Vertoz (VERTOZ)

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

Key Financials

Strengths

• Debt/Equity of 0.08 indicates a very conservative balance sheet
• Promoter holding of 64.74% aligns management interests with minority shareholders
• Sales growth of 13.93% shows the business is still expanding
• ROCE of 14.68% is respectable given the low leverage

Concerns

• Profit growth declined 15.78%, showing significant margin pressure
• Piotroski F-Score of 4/9 points to weak fundamental health
• P/E of 15.55 with falling earnings is not a convincing margin of safety
• No dividend yield of 0.00% means all returns depend on uncertain price appreciation

AI Analysis

At ₹51.70, Vertoz is a small-cap ad-tech/media agency with a market cap of ₹408 Cr. Let me first apply Graham's safety test. Debt/equity is 0.08, so the balance sheet is clean; promoters own 64.74%, which aligns interests. But low debt alone is not enough to make me a buyer. This is a competitive, low-moat business — advertisers can switch agencies and platforms easily. Sales grew 13.93%, yet profit fell 15.78%. That tells me margins are under pressure. In the latest quarter, ₹75 Cr in sales produced only ₹6 Cr in profit, roughly an 8% net margin. The P/E of 15.55 looks moderate until you remember earnings are declining; a falling 'E' makes a fixed P/E more expensive with time. The Piotroski F-Score of 4/9 also raises red flags about financial strength beyond the low debt. Book value is ₹28.69; at ₹51.70, the market pays 1.8 times book. For a commodity-like agency, I want a margin of safety, not a premium. The PEG of 1.12 is meaningless here because it uses sales growth while the actual profit growth is negative. With no dividend yield of 0.00%, investors rely solely on price appreciation, which requires the business to turn around. ROCE of 14.68% is decent, but not exceptional. This is a cyclical agency business trading at a fair-to-slightly-rich price for deteriorating earnings. I would need either a materially lower price or clear evidence that profit margins have stabilized before looking further. There is no durable moat, so I will keep this on the sidelines.

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