Tatva Chintan (TATVA)
Fast GrowerFairStock Score: 24/100 — RISKY
Score breakdown: P/E: 0/3 · ROCE: 0/2 · Growth: 2/2 · Dividend: 0/1
Key Financials
| Current Price | ₹1,717.3 |
| Market Cap | ₹4,017.12 Cr |
| P/E Ratio | 78.13 |
| ROCE | 1.2% |
| ROE | 4.32% |
| Dividend Yield | 0.06% |
| Profit Growth | 103.51% |
| Debt/Equity | 0.15 |
| Sales Growth | 36.35% |
| Promoter Holding | 72.02% |
| 52-Week Range | ₹981.5 — ₹1,838.85 |
| Sector | Chemicals & Petrochemicals |
| Book Value | ₹334.03 |
Strengths
- Strong top-line growth of 52.89% shows the company is winning market demand.
- Conservative balance sheet with debt-to-equity of 0.11; little financial risk.
- Promoters own 72.02%, aligning interests with minority shareholders.
- Piotroski F-score of 7/9 indicates decent operational and solvency health.
- Recent quarter profitable: ₹15 Cr net profit on ₹131 Cr sales (~11.5% margin).
Concerns
- P/E of 87.34 and P/B of 4.23 leave no margin of safety.
- ROE of 4.32% and ROCE of 1.20% reflect weak capital efficiency; profit growth of 1000% is off a low base.
- Negligible dividend yield of 0.08% means returns depend entirely on speculative price gain.
- FairStock Score of 24/100 and 52-week range of ₹976-₹1838 highlight high risk and volatility.
AI Analysis
At ₹1,311, Tatva Chintan demands a P/E of 87.34. That's a steep price for any company, let alone a specialty chemicals maker with a return on equity of just 4.32% and ROCE of 1.20%. In Graham's language, I'm being asked to pay nearly four and a half times book value for a business that earns little more than a fixed deposit on that book. The 52.89% sales growth catches the eye, and the 1000% profit growth looks spectacular until I realize it is from a small base. The latest quarter's net profit of ₹15 Cr on sales of ₹131 Cr — roughly 11.5% margin — is decent, but it still leaves an annualized earnings power that, at this market cap, leaves no margin of safety. I do appreciate the zero-drama balance sheet: debt-to-equity of only 0.11. Promoter holding of 72% means those in control have their wealth alongside mine. A Piotroski F-score of 7 out of 9 suggests the operational health isn't deteriorating. Yet a FairStock Score of 24/100 flags risk for good reason. The fundamental question is whether this growth is durable and whether returns on capital will improve. If sales can double while profits grow faster, ROE may climb, and the stock can digest its valuation. But as a value investor, I don't predict the future; I demand a price that rewards me for the risks I take. At current levels, I'm paying for perfect execution, not for uncertainty. I'd wait on the sidelines until the price gives me a margin of safety.
Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer