Vikran Engg. (VIKRAN)

FairStock Score: 36/100 — MIXED

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

Key Financials

Strengths

• Low leverage with debt/equity of 0.27
• Strong operating return with ROCE of 27.15%
• Promoter holding of 56.17% aligns management with minority shareholders
• Latest quarter remains profitable with ₹21 Cr net profit on ₹266 Cr sales

Concerns

• Sales growth is flat at 0.48% while profit growth has fallen 35.48%
• P/E of 23.77 with a PEG of 49.52 is expensive for nearly no growth
• Piotroski F-score of 4/9 signals weak financial health
• Zero dividend yield gives shareholders no cash return while waiting

AI Analysis

Vikran Engg. is a civil construction business, and I instinctively keep my wallet away from commodity-like construction. The recent quarter shows sales of ₹266 Cr and net profit of ₹21 Cr, but the bigger picture is troubling: sales growth is barely 0.48% and profit growth has collapsed by 35.48%. In Warren Buffett's language, why pay a P/E of 23.77 for a company with no growth? The PEG ratio of 49.52 is absurd. It has no dividend yield, so the shareholder waits for appreciation alone. Graham would ask for a margin of safety. At ₹72.47, the shares are 1.3 times book value of ₹55.87—not deeply undervalued. There are some positive signs: debt/equity is low at 0.27, ROCE is excellent at 27.15%, and promoter holding is a solid 56.17%. These are real, but they don't make a durable moat. Civil construction firms face intense competition and cyclical demand; a high ROCE can fade quickly. The Piotroski F-score of 4/9 is weak, suggesting financial quality is below investment grade. The FairStock score of 19/100 labels the stock risky. From the 52-week high of ₹118.40, the price has fallen to ₹72.47, but a falling price alone doesn't make a bargain. Profit has fallen more than a third, sales are flat, and yet the market still wants 23 times earnings. I cannot call this a great business at a fair price. It is more like a cyclical business at an uncertain price. I would keep this on a watchlist, not in the portfolio. Wait for evidence that earnings have stabilised, returns are sustainable, and the price offers a clear margin of safety. Until then, I would pass.

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