Zuari Industries (ZUARIIND)

FairStock Score: 45/100 — MIXED

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

Key Financials

Strengths

• Deep value: P/B of 0.22 means the stock trades at a huge discount to book value of ₹1,246.75 per share.
• Low headline valuation: P/E of 6.00 and PEG of 0.40 suggest cheapness if recent profit growth is sustainable.
• Piotroski F-Score of 7/9 indicates a reasonably healthy financial position.
• Promoter holding of 56.71% aligns promoter incentives with minority shareholders.
• Sales growth of 11.73% and moderate debt/equity of 0.50 provide some operating and balance-sheet stability.

Concerns

• Latest quarter is loss-making: net profit of -₹26 Cr on sales of ₹263 Cr.
• Extremely low profitability: ROE of 0.09% and ROCE of 2.82% show the asset base is not generating attractive returns.
• Dividend yield of only 0.38% means little income while waiting for value to be realized.
• FairStock Score of 38/100 signals mixed fundamentals and possible risks beneath the deep-value look.

AI Analysis

Benjamin Graham taught me to focus on margin of safety, and Zuari Industries offers one on the balance sheet. At ₹273.75, the market cap is just ₹784 Cr, while the book value is ₹1,246.75 per share. A P/B of 0.22 means I am paying twenty-two paise for every rupee of book assets. That discount is tempting, but I must ask whether the assets are earning anything. The answer is troubling: ROE is 0.09% and ROCE is 2.82%. The latest quarter shows a net loss of ₹26 Cr on sales of ₹263 Cr. In a cyclical sugar business, low P/E ratios can be dangerous when the next down-cycle wipes out profits. A P/E of 6.00 looks cheap, but if the quarterly loss continues, today's cheap can become tomorrow's value trap. Still, there are genuine positives. Sales are growing at 11.73%, and trailing profit growth is 17.99%, giving a PEG of 0.40. The Piotroski F-Score of 7/9 suggests the financial position is reasonably healthy, and debt/equity of 0.50 is not alarming. Promoters own 56.71%, so their interests are aligned with mine. But the dividend yield of 0.38% means I am not being paid to wait. I would need to see this asset base generate a real return. If management can convert the topline growth into bottom-line profits, the huge discount to book could close. If not, the low valuation may simply reflect low-quality assets or a lost franchise. My approach is to keep it on the watchlist and demand evidence of improving ROCE before committing meaningful capital. The price is interesting; the business quality is not yet proven.

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