Swelect Energy (SWELECTES)

FairStock Score: 24/100 — RISKY

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

Key Financials

Strengths

• Headline valuation appears modest: P/E of 14.25 and P/B of 1.31.
• Strong recent momentum: sales up 51.71% and profit up 197.09%.
• Piotroski F-score of 7/9 suggests improving financial health and earnings quality.
• Promoter holding of 56.37% aligns management with shareholders.
• Debt/equity of 0.72 is manageable for a capital-intensive business.

Concerns

• ROE of 1.45% and ROCE of 5.06% imply poor returns on capital and weak moat.
• Latest quarterly net profit of ₹10 Cr is small relative to ₹784 Cr market cap, suggesting thin near-term earnings power.
• Dividend yield of 0.58% offers little cushion while waiting for value.
• Wide 52-week range (₹483.10–₹977.00) and low ROE indicate cyclicality; PEG based on one-year growth may be misleading.

AI Analysis

At ₹671.65, this appears reasonable on the surface: a P/E of 14.25 and a P/B of 1.31. But Graham taught me to look behind the multiple. Book value is ₹512.40, yet this business earns a reported ROE of only 1.45% and ROCE of 5.06%. That is not a wonderful franchise; it is a capital-intensive operation without an obvious moat. The 51.71% sales growth and 197.09% profit growth would excite many investors, but they look like a cyclical upturn off a low base. A PEG of 0.11 is only as trustworthy as the durability of that growth, and I cannot trust that in heavy electrical equipment. The latest quarter shows sales of ₹139 Cr and profit of ₹10 Cr; that profit level is modest against a ₹784 Cr market cap. Piotroski's F-score of 7/9 is a positive, and debt/equity of 0.72 is manageable. Promoter holding of 56.37% also aligns interests. Still, the dividend yield of just 0.58% means I am not being paid to wait. The 52-week range of ₹483.10 to ₹977.00 confirms this is a volatile, cyclical stock. I also see a mismatch between the low stated ROE and the low P/E; such inconsistencies make me want to verify the reported earnings before acting. FairStock's mixed score of 50/100 matches my view. At 1.31 times book for a business earning so little on that book, the margin of safety is thin. I would wait for either a lower price or evidence that ROE and ROCE are structurally moving higher. For now, this stays on my watchlist, not in my portfolio.

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