SP Refractories (SPRL)

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

Key Financials

Strengths

• P/E of 6.01 with 126.80% profit growth gives a very low PEG of 0.09
• Piotroski F-Score of 7/9 suggests improving financial fundamentals
• ROCE of 19.43% indicates decent capital efficiency
• Promoter holding of 69.42% aligns management with minority shareholders
• Latest quarter net profit of ₹2 Cr on sales of ₹16 Cr implies a strong net margin

Concerns

• Zero dividend yield provides no cash return while waiting for value to unlock
• Book value, ROE and debt/equity are absent, leaving leverage and true return on equity unknown
• Market cap of only ₹20 Cr makes the stock vulnerable to volatility and illiquidity; the 52-week range is ₹74.50–₹189.45
• Profit growth of 126.80% far exceeds sales growth of 13.12%, raising doubt about sustainability

AI Analysis

When I see a ₹20 crore company trading at 6 times earnings, my first reaction is caution. Graham taught me that a low price is only an entry ticket; the real test is whether the business earns its keep. SP Refractories shows some encouraging signals: a Piotroski score of 7 out of 9, ROCE of 19.43%, and a profit growth figure of 126.80%. The latest quarter adds ₹2 crore of net profit on ₹16 crore of sales, which implies a net margin of roughly 12.5%. At ₹109.90, the stock is well below its 52-week high of ₹189.45, so Mr. Market has already served a dose of pessimism. But Buffett would ask: is the earnings power durable? Sales growth is a moderate 13.12%, far below the profit jump. That gap tells me the low P/E of 6.01 and PEG of 0.09 are cheap only if the profit explosion is not a one-off. I also cannot ignore missing data: no book value, no ROE, no debt-equity ratio. In a microcap, hidden leverage is a silent killer. The zero dividend yield is not fatal, but it means investors rely entirely on capital gains and reinvestment. On the positive side, promoter holding of 69.42% is a strong alignment indicator, and the F-score of 7/9 suggests improving financials. This looks like a fast grower in an early, promising stage, but a Grahamite would demand a margin of safety. The current price is halfway between the low and high, and with only ₹20 crore market cap, one bad quarter could erase value quickly. I would keep it on a watch list, size any position very small, and wait for evidence that this growth is repeatable.

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