Suryoday Small (SURYODAY)

FairStock Score: 39/100 — MIXED

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

Key Financials

Strengths

• Trading at a price-to-book value of 0.78, paying ₹145.55 for ₹186.35 of book value.
• Piotroski F-Score of 7/9 suggests reasonable recent financial health.
• Sales are growing at 11.48% and profits at 9.79%, showing positive momentum.
• Latest quarter is profitable: ₹544 Cr sales and ₹37 Cr net profit.

Concerns

• Return on equity of 3.56% and ROCE of 7.28% are too low to build a wide moat.
• P/E of 20.50 with a PEG of 1.93 means the stock is not cheap on an earnings-growth basis.
• Promoter holding of 22.44% is low for an Indian small bank, raising alignment questions.
• Zero dividend means minority shareholders receive no cash while waiting for value creation.

AI Analysis

At ₹145.55, Suryoday Small is trading at 0.78 times book value, so I get ₹186.35 of book for every ₹145.55 I pay. It looks like a Graham bargain at first blush. But the price multiple must be earned. This bank's return on equity is just 3.56% and its return on capital employed is 7.28%. Those are weak returns; a low book-value multiple is not a bargain if capital inside the business cannot earn a reasonable return. A bank that earns so little on its equity has to be examined for asset quality and management skill, not just the discount. The market charges a P/E of 20.50, which gives an earnings yield of only about 4.9%. Profits are growing at 9.79% and sales at 11.48%, so the PEG ratio of 1.93 reminds me that I am paying almost twice the growth rate. The latest quarter adds ₹544 Cr of sales and ₹37 Cr of net profit, but one quarter does not change the economics. There is zero dividend, so the minority shareholder must rely entirely on management to reinvest and compound profitable capital. Promoter holding at 22.44% is not high for an Indian financial institution; it raises questions about alignment. Piotroski F-score of 7/9 is mildly reassuring on recent fundamentals, but it does not overcome the weak return profile or a FairStock score of 31/100, which labels the stock risky. Charlie and I are not always contrarians. I need a larger gap between price and intrinsic value when profitability is this weak. If the ROE stays near 3.5%, book value will grow painfully slowly and today's book-value discount may not narrow. This is an asset play, not a compounder. I would let the price fall lower, or wait for evidence of materially higher returns on capital before thinking that this below-book stock is a value gem.

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