Subex (SUBEXLTD)
TurnaroundFairStock Score: 12/100 — RISKY
Score breakdown: P/E: 0/3 · ROCE: 0/2 · Growth: 2/2 · Dividend: 0/1
Key Financials
| Current Price | ₹13.88 |
| Market Cap | ₹770.14 Cr |
| P/E Ratio | 25.7 |
| ROCE | -6.44% |
| ROE | -11.25% |
| Dividend Yield | 0% |
| Profit Growth | 24.45% |
| Debt/Equity | 0.08 |
| Sales Growth | -6.66% |
| Promoter Holding | 0% |
| 52-Week Range | ₹6.61 — ₹21 |
| Sector | IT - Software |
| Book Value | ₹6.18 |
Strengths
- Low leverage with debt/equity of only 0.09
- Positive book value of ₹3.43 and latest quarter net profit of ₹3 Cr
- Profit growth of 260.62% indicates a possible earnings inflection, albeit off a small base
- Piotroski F-Score of 5/9 suggests moderate overall financial health
Concerns
- Negative ROE of -11.25% and ROCE of -6.44% point to capital destruction
- Sales declining at -2.61% with a thin latest-quarter net margin of about 4.2%
- Promoter holding is 0.00%, meaning no insider skin in the game
- Expensive valuation: P/E of 156.94 and P/B of 2.62 with zero dividend yield
AI Analysis
Studying Subex from a Graham-Buffett lens, I first ask whether the business earns good returns on capital. The numbers answer plainly: no. ROE is -11.25%, ROCE is -6.44%, and sales growth is -2.61%. A software products company that cannot grow revenue and loses money on equity is not a compounding machine. The P/E of 156.94 is a warning, not an invitation. The 260.62% profit growth looks impressive, but it comes off a tiny, unstable base; the latest quarter net profit is only ₹3 crore on sales of ₹71 crore. That's a thin 4.2% net margin. The PEG of 0.60 is meaningless when current earnings are so small and returns are negative. There are some positive signs. Debt/equity is low at 0.09, book value is ₹3.43, and the Piotroski F-Score of 5/9 suggests moderate financial health. But at ₹8.98 I'm paying 2.62 times book for a business that is destroying value on invested capital. The zero promoter holding is a huge red flag in an Indian small-cap. I want owners with their wealth beside mine, not absent. A dividend yield of 0.00% means I won't be paid to wait. Perhaps this is a turnaround, and the recent profitable quarter hints at that. But value investors don't buy hope at high multiples. Without visible return on capital and renewed revenue growth, there is no margin of safety. I would keep Subex on the watchlist, not in the portfolio.
Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer