Godrej Industrie (GODREJIND)

FairStock Score: 18/100 — RISKY

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

Key Financials

Strengths

• Five-year revenue CAGR of 16.06% shows strong top-line growth.
• Latest quarter sales of ₹5,051 Cr and net profit of ₹353 Cr indicate meaningful scale and reported profitability.
• Promoter holding of 74.64% aligns promoter interests with minority shareholders.
• Piotroski F-Score of 7/9 suggests relatively sound operating metrics despite other red flags.

Concerns

• Negative free cash flow of ₹9,713 Cr is a serious red flag; profits are not converting into cash.
• Debt/Equity of 4.48 and Altman Z-Score of 0.64 indicate high financial stress.
• Valuation has no margin of safety: P/E of 33.24, P/B of 3.30, price ~124% above Graham Number of ₹444.08.
• ROE of 9.65% and ROCE of 7.83% are weak returns, while EV/EBITDA of 1,479.19 looks extreme; dividend yield is zero.

AI Analysis

Looking at Godrej Industries, I have to remind myself that a rising stock price doesn't make a great business. The shares trade at ₹996, or 33.24 times trailing earnings and 3.30 times book value. For that price, I get a business earning only 9.65% on equity and 7.83% on capital employed. Those are mediocre returns, not the hallmark of a franchise with a durable moat. In Graham's terms, price is what you pay and value is what you get; here, the Graham Number is ₹444.08, meaning I am paying over 124% above the conservative benchmark and there is no margin of safety. The balance sheet worries me most. Debt-to-equity is 4.48, and free cash flow is ₹9,713 crore negative. Even with a reported 101.30% profit growth, cash is clearly not being generated. The PEG of 0.73 is only attractive if that profit growth rate is durable, and I do not see evidence of that yet. Altman Z-Score of 0.64 signals potential financial stress, and EV/EBITDA at 1,479.19 is almost impossible to justify. The promoter holding of 74.64% is the one structural comfort; at least owners are aligned. The five-year revenue CAGR of 16.06% shows real expansion, and latest quarter sales of ₹5,051 crore with net profit of ₹353 crore demonstrate scale. But a zero dividend yield and negative free cash flow mean this is a capital-hungry enterprise dependent on external financing. The Piotroski F-Score of 7/9 is decent, yet it cannot override leverage, a FairStock Score of 18/100, and an expensive share price. I am not interested in a high-priced, debt-fueled grower. If the business ever converts profits into cash, lowers debt, and proves the 101% profit growth is repeatable, I will examine it again. For now, this remains outside my margin of safety. I pass.

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