Tarmat (TARMAT)

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

Key Financials

Strengths

• Trades at P/B of 0.73, a ~27% discount to book value of ₹73.95, offering some margin of safety.
• Debt/Equity of only 0.06 means financial leverage is low and the balance sheet is clean.
• Piotroski F-Score of 7/9 suggests improving fundamentals across profitability, leverage, or efficiency.
• Profit growth of 232.35% shows meaningful improvement from a very low earnings base.
• Latest quarter is profitable: ₹27 Cr sales and ₹1 Cr net profit, indicating the business is generating some earnings.

Concerns

• ROE of 2.26% and ROCE of 1.55% show very weak returns on capital, suggesting no economic moat.
• P/E of 46.31 is expensive relative to current earnings; the market is pricing in a turnaround that has not fully materialized.
• Promoter holding at 30.13% is on the lower side for a small-cap construction company, raising alignment questions.
• No dividend yield; returns depend entirely on future capital gains and execution.

AI Analysis

Let me start with the business, not the ticker. Tarmat is a civil construction company with a market cap of ₹178 Cr. The latest quarter tells a clear story: sales of ₹27 Cr and net profit of just ₹1 Cr. That is a very thin margin. Over the full year, the P/E of 46.31 says the market is paying a high multiple for those earnings, yet ROE is only 2.26% and ROCE is only 1.55%. In other words, this company earns very little on either shareholder equity or total capital employed. That is not the hallmark of a franchise with a durable moat. Construction is also a competitive, low-margin business, and with promoter holding at 30.13%, minority owners have to rely on a management team whose ownership stake is modest. On the positive side, the balance sheet is clean: debt/equity is just 0.06, so there is no distress. And at ₹53.93, the stock trades at a 27% discount to book value of ₹73.95. Graham would be interested in that margin of safety. But a low P/B only works if assets earn a decent return; at ROE of 2.26%, the book value is not being put to productive use. The 232.35% profit growth and PEG of 0.39 look impressive, but the absolute quarterly profit is only ₹1 Cr—the base is far too small to justify a P/E of 46. This is not a compounder yet. I would classify it as an asset play, contingent on evidence that management can improve returns. Watch whether sales growth can accelerate from 4.48% and whether profit can continue at these levels. Until then, patience, not action.

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