Suryalak. Cott. (SURYALAXMI)

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

Key Financials

Strengths

• Price-to-book of 0.43: buying ₹142.68 of book value for ₹61.29.
• Promoter holding of 60.93% indicates significant insider ownership.
• Latest quarter remains profitable: ₹1 Cr net profit on ₹184 Cr sales.

Concerns

• ROE of 1.92% and ROCE of 7% indicate weak returns on capital.
• Sales down 5.13% and profits down 43.48% show deteriorating fundamentals.
• Debt/equity of 0.96 leaves no cushion for a downturn.
• Piotroski F-Score of 3/9 and zero dividend yield point to financial stress.

AI Analysis

Let's examine Suryalak Cotton as a Graham cigar-butt. The market price is ₹61.29, while book value is ₹142.68; that means I can buy a rupee of net worth for 43 paise. But cheapness must be tested against earning power. Here, return on equity is only 1.92% and ROCE is 7% - far from impressive for a leveraged textile business. Debt/equity of 0.96 confirms the balance sheet is leveraged. Sales are down 5.13% and profits down 43.48%; the latest quarter earned just ₹1 crore on ₹184 crore of sales. A Piotroski F-Score of 3/9 tells me the company is weak operationally and financially. P/E of 25.87 looks expensive despite the low P/B because earnings are so thin. This is a commodity textile business without a moat; pricing power is absent. The promoter holding of 60.93% is encouraging, but ownership alone cannot offset a mediocre business. There is no dividend, so my only return must come from asset realization or a future recovery. At a market cap of only ₹105 Cr and a price of ₹61.29 against a book value of ₹142.68 per share, the margin of safety exists only if the book value is real, conservatively valued, and not eroded by continued losses. With leverage near 1:1, any write-down in inventory or receivables could dissolve the apparent discount. I would classify this as an asset play, not a franchise. It remains on my watchlist; I want evidence of stable sales, better operating margins, and debt reduction before deploying capital. The 52-week range of ₹43 to ₹69.80 reminds me that textile sentiment can swing sharply. Patience and scrutiny are essential.

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