Ingersoll-Rand (INGERRAND)

FairStock Score: 32/100 — RISKY

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

Key Financials

Strengths

• Exceptional returns: ROE of 40.49% and ROCE of 60.02% indicate a strong, asset-efficient franchise.
• Nearly zero leverage: Debt/Equity of 0.02 gives the balance sheet strong resilience.
• Solid growth momentum: Sales grew 19.39% and profit grew 15.75%, with latest quarter revenue of ₹455 Cr and net profit of ₹72 Cr.
• Promoter holding of 75% aligns interests with minority shareholders; Piotroski F-Score of 7/9 supports financial soundness.
• Dividend yield of 2.00% provides modest shareholder return while the company reinvests at high rates.

Concerns

• Valuation is stretched: P/E of 45.68 and P/B of 21.17 leave little margin of safety for a value investor.
• PEG of 2.60 suggests the market is paying a heavy premium relative to the current profit growth rate.
• Profit growth of 15.75% is slower than sales growth of 19.39%, indicating possible margin pressure or rising costs.
• FairStock Score of 33/100 flags the stock as risky at this price level.

AI Analysis

When I look at Ingersoll-Rand, I see a genuinely fine business trapped in an expensive price. The economics are eye-catching: 40.49% ROE and 60.02% ROCE, with a debt-to-equity ratio of just 0.02. That tells me this company does not need borrowed money to generate outstanding returns. A 75% promoter holding also aligns ownership with public shareholders, and a Piotroski F-Score of 7/9 suggests the financial health is trustworthy. Growth is real too: sales are up 19.39%, profits up 15.75%, and the latest quarter shows ₹455 Cr of sales and ₹72 Cr of net profit. This is the kind of franchise a value investor admires. But Benjamin Graham taught me that no business is worth paying any price for. At ₹4,188.20, the market cap is ₹12,647 Cr, which works out to 45.68 times earnings and 21.17 times book value. Book value is just ₹197.85. You are paying ₹21 for every ₹1 of net worth, hoping the wonderful ROE continues forever. The PEG ratio of 2.60 tells me the growth is already fully priced, and more. A dividend yield of 2.00% offers some comfort, but it is not enough to compensate for valuation risk. FairStock Score of 33/100 rightly flags this as risky. If profit growth remains near 15.75%, it will take years for earnings to catch up to the multiple. A pullback from the 52-week range, or a period of stagnant growth, is what would make me interested. For now, I would admire the business from a distance. Patience is not just a virtue; it is the investor's real edge.

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