Universal Cables (UNIVCABLES)

FairStock Score: 47/100 — MIXED

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

Key Financials

Strengths

• Sales growth of 26.40% and profit growth of 71.76% show strong recent momentum.
• PEG of 0.31 and P/E of 15.31 suggest the market hasn't fully priced in growth.
• Piotroski F-Score of 7/9 points to solid financial fundamentals.
• Promoter holding of 61.89% aligns majority owners with minority shareholders.
• Debt/equity of 0.54 is reasonable for a capital-intensive cable maker.

Concerns

• ROE of 11.59% and ROCE of 8.58% are mediocre, below what I'd want from a quality compounder.
• Latest quarter net margin of roughly 3.5% (₹27 Cr profit on ₹768 Cr sales) is thin and vulnerable to cost shocks.
• Cable demand is cyclical; the stock trades about 54% below its 52-week high of ₹1,774.90.
• Dividend yield of 0.58% offers negligible income support to shareholders.

AI Analysis

Let me look at Universal Cables as a business first. It earns a P/E of 15.31, against a 71.76% profit growth and 26.40% sales growth. That gives a PEG of 0.31, which would catch any Graham-style investor's eye. But I have to be careful. The cable business is essentially a processing industry—copper and aluminum pass through, with thin margins. The latest quarter's net profit of ₹27 Cr on sales of ₹768 Cr is a net margin of about 3.5%. That is not a wonderful business. ROE is 11.59%, and ROCE is only 8.58%, both below the thresholds I'd like for a compounding machine. The balance sheet is manageable—debt/equity of 0.54—and the Piotroski F-Score of 7/9 suggests financial health is improving. Promoters hold 61.89%, aligning their interests with mine. But the stock is trading at ₹811 versus a 52-week high of ₹1,774.90. That tells me earnings can be cyclical, and the market's mood can swing wildly. The FairStock Score of 50/100 also says mixed. I'd call this a fast grower with cyclical undertones. At ₹2,411 Cr market cap, I'm paying about 15 times earnings. If the growth continues, the price is not demanding; if the cycle turns and margins compress, a 3.5% net margin leaves little room for error. The 0.58% dividend yield doesn't pay me to wait. So I would want to see several more quarters of sales growth, stable raw material costs, and a rising ROCE before treating this as a core holding. It's a candidate, not a certainty.

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