Tirupati Forge (TIRUPATIFL)

FairStock Score: 31/100 — RISKY

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

Key Financials

Strengths

• Sales growth of 85.92% and profit growth of 54.20% demonstrate strong near-term demand
• Low debt/equity of 0.21 provides financial cushion in a cyclical industry
• Piotroski F-Score of 7/9 indicates reasonably sound financial health
• Promoter holding of 49.01% aligns owner interests
• PEG ratio of 1.09 suggests growth is not entirely overpriced if the profit trajectory continues

Concerns

• P/E of 76.62 and P/B of 4.65 leave very little margin of safety
• Latest quarter shows net profit of only ₹2 Cr on sales of ₹49 Cr, implying a thin roughly 4% margin
• ROCE of 12.37% is moderate, not the high-return business Buffett seeks
• Zero dividend yield means investors rely solely on future price appreciation

AI Analysis

At ₹45.55, Tirupati Forge is no bargain. I am paying 76.62 times trailing earnings and 4.65 times book value for a casting and forging business. While the 85.92% sales growth and 54.20% profit growth catch the eye, I must remind myself that growth is only meaningful when purchased at a sensible price. The latest quarter tells me about quality: ₹49 Cr of sales yielded only ₹2 Cr of net profit, a thin margin of around 4%. That is a business with limited pricing power in a competitive, cyclical industry. ROCE at 12.37% is respectable but not exceptional; I prefer businesses that earn much higher returns on capital without needing heavy reinvestment. On the positive side, debt/equity is only 0.21, and the Piotroski score of 7 suggests the balance sheet is not deteriorating. Promoter holding of 49.01% is adequate, though I wish it were higher. The PEG ratio of 1.09 appears reasonable, but only if 54% profit growth can be sustained for years, and forgings and castings are tied to industrial and auto cycles, which rarely cooperate. There is no dividend, so my return depends entirely on the market rewarding this growth story. In Graham's language, the margin of safety is missing. I would not follow the crowd here; better to wait for a lower price or evidence that margins and returns can improve materially.

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