Indiabulls (IBULLSLTD)

FairStock Score: 16/100 — RISKY

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

Key Financials

Strengths

• Latest quarterly net profit of ₹78 Cr on revenue of ₹97 Cr points to a sharp earnings recovery, even if margins are unusually high.
• Sales decline of 8.90% is moderate, and the company remains a going concern with quarterly sales of ₹97 Cr.
• Reported debt/equity of 0.18 is low, suggesting no immediate solvency stress from borrowings.
• Stock trades at ₹17.10, down from the 52-week high of ₹32.50, with early signs of a turnaround after the ₹8.90 low.

Concerns

• Book value is negative at ₹-28.01 per share; shareholder equity has been wiped out, leaving no margin of safety.
• Trailing P/E of 84.63 is very high, while ROCE is 0.00% and sales are shrinking, so operational returns are poor.
• ROE of 283.71% and profit growth of 1000% are distortionary—they come from a tiny or negative base and likely one-off gains, not durable economics.
• F-Score of 5/9, no dividend, and promoter holding of only 32.89% add governance and quality doubts.

AI Analysis

Let me start with what every Graham disciple checks first: the balance sheet. Indiabulls has a book value of negative ₹28 per share. That means the equity cushion is gone; shareholders are technically behind the creditors. A negative book value is a red flag no amount of headline profit growth can wash away. The reported ROE of 283.71% is not a sign of quality—it is a mathematical artifact of a negative denominator. ROCE is 0.00%, so operations are not earning an attractive return on capital employed. With P/E of 84.63, the market is paying a rich price for a business whose sales fell 8.90%. The profit growth of 1000% sounds spectacular, but it starts from a tiny base, and the latest quarter's net profit of ₹78 crore on sales of ₹97 crore implies an 80% margin—extraordinary and likely non-recurring. I do not trust such margins; in a competitive services business, they almost never last. The Piotroski F-Score is 5 out of 9, mediocre, and the so-called PEG of 0.08 is a mirage because it assumes the unsustainable 1000% growth continues. Promoter holding is 32.89%, not compelling. No dividend means the investor must rely solely on price appreciation, but with negative book value, falling revenue, and zero return on capital, there is no margin of safety. This looks more like a speculative turnaround situation than an investment. I would need many quarters of actual cash profits, a repaired balance sheet, and evidence of pricing power before I could take interest. Until then, I pass.

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