Keystone Realtor (RUSTOMJEE)

FairStock Score: 27/100 — RISKY

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

Key Financials

Strengths

• Promoter holding of 74.59% aligns owner interests with minority shareholders.
• Debt/equity of 0.43 is moderate, providing balance-sheet resilience in a downturn.
• Book value of ₹199.95 per share offers asset backing; P/B of 1.98 is not extreme for real estate.
• ROCE of 9.33% is meaningfully above the weak ROE of 3.31%, showing some operating efficiency.

Concerns

• Sales growth of -42.64% and profit growth of -77.57% reflect severe earnings deterioration.
• Latest quarter net margin is roughly 1.9% (₹5 Cr profit on ₹266 Cr sales), showing very weak profitability.
• P/E of 57.66 is expensive despite collapsing earnings, leaving no margin of safety.
• Piotroski F-Score of 3/9 and dividend yield of just 0.36% offer little comfort to value investors.

AI Analysis

At first glance, Keystone Realtor looks like a business I would walk past. It earns an ROE of only 3.31%, meaning 100 rupees of equity produces just over three rupees of profit. ROCE is a little better at 9.33%, but still not compelling. The latest quarter sums it up: ₹266 crore of sales generated only ₹5 crore of net profit—a margin of under 2%. Meanwhile, sales have fallen 42.64% and profits have collapsed 77.57%. A buyer at the current market cap of ₹5,261 crore is paying a P/E of 57.66 for this deteriorating earnings stream. That is not value; it is hope. Graham would ask what protections exist. Book value is ₹199.95 per share, and the stock trades at ₹395.95—roughly two times book. The debt to equity ratio of 0.43 is manageable, and promoters own 74.59%, so their interests are aligned. But a high promoter holding does not make a poor return on equity good. The Piotroski F-score of 3 out of 9 suggests weak financial health, and the dividend yield of 0.36% means shareholders are paid almost nothing while waiting for a recovery. The stock has already dropped from ₹668 to ₹395.95, but a falling price alone does not create a margin of safety. Real estate is a cyclical business, and Rustomjee may be near the bottom of a downcycle. However, until I see evidence of stabilising sales, improved margins, and higher returns on capital, this remains a speculative proposition. I prefer a business with a durable moat and predictable earnings. Here, I see neither. I would wait on the sidelines.

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