Supreme Petroch. (SPLPETRO)

FairStock Score: 41/100 — MIXED

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

Key Financials

Strengths

• Conservative balance sheet with debt/equity of only 0.07 and positive free cash flow of ₹28 Cr
• Promoter holding of 64.24% aligns management with public shareholders
• ROCE of 22.76% shows strong capital efficiency in normal operating conditions
• Modest dividend yield of 1.40% provides some income while waiting

Concerns

• Sharp earnings deterioration: sales -10.01%, profits -50.25%, latest quarter net margin only ~2.4%
• Expensive valuation: P/E 49.64 and P/B 7.44 despite weak current earnings
• Piotroski F-score of 3/9 and 5-year revenue CAGR of 2.41% point to financial stress and stagnation
• Cyclical petrochemical exposure with no visible recovery catalyst in the numbers

AI Analysis

This business reminds me that a good company is not always a good investment. Supreme Petroch earns a ROCE of 22.76% and carries almost no debt—debt to equity of only 0.07. Promoters own 64.24%, so interests are aligned. But I cannot ignore the numbers. Sales have fallen 10.01%, profits are down 50.25%, and the latest quarter's net profit of ₹30 Cr on ₹1,265 Cr sales is a razor-thin margin. The 5-year revenue CAGR is just 2.41%; this is not a growth machine. At ₹820, I am asked to pay 49.64 times trailing earnings and 7.44 times book value for a cyclical petrochemical business in a downcycle. That is no margin of safety. The Piotroski F-score of 3/9 is a red flag—it tells me the company's financial health is deteriorating. Free cash flow of ₹28 Cr is tiny against a ₹13,479 Cr market cap. Yes, the balance sheet is conservative, and ROCE suggests decent capital allocation during good years. But a cyclical with declining earnings deserves a low multiple, not a high one. The market prices it near the top of its 52-week range, despite the profit collapse. The FairStock Score of 15/100 also flags risk. If I buy here, I depend entirely on a sharp cyclical recovery to justify the price. That is speculation, not investing. In Graham's language: no margin of safety, limited growth, cyclical vulnerability. I would wait for a better price or evidence of sustained margin recovery.

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