Check Before You Invest : Aroma Enterprises (India) Ltd

BSE: 531560 NSE: ISIN: INE371M01012

| Sector: BFSI | Industry: Finance - Investment

Snapshot

Q.1 Which industry/sub-sector does Aroma Enterprises (India) Ltd belong to?

Aroma Enterprises (India) Ltd belongs to the BFSI sector, operating specifically within the Finance - Investment segment.

Q.2 Is Aroma Enterprises (India) Ltd a good quality company?

Aroma Enterprises (India) Ltd is a quality company, based on a 6-year financial track record.

Q.3 Is Aroma Enterprises (India) Ltd undervalued or overvalued?

Aroma Enterprises (India) Ltd appears Undervalued, as its key valuation ratios are below with their past averages.

Q.4 Is Aroma Enterprises (India) Ltd a good buy now?

Aroma Enterprises (India) Ltd is not a good buy now, based on weak price trend analysis suggesting prices may fall. However, you need to check its quality and valuation before making a decision

Performance Analysis

Q.1 Total Income growth of Aroma Enterprises (India) Ltd?

Aroma Enterprises (India) Ltd Operating Income growth is NA% for FY-2023, which is above its 5-year CAGR of -100%, indicating faster growth.

Q.2 Return on Assets of Aroma Enterprises (India) Ltd?

Aroma Enterprises (India) Ltd Return on Asset is -1%, which is in line with its 5-year historical median of -1%, indicating stable earnings on assets.

	Current Level	5-year Historic Median
NPM%	-	0.45
PPOP%	-56.72	-84.07
RoA%	-1	-1

Q.3 Return on Equity (ROE) of Aroma Enterprises (India) Ltd?

Aroma Enterprises (India) Ltd Return on Equity is 0% for FY-2023, which is below its 5-year historical median of 4%, indicating the business is making worse use of its shareholders capital.

Q.4 Pre-provisioning operating profit margin of Aroma Enterprises (India) Ltd?

Aroma Enterprises (India) Ltd Pre-provisioning operating profit margin, which is the bank’s core operating profit before provisioning for bad loans, is -56.72% for FY-2023, which is above its 5-year median(-84.07%), indicating increasing margins.

Q.5 Net Profit Margin of Aroma Enterprises (India) Ltd?

Aroma Enterprises (India) Ltd Net Profit Margin, which is the difference between the rate of interest earned on assets and the rate of interest paid on liabilities, is 0% for FY-2023, which is below its 5-year median( 0.45%), indicating decreasing margins.

Q.6 Total Asset growth of Aroma Enterprises (India) Ltd?

Aroma Enterprises (India) Ltd Total Asset growth is -9.61% for FY-2023, which is below its 5-year CAGR of 9.45%, indicating slower growth.

Ownership & governance

Q.1 Promoter shareholding and pledge status of Aroma Enterprises (India) Ltd?

Promoters hold 69.19% of the Aroma Enterprises (India) Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

Q.1 AUM Growth of Aroma Enterprises (India) Ltd vs Industry Peers?

Aroma Enterprises (India) Ltd AUM CAGR is 9.45%, compared to the 5-year industry median CAGR of 9.45%, indicating stable growth and maintaining its market share.

Q.2 Profit metrics (NPM, PPOP, RoA) of Aroma Enterprises (India) Ltd vs industry peers

Aroma Enterprises (India) Ltd profit metrics are below the industry median level of -0.88%, indicating weaker profitability compared to peers.

Profit Metrics

	Current Level	5-year Industry Median
NPM%	-	9.95
PPOP%	-56.72	-13.4
RoA%	-1	0.8

Q.3 Operating efficiency of Aroma Enterprises (India) Ltd vs industry peers?

Aroma Enterprises (India) Ltd ROCE (-5.8) is below the industry median of (1.9); while the current ROE (4) are above than the 5-year average Industry ROE (1.2). This shows that the business is positioned in the middle quartile of the industry.

Operating Efficiency

	Current Level	5-year Industry Median
NPM%	-	9.95
PPOP%	-56.72	-13.4
RoA%	-1	0.8
ROCE%	-5.8	1.9
ROE%	-	1.2

Valuation & price assessment

Q.1 Stock return of Aroma Enterprises (India) Ltd over the last decade?

Over the last 9 years, the stock has delivered a CAGR of 4% based on the current price.

Q.2 What return has the stock given over the last decade?

	9Y	5Y	3Y	1Y
Share Price CAGR	4%	6.6%	-1.6%	-

Q.3 How do the current valuation ratios compare with 5-year historical median and industry numbers?

Valuation Ratios	Current	5-year Historic Median	5-year Industry Median
Price to Earnings	-	32.14	33.72
Price to Book	-6.78	-6.90	0.94
Price to Sales	-	-	12.44
EV to EBITDA	-325.53	-241.83	9.97

Q.4 Valuation ratios of Aroma Enterprises (India) Ltdvs historical and industry averages?

The current Price to book ratio (P/B) -6.78% is higher than its historical median of -6.90%, indicating that at the current price the stock is overvalued. However, you need a deeper analysis to make a better judgement.

Strategic outlook

Q.1 Does its ROIC exceed its WACC?

Aroma Enterprises (India) Ltd return on invested capital (ROIC) is -5.91% for FY-2023, is lower than its estimated weighted average cost of capital (WACC) of 14%, indicating value erosion.

Check more companies

1. Cholamandalam Fin.

2. TVS Holdings

3. Capri Global Capital

4. Maharashtra Scooters

9. Religare Enterprises

10. Pilani Investment

Check trending companies

1. Force Motors Ltd.

2. KEI Industries Ltd.

3. Aadhar Housing Finance Ltd.

4. State Bank Of India

5. Power Finance Corporation Ltd.