Tega Inds. (TEGA)

FairStock Score: 17/100 — RISKY

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

Key Financials

Strengths

• Five-year revenue CAGR of 15.25% shows historical growth capability
• ROCE of 17.80% with debt/equity of 0.21 indicates efficient capital use and a conservative balance sheet
• Free cash flow remains positive at ₹66 crore despite the earnings dip
• High promoter holding of 67.27% aligns management with minority shareholders

Concerns

• Profit growth collapsed by -63.67%, with latest quarterly net profit of only ₹20 crore on sales of ₹404 crore
• Valuation is expensive: P/E of 67.64 and P/B of 10.67 leave no margin of safety
• Piotroski F-Score of 3/9 signals weak financial health
• Dividend yield of 0.11% is negligible, and sales growth is negative at -1.36%

AI Analysis

At ₹1,699.80 with a market cap of ₹13,656 crore, Tega Industries does not look cheap. The trailing P/E of 67.64 and price-to-book of 10.67 are demanding against a book value of ₹159.36. Graham would insist on a margin of safety; today the market is paying for future perfection. The business has shown some historical vitality—five-year revenue CAGR of 15.25%—and ROCE of 17.80% suggests decent capital allocation. The balance sheet is reasonably conservative: debt/equity of only 0.21 and free cash flow positive at ₹66 crore. Promoter holding at 67.27% aligns ownership with minority shareholders. But the latest scorecard is troubling. Sales growth is -1.36%, profit growth fell -63.67%, and the latest quarter produced just ₹20 crore net profit on ₹404 crore sales. ROE has dropped to 12.57%. The Piotroski F-Score of 3 out of 9 is a red flag: the firm is showing financial stress, not financial strength. A dividend yield of 0.11% means the investor is not being paid to wait. I cannot call this a durable compounder yet. It may be a cyclical business caught in an industrial downcycle—earnings have collapsed while the share price remains high. If the cycle turns, today's high P/E could normalize quickly. But as a value investor, I need evidence of stabilisation: restored profit growth, a rising F-Score, and sustained free cash flow. Without that, the stock offers gamble-like risk, not investment. The figures whisper caution; I will wait on the sidelines until the fundamentals match the price.

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