T N Newsprint (TNPL)

FairStock Score: 31/100 — RISKY

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

Key Financials

Strengths

• Trades at ₹142.13 against book value of ₹307.20, a P/B of 0.46, offering asset-backed downside support.
• Dividend yield of 2.19% provides some return even while earnings remain depressed.
• Piotroski F-score of 6/9 indicates recent improvement in financial health.
• Profit growth of 115.78% shows a pickup over the prior low base, giving a possible turnaround starting point.
• Promoter holding of 35.32% keeps promoter interests partially aligned with shareholders.

Concerns

• ROE of 1.40% and ROCE of 5.54% are too low; the business is not earning attractive returns on net worth or capital employed.
• Quarterly net profit of ₹7 Cr on sales of ₹1,121 Cr gives a net margin below 0.7%, leaving very little cushion.
• Sales growth is -0.25%, so top-line momentum is absent.
• Debt/equity of 0.90 combined with low profitability creates risk to liquidity if conditions deteriorate.

AI Analysis

Let me start with first principles: I am buying a business, not a ticker. TNPL trades at ₹142 against a book value of ₹307.20, so the market gives me almost 54% discount to net assets. That looks like an asset play, but the assets must earn their keep. They don’t. ROE is just 1.40% and ROCE is 5.54%—far below any acceptable return on capital. In the latest quarter, sales were ₹1,121 Cr and net profit was only ₹7 Cr, a net margin below 0.7%. The 115.78% profit growth is mathematically impressive but comes from a tiny base, so I can’t trust it as durable earnings power. Sales growth is -0.25%, flat at best. With debt/equity at 0.90, this capital-intensive paper business carries significant financial leverage while its operating returns are weak. The P/E of 31.99 is meaningless in a year with depressed earnings; I would look at asset backing and normalized earnings instead. Piotroski F-score of 6/9 gives me mild hope that operations are improving, and a 2.19% dividend yield offers some compensation while I wait. Promoter holding of 35.32% is moderate, not commanding. This is not a wonderful business at a fair price; it is a mediocre business at a low asset-related price. I need to see ROCE improve, debt come down, and margins move into a healthy range. Until then, I will classify it as a risky asset play, not a compounding machine.

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