Tenneco Clean (TENNIND)

FairStock Score: 55/100 — STEADY

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

Key Financials

Strengths

• Exceptional ROCE of 57.30% indicates strong capital efficiency.
• Near-zero leverage: debt/equity of 0.03 and free cash flow of ₹535 Cr.
• High promoter holding of 74.79% aligns management with minority shareholders.
• Piotroski F-Score of 7/9 signals solid financial health.
• Sales growth of 14.23% shows underlying demand for products.

Concerns

• Valuation is rich: P/E of 41.53 and P/B of 24.71 versus book value of ₹23.17.
• Profit growth of 10.26% lags sales growth, indicating possible margin pressure.
• Zero dividend yield means total returns depend entirely on future price appreciation.
• PEG of 3.39 suggests the growth rate does not justify the current multiple.

AI Analysis

Let's look at Tenneco Clean through the lens of business quality and price. On quality, this is an impressive franchise. ROCE of 57.30% tells me management is deploying capital exceptionally well, and with debt/equity of 0.03, the balance sheet is almost debt-free. They generated ₹535 Cr of free cash flow, and the Piotroski score of 7/9 confirms healthy financials. Promoters own 74.79%, aligned with minority shareholders. These are exactly the characteristics I admire: a simple business, high returns on capital, and low leverage. But price is where I pause. At ₹572.55, the market is paying 41.53 times earnings and 24.71 times book value, while book value is only ₹23.17. That is a very demanding price for a company growing sales at 14.23% and profits at 10.26%. The PEG ratio of 3.39 tells me the growth rate does not justify the multiple. In my experience, overpaying for a wonderful business is still a mistake; the margin of safety must come from purchase price. With a dividend yield of zero, the shareholder must rely entirely on future appreciation, and at this valuation, a lot of good news is already priced in. The latest quarter sales are ₹1,285 Cr and net profit ₹119 Cr, so operations are solid. But profit growth lagging sales growth suggests some margin pressure, and a FairStock Score of 51 is mixed. This is a quality stalwart, not a bargain. I would wait for a lower price or a better growth trajectory before committing new capital.

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