S P Apparels (SPAL)

FairStock Score: 50/100 — MIXED

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

Key Financials

Strengths

• Debt/Equity is only 0.45, and the Piotroski F-Score of 7/9 suggests a reasonably healthy balance sheet.
• Promoter holding of 61.93% aligns management's interests with minority shareholders.
• Profit growth of 11.50% outpacing sales growth of 6.58% indicates some operating leverage or cost discipline.
• P/E of 15.64 and P/B of 2.48 are not excessive, especially after the stock corrected from its ₹1,220 high.
• ROCE of 14.25% is respectable and above the cost of capital.

Concerns

• Dividend yield is negligible at 0.28%, so shareholders depend entirely on reinvestment; with ROE of only 11.20%, retained capital isn't earning exceptional returns.
• PEG of 1.73 implies the market is paying a full price for moderate growth.
• Sales growth of 6.58% is pedestrian, raising questions about long-term compounding ability.
• FairStock Score of 41/100 and a sharp drawdown from the 52-week high suggest the market is not convinced; further operational evidence is needed.

AI Analysis

As I look at S P Apparels, I ask myself: is this a wonderful business I want to own at the right price? The numbers say it is a decent, average business rather than a fortress. At ₹811.75, the market marks it at ₹1,775 crore, paying 15.64 times earnings and 2.48 times book value. Mr. Market has priced the stock down from ₹1,220 to ₹811.75, but that does not automatically mean value; price must be tested against fundamentals. The balance sheet is safe: debt-equity is 0.45 and the Piotroski F-score of 7/9 tells me there are no obvious financial red flags. Promoter holding of 61.93% keeps management aligned with shareholders, which I respect. But the returns on equity and capital are only 11.20% and 14.25% respectively — hardly a sign of an impregnable moat. Sales grew 6.58% and profit grew 11.50%; profit growth above sales can come from cost control and operating leverage, yet I need to see that continue before deciding it is a durable advantage. The dividend yield of 0.28% means nearly all earnings are retained, so management must earn high returns on those retained rupees. At a PEG of 1.73, the growth is not being handed to me cheaply. Ben Graham taught me to buy with a margin of safety; here the margin is thin. I would put this in my 'too hard' pile unless the price drops further or sales growth visibly accelerates. It's a steady, moderate business, but not a compelling bargain.

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