Sudarshan Colorants (SUDARCOLOR)

FairStock Score: 35/100 — MIXED

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

Key Financials

Strengths

• Very low debt/equity of 0.04 provides balance sheet strength during a cyclical downturn.
• High promoter holding of 70.26% aligns management with minority shareholders.
• Stock trades at 1.64 times book value of ₹215.22, offering some asset-based support.
• Trailing P/E of 13.20 is not demanding if earnings stabilise, though current profits are weak.

Concerns

• Sales declined 17.52% and profit fell 51.97%, with the latest quarter reporting a net loss of ₹2 crore.
• Piotroski F-Score of 3/9 signals significant deterioration in financial health.
• ROE of only 8.49% and zero dividend yield make the stock unattractive for passive income seekers.
• FairStock Score of 19/100 flags the business as risky at this point.

AI Analysis

At first glance, Sudarshan Colorants looks like the kind of business I would study with caution. It is a specialty chemical producer in dyes and pigments, an area that can be a good compounding business if it has pricing power. But the recent record tells a more sober story. Sales have fallen by more than 17% and profits have collapsed by nearly 52%. In the latest quarter the company actually lost ₹2 crore on sales of ₹176 crore. A Piotroski F-Score of 3 out of 9 reinforces the message: the fundamentals have deteriorated materially. The balance sheet is the one genuinely reassuring point. Debt/equity is 0.04, so Sudarshan is not burdened by leverage. Book value is ₹215.22 and the stock trades at 1.64 times book, which offers some margin of safety if earnings stabilise. Promoters own 70.26%, and alignment with minority shareholders is positive. However, the earnings power is questionable. Return on equity is only 8.49%, and return on capital employed, while better at 15.18%, is not spectacular for a cyclical chemical business. The trailing P/E of 13.20 looks reasonable, but with profits falling, trailing earnings are not a reliable guide. No dividend is paid, so the investor receives no cash while waiting for recovery. The FairStock score of 19/100 says 'risky', and I agree. This is a cyclical company, not a stalwart. In pigments, demand tracks industrial activity, and the current downturn may eventually reverse. But I would not rush to buy. I want evidence of stabilising sales, positive quarterly profit, and a F-Score above 5 before believing the cycle has turned.

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