GMR Urban (GMRP&UI)

FairStock Score: 39/100 — MIXED

Score breakdown: P/E: 0/3 · ROCE: 1/2 · Growth: 0/2 · Dividend: 0/1

Key Financials

Strengths

• Revenue growth of 16% shows the business is expanding at the top line.
• ROCE of 13.18% suggests some underlying operational efficiency before the impact of heavy leverage.
• Promoter holding at 46.28% aligns owners' interests with public shareholders.
• Latest quarter sales of ₹1,869 Cr indicate meaningful scale in the power generation business.

Concerns

• Debt-to-equity of 7.31 is dangerously high and leaves no cushion against downturns.
• Net loss of ₹160 Cr in the latest quarter and profit growth of -43.85% show the bottom line is deteriorating despite sales growth.
• P/B of 4.84 for an ROE of 4.52% is a rich valuation that fails Graham's margin of safety test.
• Piotroski F-score of 4/9 and zero dividend signal weak financial fundamentals.

AI Analysis

Let me start with what I understand: a business must earn more than its cost of capital, and the price must leave a margin of safety. GMR Urban fails both tests today. The company has a debt-to-equity ratio of 7.31, which would keep me up at night. Sales grew 16% to ₹1,869 Cr in the latest quarter, but that revenue is not reaching the bottom line — the quarter showed a net loss of ₹160 Cr, and profit growth is down nearly 44%. With a P/E of 0.00, the market cannot assign a meaningful earnings multiple because earnings are absent. Instead, I am asked to pay ₹108.35 per share, or 4.84 times book value of ₹22.40, for a business earning only 4.52% on equity. That is a poor trade: a high premium for mediocre returns. The 13.18% ROCE hints at some underlying operating efficiency, but leverage of 7.31 magnifies every mistake and leaves little room for error. Promoter holding of 46.28% is reassuring, but it does not compensate for a Piotroski F-score of 4 out of 9 and zero dividend. Over time, a company with 16% sales growth can create value — but only if the debt is serviced, profits return, and capital is allocated wisely. In this case, the latest quarter is still bleeding. Benjamin Graham would say price is what you pay, value is what you get. Here I am being asked to pay a rich price for an asset that is not yet earning. I would wait on the sidelines until the balance sheet heals and positive earnings reappear. No margin of safety, no investment.

Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer