Texmaco Rail (TEXRAIL)

FairStock Score: 33/100 — RISKY

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

Key Financials

Strengths

• Debt/equity at 0.31 is conservative, reducing financial risk during downturns.
• Promoter holding of 48.34% aligns management with minority shareholders.
• Book value of ₹60.36 and P/B of 1.74 mean the price is not massively ahead of underlying assets.
• Latest quarterly revenue of ₹1,041 Cr shows meaningful industrial scale.
• ROCE of 11.15% is respectable given the low leverage.

Concerns

• ROE is only 6.20%, far too low to justify a P/E of 25.59.
• Sales are down 4.16% and profit is down 13.95%, showing shrinking business momentum.
• Piotroski F-Score of 3/9 points to deteriorating operational health.
• Latest quarter net profit margin is roughly 3.7% (₹39 Cr on ₹1,041 Cr sales), leaving a thin cushion.

AI Analysis

As a value investor, I start with business economics, not the stock price. Texmaco Rail is selling at ₹104.76, or ₹4,262 crore market cap. That puts it at 25.59 times earnings. For that multiple, I demand a quality business with growing earnings and high returns. I see the opposite. Sales have fallen 4.16%, profit has fallen 13.95%, and the latest quarter produced only ₹39 crore profit on ₹1,041 crore sales — a very thin margin. ROE is just 6.20%, and ROCE is 11.15%. A business earning 6% on equity is not a compounding machine; in fact, it is close to what a mediocre bond might pay, without the bond’s certainty. The balance sheet is not alarming: debt/equity of 0.31 and book value of ₹60.36. But a P/B of 1.74 is not bargain-basement, especially when returns are weak. Promoter holding of 48.34% is respectable, but large ownership does not by itself create a moat. The Piotroski F-Score of 3/9 is a strong warning: the company is deteriorating operationally, not improving. Dividend yield of 0.72% offers no cushion. This looks like a cyclical industrial business suffering a down phase. The 52-week range of ₹78.05 to ₹153.00 shows the stock has been volatile. The market is paying a growth multiple for a company that is currently shrinking. In Graham’s language, Mr. Market is offering hope; I need evidence. I would wait for a lower price, or for sales and margins to actually turn up, before deploying capital. FairStock’s 5/100 risk score seems consistent with my own caution. A mediocre business at a reasonable price is still mediocre. I need either a wonderful business at a fair price, or a fair business at a wonderful price. Texmaco Rail is neither today.

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