Gujarat Kidney (GKSL)
Fast GrowerFairStock Score: 41/100 — MIXED
Score breakdown: P/E: 0/3 · ROCE: 2/2 · Growth: 2/2 · Dividend: 0/1
Key Financials
| Current Price | ₹136.43 |
| Market Cap | ₹1,075.66 Cr |
| P/E Ratio | 54.57 |
| ROCE | 51.52% |
| ROE | 11.93% |
| Dividend Yield | 0% |
| Profit Growth | 224% |
| Debt/Equity | 0.11 |
| Sales Growth | 212.6% |
| Promoter Holding | 71.45% |
| 52-Week Range | ₹98.36 — ₹180.5 |
| Sector | Healthcare Services |
| Book Value | ₹4.56 |
Strengths
- ROCE of 51.52% indicates exceptional returns on capital employed.
- Sales growth of 97.20% shows rapid business expansion.
- Promoter holding of 71.45% strongly aligns management interests.
- Piotroski F-score of 7/9 points to solid overall financial health.
Concerns
- P/E of 91.03 and P/B of 24.62 leave virtually no margin of safety.
- Profit growth of 17.60% lags far behind sales growth, suggesting margin pressure.
- No dividend yield; total returns depend entirely on speculative capital gains.
- PEG of 1.59 implies the current growth rate is insufficient to justify the valuation.
AI Analysis
When I first glance at Gujarat Kidney, the numbers immediately put me on guard. A price of ₹112.25, against a book value of just ₹4.56, means I am asked to pay over 24 times net assets for this hospital. The market cap of ₹897 Cr, with latest quarterly sales of ₹23 Cr and net profit of ₹4 Cr, translates to a staggering earnings multiple of 91 times. Even a superb ROCE of 51.52% cannot justify such a price unless growth continues at an extraordinary pace for many years. Yes, the top line is growing – sales up 97.20% – but the bottom line only rose 17.60%. That gap bothers me. A business that grows revenue at roughly double hundred percent while profits lag that much suggests intense competition, rising operating costs, or an acquisition that hasn’t yet translated to shareholder earnings. As Graham taught, price is what you pay and value is what you get. Here, the value I can see is thin. The promoter holding of 71.45% is reassuring, and the Piotroski F-score of 7 out of 9 hints at decent financial health. But no dividend, a PEG of 1.59, and a FairStock score of 40/100 reinforce my caution. I want a margin of safety. At 91 times earnings, I see little room for error. If growth falters, the fall could be painful. I would rather miss an opportunity than lose capital. For now, this is a fine company, but a poor investment at this price.
Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer