The Piotroski Score is a financial metric used to assess a company’s financial health by assigning a score based on nine criteria. Developed by Professor Joseph Piotroski, this score helps investors evaluate whether a company’s financial situation is improving or declining.
The criteria include factors such as profitability (positive net income and return on assets), cash flow (positive operating cash flow and cash flow exceeding net income), debt management (reduction in long-term debt), liquidity (increase in the current ratio), equity issuance (no new shares issued), and operational efficiency (increase in gross margin and asset turnover).
Each of these factors is assigned one point, and the total score ranges from 0 to 9. A higher score (7-9) indicates a financially strong company, while a lower score (0-3) suggests potential weaknesses.
List of stocks to watch out for:
GE Vernova T&D India Ltd
GE Vernova T&D India Ltd. is a leading player in the transmission and distribution (T&D) sector, specializing in providing solutions for power generation, transmission, and distribution. The company offers advanced technologies and services in energy-efficient power systems, grid management, and renewable energy integration. With a global presence, it focuses on helping utilities improve grid reliability and efficiency.
With a market capitalization of Rs. 76,915 crores, the company has a high Piotroski score of 9, with an ROCE of 54.7 percent and ROE of 40.4 percent, along with a debt-to-equity ratio of 0.02, showcasing strong overall financial performance metrics.
National Aluminium Company Ltd (NALCO)
National Aluminium Company Ltd (NALCO) is a public sector enterprise and one of the largest producers of aluminium in India. The company is involved in the mining of bauxite, refining it to produce alumina, and further smelting it into aluminium. NALCO has a diverse product range, including ingots, billets, and sheets, which cater to various industries such as automotive, construction, and electrical.
With a market capitalization of Rs. 41,250 crores, the company has a high Piotroski score of 9, with an ROCE of 44.0 percent and ROE of 32.7 percent, along with a debt-to-equity ratio of 0.01, showcasing strong overall financial performance metrics.
Multi-Commodity Exchange of India Ltd (MCX)
Multi Commodity Exchange of India Ltd (MCX) is India’s largest commodity exchange, providing a platform for trading in a wide range of commodities such as bullion, metals, energy, and agricultural products. MCX offers futures and options contracts that help businesses and traders manage price risks. It is a key player in the financial markets, contributing to price discovery and hedging in the commodities sector.
With a market capitalization of Rs. 44,287 crores, the company has a high Piotroski score of 9, with an ROCE of 42.9 percent and ROE of 34.3 percent, along with a debt-to-equity ratio of 0, showcasing strong overall financial performance metrics.
KPIT Technologies Ltd
KPIT Technologies Ltd. is a global technology company specializing in providing IT services and solutions to industries such as automotive, manufacturing, and energy. The company focuses on software development, engineering solutions, and digital transformation for businesses looking to innovate and optimize their operations. KPIT’s expertise lies in embedded systems, autonomous driving, and connected vehicles.
With a market capitalization of Rs. 31,668 crores, the company has a high Piotroski score of 9, with an ROCE of 40.9 percent and ROE of 33.2 percent, along with a debt-to-equity ratio of 0.12, showcasing strong overall financial performance metrics.
Written by Sridhar J
Disclaimer
The views and investment tips expressed by investment experts/broking houses/rating agencies on tradebrains.in are their own, and not that of the website or its management. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution while investing or trading in stocks. Trade Brains Technologies Private Limited or the author are not liable for any losses caused as a result of the decision based on this article. Please consult your investment advisor before investing.
