Wakefit Innovati (WAKEFIT)

FairStock Score: 21/100 — RISKY

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

Key Financials

Strengths

• Latest quarter showed near-term profitability: ₹421 Cr sales and ₹32 Cr net profit.
• Debt/equity of 0.50 is manageable, not overly leveraged.
• Sales growth of 9.39% shows the business is still expanding.
• Piotroski F-Score of 6/9 suggests some fundamental improvement signals.

Concerns

• P/E of 0.00 means trailing earnings are effectively nil, making valuation unreliable.
• ROCE of -1.53% indicates the company is not earning its cost of capital.
• P/B of 4.21 is rich for a business with negative returns.
• Promoter holding at 37.39% is low, and there is zero dividend yield.

AI Analysis

At ₹143.85, Wakefit has a market cap of ₹6,106 Cr. I have to begin by admitting I cannot value it with my usual tools: the P/E is 0.00, meaning trailing earnings are effectively nil. Graham taught me to be most careful where a story is required, and this is such a case. The latest quarter looks encouraging—₹421 Cr of sales and ₹32 Cr of net profit gives a healthy-looking margin—but one quarter is not a record, and profit growth of 1,000% only sounds large because the previous base was tiny. In furniture and home furnishing, I see little to indicate a durable competitive moat. The return on capital employed of -1.53% is the clearest warning: this company is not earning its cost of capital, even after that good quarter. A price-to-book ratio of 4.21 for a business with negative returns is not a margin of safety; it is a premium for hopes. Sales growth of 9.39% is decent but not spectacular. The balance sheet is manageable—debt/equity of 0.50—and the Piotroski score of 6/9 is mildly positive. However, promoter holding of only 37.39% is lower than I like, and there is no dividend. The FairStock score of 9/100 labels it risky, and I agree. Trading near the lower end of its 52-week range makes it look less frothy than at ₹224, but a falling price is not automatically cheap. I need evidence that capital employed can earn acceptable returns across multiple quarters before I would accept the business risk. This may well be a turnaround; it is not yet a proven compounder. I will watch from the sidelines until the numbers, not the story, convince me.

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