Reliance Infra. (RELINFRA)

FairStock Score: 30/100 — RISKY

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

Key Financials

Strengths

• Shares trade at just 0.23x book value, offering potential margin of safety if reported assets are real.
• Reported ROE of 44.14% and ROCE of 34.01% indicate strong capital efficiency on paper.
• Free cash flow is positive at ₹1,925 Cr and debt/equity is moderate at 0.44.
• Piotroski F-Score of 7/9 suggests recent improvement in financial health.
• Market cap of ₹3,693 Cr is far below stated book value of roughly ₹15,700 Cr.

Concerns

• Sales growth is negative at -14.99%, indicating a shrinking operating business.
• Altman Z-Score of 0.65 signals potential financial distress, and EV/EBITDA of 110 implies thin operating earnings.
• Promoter holding of only 19.05% is low, raising alignment and governance concerns.
• The extreme profit growth of 1,830% and P/E of 0.74 likely reflect one-off or non-operating distortions.

AI Analysis

At ₹82.79, with book value of ₹353.13, the market is asking me to pay just 23 paise for every rupee of stated net assets. That is a classic Graham asset-play setup. But I must ask whether the book is honestly stated and whether the business is a value creator or a value destroyer. The reported P/E of 0.74 and profit growth of 1,830% are so extreme that I do not trust them; they likely include non-operating or one-time items. A utility with -14.99% sales growth has no pricing power or demand moat right now. The latest quarter shows ₹317 Cr net profit on ₹4,297 Cr sales, and free cash flow of ₹1,925 Cr, which gives some encouragement. Debt/equity of 0.44 is reasonable, and ROE of 44.14% and ROCE of 34.01% look excellent if they are from sustainable operations. The Piotroski score of 7/9 also suggests recent financial strength, not imminent collapse. However, Altman Z-score of 0.65 is in the distress zone, and EV/EBITDA of 110 tells me operating earnings are thin relative to the enterprise value. Something is off: a company cannot have both a 110x EBITDA multiple and a 0.74 P/E without large accounting distortions. Promoter holding of 19.05% is low; I want owners with skin in the game. The DCF value of ₹2,522 is far above the price, but a DCF built on declining sales and distressed financial signals is not a margin of safety. I would not anchor on that. This is a potential asset play, but only if the book value is real and can be monetized. I would watch for asset sales, debt refinancing, and operating stabilization before committing.

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