Zuari Agro Chem. (ZUARI)
CyclicalFairStock Score: 41/100 — MIXED
Score breakdown: P/E: 3/3 · ROCE: 1/2 · Growth: 0/2 · Dividend: 0/1
Key Financials
| Current Price | ₹220.58 |
| Market Cap | ₹927.72 Cr |
| P/E Ratio | 0.99 |
| ROCE | 12.71% |
| ROE | 41.93% |
| Dividend Yield | 0% |
| Profit Growth | 11.37% |
| Debt/Equity | 0.31 |
| Sales Growth | -91.06% |
| Promoter Holding | 65.21% |
| 52-Week Range | ₹175.1 — ₹345.6 |
| Sector | Fertilizers & Agrochemicals |
| Book Value | ₹43.65 |
Strengths
- Low P/E of 2.84 with positive latest-quarter net profit of ₹40 Cr on ₹344 Cr sales.
- Low debt/equity of 0.24 provides balance-sheet cushion.
- Promoter holding of 65.21% aligns owner and management interests.
- ROCE of 12.71% shows the underlying capital is earning a positive return.
Concerns
- Sales growth of -72.81% signals a severe business contraction.
- P/B of 5.80 versus book value of ₹43.65 means paying a high premium for a thin equity base.
- Piotroski F-Score of 3/9 and FairStock Score of 27/100 point to financial weakness and high risk.
- Zero dividend yield means shareholders must rely entirely on price appreciation.
AI Analysis
At first glance, a P/E of 2.84 and an ROE of 527.67% look like a bargain hunter's dream. But Ben Graham taught me to be suspicious when numbers look too good. Zuari Agro's book value is only ₹43.65 per share, so despite the low earnings multiple, I am paying 5.8 times book for a business whose sales collapsed by 72.81% and whose profits fell another 24.78%. A spectacular ROE is often the result of a shrunken equity base, not a wonderful franchise. The latest quarter shows a positive net profit of ₹40 Cr on sales of ₹344 Cr, which is encouraging, and debt/equity of 0.24 means the balance sheet is not unduly leveraged. Promoter holding of 65.21% does align owners with management. But the Piotroski F-score of 3/9 is a clear red flag; it suggests deteriorating fundamentals. Fertilizers are a cyclical business, and a 72% collapse in sales is not a sign of pricing power or a durable moat. If a genuine turnaround is underway, sales and margins need to stabilize over several quarters. With a FairStock Score of 27/100 and zero dividend yield, I am not being paid to wait. A cheap multiple can easily become a value trap when earnings power is shrinking. Mr. Market's 52-week range of ₹175 to ₹393 tells me this is a volatile, cyclical stock, not a compounding machine. I would keep it on my watchlist but demand evidence of sustained recovery before committing capital.
Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer