Suprajit Engg. (SUPRAJIT)

FairStock Score: 28/100 — RISKY

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

Key Financials

Strengths

• Double-digit sales growth of 17.72% shows demand for products is expanding.
• ROE of 20.53% demonstrates good historical return on shareholders' equity.
• Promoter holding of 45.14% keeps management aligned with minority investors.
• Debt/equity of 0.68 is manageable though not negligible.
• Latest quarter sales of ₹979 crore indicate meaningful business scale.

Concerns

• Net profit fell 59.38%, and latest quarter net margin is only ~1.3% (₹13 crore on ₹979 crore sales).
• P/E of 42.82 and PEG of 2.42 are expensive given the earnings decline.
• Piotroski F-score of 4/9 suggests weak fundamental health across profitability, leverage, and efficiency.
• ROCE of 10.97% is significantly below ROE of 20.53%, indicating debt is inflating equity returns.

AI Analysis

At ₹425, Suprajit Engineering trades at 42.8 times earnings and 4.5 times book. That is a rich price for a business whose profit fell 59.38%, and whose latest quarter earned just ₹13 crore on ₹979 crore of sales—a net margin barely above 1%. I do not like paying high multiples for collapsing earnings. The company is in auto components, an inherently cyclical field. It does have strengths: 17.72% sales growth shows demand, and a 20.53% ROE suggests decent capital efficiency when circumstances are normal. But ROCE is only 10.97%, and with debt/equity of 0.68, the leverage explains much of the gap. The Piotroski score of 4 out of 9 flags weak fundamentals. The P/E of 42.8 combined with a PEG of 2.42 tells me growth expectations are still expensive; Mr. Market is counting on a recovery. Graham would demand a margin of safety. At 4.5 times book and sub-1% dividend yield, there is no margin of safety for a cyclical whose earnings are disappointing. Promoter holding of 45.14% is reassuring, but it does not justify paying a premium. I would need to see profit margins stabilise and ROCE move closer to ROE before giving this serious consideration. The sales growth is a positive, but in an auto ancillary business, volume without profit is not enough. This looks like a cyclical company at an awkward point in the cycle, not a wonderful business at a fair price. I would put it on the watch list, not in the portfolio.

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