IRB Infra.Devl. (IRB)

FairStock Score: 45/100 — MIXED

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

Key Financials

Strengths

• Trades at 0.67 times book value; book value is ₹32.83 against price of ₹22.15
• Below Graham Number of ₹30.75, offering a possible Graham-style discount
• Positive free cash flow of ₹2,346 crore despite weak earnings
• Piotroski F-Score of 6/9 suggests moderate financial stability
• Latest quarter net profit of ₹211 crore on sales of ₹1,871 crore shows some operating pulse

Concerns

• Profit growth collapsed by 88.09% with ROE of only 3.88% and ROCE of 7.82%
• Altman Z-Score of 1.03 indicates financial distress risk
• EV/EBITDA of 347.84 is extreme, and DCF intrinsic value of ₹8.83 is far below the market price
• FairStock Score of 32/100 and promoter holding of 30.42% add governance and risk concerns

AI Analysis

At ₹22.15, IRB is not the sort of business I would normally gravitate toward. The economics are poor: return on equity is just 3.88%, return on capital employed is 7.82%, and profit growth has collapsed 88.09%. A civil construction and infrastructure player must earn healthy returns on huge capital; this one does not. The latest quarter shows a net profit of ₹211 crore on sales of ₹1,871 crore, but that does not undo a year of destruction. Sales growth is pedestrian—4.58%, with a five-year revenue CAGR of 7.52%—so this is not a fast-growing franchise. The balance sheet is not clean either: debt-to-equity is 1.02, Altman Z-Score is 1.03, putting it in distress territory, and EV/EBITDA of 347.84 tells you the market is paying an enormous multiple for depressed earnings. At the same time, there are value signals. The share trades at 0.67 times book value of ₹32.83, and below the Graham Number of ₹30.75. Free cash flow is positive at ₹2,346 crore, and the Piotroski F-Score of 6/9 shows basic financial health. Yet the given DCF intrinsic value of ₹8.83 and negative margin of safety of -35.64% make me wary. Buying a mediocre asset simply because it is cheap is a value trap, not value investing. I would not call this a stalwart or a grower; it is an asset play with a turnaround possibility. I need evidence of improving returns on capital and a stronger balance sheet before I commit.

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