missing book value, debt/equity, and ROE data prevent a proper balance-sheet and return-on-equity assessment.
• Dividend yield of 0.09% is negligible, so investor returns depend entirely on capital appreciation.
• Small market cap of ₹123 Cr and high promoter holding may create liquidity and small-cap volatility risks.

AI Analysis

Looking at Sotac Pharma, I am immediately struck by a contradiction. Sales fell 29.63%, yet profits rose 28.27%. In my experience, when earnings grow while sales shrink, I need to understand whether that is smarter product mix, cost discipline, or merely a one-time gain. The latest quarter shows ₹37 Cr in revenue and only ₹2 Cr in net profit, so margins remain thin. At ₹117, the market capitalisation is ₹123 Cr, and the P/E of 14.33 is not demanding. The PEG of 0.51 appears cheap only if that 28% profit growth is sustainable; I would not pay for that growth without evidence that the sales decline is reversing. ROCE of 15.06% is respectable, and the Piotroski F-score of 6 suggests moderate financial health. But I lack book value and debt-to-equity data; in Graham's language, you cannot evaluate a stock without knowing the solidity of the balance sheet. Promoter holding is high at 72.85%, which aligns interests, but it also means a small free float and possible volatility on thin volumes. The dividend yield is negligible at 0.09%, so this is not an income story. The 52-week range of ₹86 to ₹139.65 tells me the stock has been volatile. Given declining sales but improved profits, I classify this as a turnaround situation, not a predictable compounder. I would only invest after watching a few quarters of stable revenue combined with maintained margins. Value investors need a margin of safety; here the low P/E offers some, but the sales deterioration is a serious risk.

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