Suraj (SURAJLTD)

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

Key Financials

Strengths

• Promoter holding of 75% indicates strong owner alignment and long-term commitment.
• Low debt/equity of 0.32 provides financial cushion through cyclical downturns.
• Positive ROCE of 12.73% suggests the operating capital is still generating some return.
• Latest quarter was profitable: ₹1 Cr net profit on ₹62 Cr sales, avoiding a loss.

Concerns

• Profit growth collapsed by 80.45% and P/E is 0.00/not meaningful due to severely impaired earnings.
• ROE is negative at -0.32%, yet P/B is 3.52; paying a rich multiple to book for poor returns.
• Piotroski F-Score of 3/9 points to deteriorating financial health.
• Sales declined 2.72% and latest-quarter net margin is razor-thin, roughly 1.6%.

AI Analysis

At first glance, Suraj fails Graham's basic test: it earns almost nothing. The P/E is shown as 0.00, effectively meaningless because profits have collapsed 80.45%, and ROE is -0.32%. The latest quarter shows ₹62 Cr sales but only ₹1 Cr net profit—a razor-thin margin. This is not a business with pricing power; it is a cyclical iron and steel player caught in a weak part of the cycle. The balance sheet is not alarming: debt/equity is 0.32 and ROCE is 12.73%, so operations still generate some return on capital. But the Piotroski F-Score of 3/9 warns that fundamentals are deteriorating, not improving. I cannot ignore negative return on equity while the market price is ₹249.49 against book value of ₹70.85. Paying 3.52 times book for a business whose earnings have all but disappeared offers no margin of safety. On the positive side, 75% promoter holding aligns owners with public shareholders, and the small 0.66% dividend suggests some discipline. Yet sales are down 2.72% and profit down 80.45%; this tells me the steel cycle, not managerial brilliance, is dominating results. Graham would remind me: price is what you pay, value is what you get. At this price, I get weak profitability and a thin ₹1 Cr quarterly profit on ₹62 Cr sales. I would file Suraj under 'too hard' until I see sustained quarterly profit recovery, a higher Piotroski score, and a price that provides real margin of safety. Cyclical businesses can be wonderful buys, but usually only when the cycle is against them and the balance sheet is strong. Here, I prefer to wait.

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