Vardhman Acrylic (VARDHACRLC)

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

Key Financials

Strengths

• High promoter holding of 74.97% aligns ownership with minority shareholders.
• Dividend yield of 4.33% provides a cash return while waiting for recovery.
• P/B of 1.25 against book value of ₹28.63 limits downside if assets are sound.
• Profit growth of 86.65% and latest quarter net profit of ₹7 Cr on sales of ₹76 Cr indicate margin expansion.
• Piotroski F-score of 6/9 suggests improving financial health.

Concerns

• Sales declined 6.73%, showing weak top-line momentum.
• ROCE of only 6.68% reflects poor capital efficiency.
• P/E of 20.46 is not obviously cheap unless the earnings rebound is durable.
• Debt/equity is not disclosed, making leverage risk hard to assess.

AI Analysis

At ₹35.68, Vardhman Acrylic is a small textile player with a market cap of ₹279 crore. When I look at this, I first ask what the business earns on capital. ROCE is just 6.68%, which is not impressive. With debt/equity not reported, I cannot fully judge the balance-sheet risk. The company has a book value of ₹28.63, so the stock trades at 1.25 times book. That is reasonable but not a deep Graham bargain. The P/E of 20.46 is not cheap unless the earnings rebound is sustainable. Profit growth of 86.65% looks striking, but sales have fallen 6.73%. In acrylic/textiles, that pattern often signals a cyclical recovery rather than durable compounding. The latest quarter helps: sales ₹76 crore and net profit ₹7 crore, which suggests margins have expanded. But one quarter is not a trend. On the positive side, the 4.33% dividend yield gives me something while I wait, and promoter holding at 74.97% means owner-operators have skin in the game. The Piotroski F-score of 6/9 is a tentative signal of improving financial health, though not a strong moat. I cannot call this a wonderful business. The lack of pricing power, modest returns on capital, and falling sales are concerns. But at near book value with a high dividend and an earnings recovery underway, it may be an adequate, unexciting investment. I would need to see sustained quarterly improvement, stable margins, and clearer debt disclosure before treating this as a high-conviction holding. For now, it belongs in the cyclical/value bucket, not in the 'great company' basket.

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