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Check Before You Invest : Paramount Speciality Forgings Ltd

BSE: 0 NSE: PSFL ISIN: INE0Q6001012
  |   Sector:  Automobiles   |   Industry:  Forgings

Snapshot

Q.1 Which industry/sub-sector does Paramount Speciality Forgings Ltd belong to?
Paramount Speciality Forgings Ltd belongs to the Automobiles sector, operating specifically within the Forgings segment.
Q.2 Is Paramount Speciality Forgings Ltd a good quality company?
Paramount Speciality Forgings Ltd is a quality company, based on a multi-year financial track record.

This assessment is based on company’s performance on Revenue growth, ROCE, Equity and Assets, key margin ratios, cash conversion cycle, and debt to cash flow from operations and how it compares with its long term averages.

Q.3 Is Paramount Speciality Forgings Ltd undervalued or overvalued?
Paramount Speciality Forgings Ltd appears Fair, as its key valuation ratios are in line with their past averages.

Based on the industry it operates in, the relevant valuation ratios include one of the following, P/E, P/BV, P/Sales, EV/EBITDA or a combination of two or more.

Valuation Ratios Current 0-year
Historic Median
Price to Earnings 14.15 66.44
Price to Book 1.22 8.20
Price to Sales 0.57 10.36
EV to EBITDA 7.62 41.83
Q.4 Is Paramount Speciality Forgings Ltd a good buy now?
Paramount Speciality Forgings 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

We have analysed the performance of the company on the following:

  • How has it performed on generating Profits?

    By checking its Revenue growth, Gross, Operating and Net Margins compared to its last 5-year median.

  • How efficiently has it utilized Capital?

    By checking its ROCE, ROA, ROE and its Cash Conversion Cycle.

  • How is it managing its Debt?

    By checking its Debt to Equity and Cash Flow from Operations.

C: How much debt does the business have and is it at a sustainable level?

Q.1 Debt to Equity ratio of Paramount Speciality Forgings Ltd?
Paramount Speciality Forgings Ltd Debt-to-Equity ratio is 0.56, which is above the industry average of , indicating higher debt levels in the industry.

Q.2 Debt to cash flow from operations of Paramount Speciality Forgings Ltd?
Paramount Speciality Forgings Ltd Debt to cash flow from operations is -10.18, which is at a unhealthy level.

Ownership & governance

D: Promoter shareholding and pledge status of Paramount Speciality Forgings Ltd?

Q.1 Promoter shareholding and pledge status of Paramount Speciality Forgings Ltd?
Promoters hold 72.29% of the Paramount Speciality Forgings Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

E: How does Paramount Speciality Forgings Ltd performance compare with that of its Peers?

Q.1 Revenue growth of Paramount Speciality Forgings Ltd vs industry peers?
Paramount Speciality Forgings Ltd revenue CAGR is %, compared to the industry median CAGR of 3.03%, indicating slower growth and losing its market share.
Profit Metrics
Current Level 0-year
Industry Median
Revenue Growth (%) - 3
Gross Profit Growth (%) -37.7 16
Operating Profit Growth (%) -34.5 19.2
Net Profit Growth (%) -17.2 16.2
Operating Efficiency
Current Level 0-year
Industry Median
Asset Turnover (x) 1.04 0.79
ROE (%) - 7.33
ROCE (%) - 9.29
Cash Conversion Cycle (days) 99.48 121

Valuation & price assessment

Q.1 Stock return of Paramount Speciality Forgings Ltd over the last decade?
Over the last 1 year(s), the stock has delivered a CAGR of -32.42% based on the current price.
9Y 5Y 3Y 1Y
Share Price
CAGR
- - - -32.4%
Q.2 Valuation ratios of Paramount Speciality Forgings Ltd vs historical?
The current P/E ratio of 14.15 is lower than its historical median of 66.44, indicating that the stock is trading below its historical average valuation.
Q.3 How do the current valuation ratios compare with 0-year historical median and industry numbers?
Valuation Ratios Current 0-year
Historic Median
0-year
Industry Median
Price to Earnings 14.15 66.44 -
Price to Book 1.22 8.20 -
Price to Sales 0.57 10.36 -
EV to EBITDA 7.62 41.83 -

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