Zodiac Energy (ZODIAC)
CyclicalScore breakdown: P/E: 2/3 · ROCE: 1/2 · Growth: 0/2 · Dividend: 0/1
Key Financials
| Current Price | ₹266.9 |
| Market Cap | ₹368.64 Cr |
| P/E Ratio | 71.55 |
| ROCE | 20.02% |
| ROE | 24.49% |
| Dividend Yield | 0.31% |
| Profit Growth | 157.1% |
| Debt/Equity | 2.05 |
| Sales Growth | 46.1% |
| Promoter Holding | 69.91% |
| 52-Week Range | ₹205.55 — ₹415 |
| Sector | Construction |
| Book Value | ₹77.27 |
Strengths
- Promoter holding at 69.91% aligns management with minority shareholders
- Return on equity of 24.49% and ROCE of 20.02% show efficient capital deployment
- Sales growth of 31.85% indicates strong demand and scaling
- Latest quarter sales of ₹138 Cr show the business is generating meaningful revenue
- PEG of 0.58 suggests attractive growth-adjusted valuation if profit growth revives
Concerns
- Net profit fell 11.21% despite sales growth, with latest quarter net margin only ~3.6%
- Debt/equity of 1.78 reflects a leveraged balance sheet
- Piotroski F-Score of 4/9 points to weak fundamental health
- P/B of 6.65 and dividend yield of 0.31% leave little margin of safety
AI Analysis
Let me start by saying what I like. Zodiac Energy has grown sales by nearly 32% and earns a return on equity of 24.49%, with ROCE at 20.02%. In civil construction, that is not easy. Promoters hold 69.91%, so interests are aligned. But I must slow down. The price-to-book of 6.65 and P/E of 18.54 are not cheap for a construction business that just saw profit fall 11.21% even as sales rose. Latest quarter net profit of ₹5 Cr on ₹138 Cr sales implies a thin margin of about 3.6%. Graham would ask: where is the margin of safety? I see debt/equity at 1.78, which is high. The Piotroski score of 4 out of 9 tells me financial health is deteriorating, not improving. Dividend yield of only 0.31% gives me almost nothing while I wait. A PEG of 0.58 looks tempting, but with negative profit growth, any historical earnings growth in that ratio is misleading. This is a cyclical business. Construction can boom for a while, then working capital and margins get squeezed. I would want to see full-year cash flow, lower debt, and margin stabilisation before committing. If Zodiac can turn its 31.85% sales growth into real profit growth and bring debt down, the high ROE makes it worth watching. At ₹355.83 and market cap of ₹369 Cr, the market is paying up for past strength, not the latest quarter. Price is what you pay; value is what you get. Today, I do not get enough value to act. I will keep it on my watchlist, not in my portfolio.
Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer