United Polyfab (UNITEDPOLY)

FairStock Score: 32/100 — RISKY

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

Key Financials

Strengths

• Sales growth of 14.91% shows reasonable top-line momentum.
• ROCE of 15.11% indicates existing capital is being deployed at a respectable return.
• Promoter holding of 51.51% aligns promoter interests with minority shareholders.
• Latest quarterly sales of ₹175 Cr reflect meaningful scale in operations.
• Debt/equity of 0.90 is elevated but not extreme for a textile business.

Concerns

• P/E of 25.37 with profit growth of -3.37% means paying a growth multiple for falling earnings.
• P/B of 5.60 against book value of ₹5.31 offers no asset cushion.
• Latest quarter net margin is razor-thin at about 2.9% (₹5 Cr profit on ₹175 Cr sales).
• Piotroski F-score of 4/9 and FairStock Score of 31/100 signal weak financial health.

AI Analysis

At ₹29.73, United Polyfab is asking me to pay 25.37 times trailing earnings and 5.60 times book value, while the book value is only ₹5.31 per share. That is not the kind of margin of safety Graham emphasized. For a textile producer, a commodity business with limited pricing power, I need a discount, not a premium. Sales growth of 14.91% looks encouraging, but profit fell 3.37%—so growth is not reaching the bottom line. In the latest quarter, ₹175 Cr of sales produced just ₹5 Cr of net profit, a net margin of less than 3%. Any cost pressure or order disruption could wipe that out. Debt/equity at 0.90 is manageable but not conservative; in a cyclical industry, debt while earnings decline is dangerous. ROCE of 15.11% tells me existing capital earns a decent return, but it is hardly an exceptional franchise. With a dividend yield of zero, I receive no compensation while waiting, and the Piotroski score of 4 out of 9 raises further doubts about financial strength. The promoter holding of 51.51% is a positive, but ownership alone does not create value at an inflated price. I do not see an economic moat: textiles are intensely competitive, margins are thin, and the company has no pricing power. At 25 times earnings with profit falling, you are paying growth rates that are not happening. The stock is down from its 52-week high of ₹51.16, but cheaper than it was is not the same as cheap. I would put this in the 'too hard' pile until I see margin stability, lower debt, and a price closer to intrinsic value. Today, there is no margin of safety.

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