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, formerly GE T&D India Ltd, is a leading Indian company in the power transmission and distribution (T&D) sector, providing products and solutions for power infrastructure. As a subsidiary of the global GE Vernova group, it has over 100 years of experience in India and offers a range of products like transformers, switchgears, and digital grid solutions.
With a market capitalization of Rs. 74,208.69 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 0.01, showcasing strong overall financial performance metrics.
KPIT Technologies Ltd
KPIT Technologies is an Indian multinational technology company specializing in software development for the automotive and mobility sectors, with a focus on creating software-defined vehicles. The company provides embedded software, AI, and digital solutions, working with automotive OEMs and other mobility leaders to build cleaner, smarter, and safer vehicles.
With a market capitalization of Rs. 33,308.47 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 0.16, showcasing strong overall financial performance metrics.
National Aluminium Company Ltd (NALCO)
National Aluminium Company Ltd (NALCO) is a “Navratna” Central Public Sector Enterprise under India’s Ministry of Mines, established in 1981. It is a large, integrated Bauxite-Alumina-Aluminium-Power complex with operations in mining, metal, and power sectors. NALCO produces and sells a range of products including alumina and aluminum ingots, billets, and wire rods.
With a market capitalization of Rs. 48,303.42 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, showcasing strong overall financial performance metrics.
AWL Agri Business Ltd
AWL Agri Business Ltd. is a leading Indian food and FMCG company, formerly known as Adani Wilmar Limited. It operates on an integrated farm-to-fork model with a diverse portfolio including edible oils, wheat flour, rice, pulses, and sugar, sold under brands like Fortune, Kohinoor, and Tops. Beyond consumer products, the company also manufactures industrial essentials like oleochemicals and castor oil derivatives.
With a market capitalization of Rs. 34,233.53 crores, the company has a high Piotroski score of 9, with an ROCE of 13.9 percent and ROE of 20.9 percent, along with a debt-to-equity ratio of 0.11, showcasing strong overall financial performance metrics.
Multi-Commodity Exchange of India Ltd (MCX)
Multi-Commodity Exchange of India Ltd (MCX) is India’s leading commodity derivatives exchange, providing an online platform for trading commodity futures and options across segments like bullion, energy, and agriculture. Established in 2003, it operates under the regulation of the Securities and Exchange Board of India (SEBI) and is the first Indian commodity exchange to be listed.
With a market capitalization of Rs. 52,031.34 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.
Written by Sridhar J
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