TARC Ltd (TARC)

FairStock Score: 29/100 — RISKY

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

Key Financials

Strengths

• High promoter holding of 65.12% aligns owner and minority interests.
• Sales growth of 310.48% shows strong project execution and revenue momentum.
• Piotroski F-Score of 6/9 suggests some balance-sheet and operating metrics are improving.
• Asset-heavy real estate portfolio offers a measurable book value of ₹45.81 per share.

Concerns

• No earnings; latest quarter net loss of ₹21 Cr on sales of ₹38 Cr, with negative ROE of -18.12%.
• High leverage with Debt/Equity of 1.81 increases financial risk if project cash flows weaken.
• Trading at 3.04x book value despite value destruction, implying the market is pricing a full turnaround.
• Zero dividend yield leaves shareholders entirely reliant on capital appreciation.

AI Analysis

Let's start with what TARC is not: a profitable business. In the latest quarter, it booked ₹38 crore of sales and still lost ₹21 crore. The trailing P/E is meaningless because there are no earnings to price. Return on equity is -18.12% and ROCE is -4.83%; every rupee deployed in this company is earning less than zero after capital costs. A debt-to-equity ratio of 1.81 means the balance sheet carries serious leverage, and with a zero dividend yield, the shareholder is entirely dependent on hope. Graham would ask: is there a margin of safety? At ₹139.37, the market capitalisation is ₹4,323 crore, which is more than three times book value of ₹45.81. Paying 3x book for a company that loses money is not value investing; it's speculation on land prices and project execution. The bull case rests on the huge 310.48% sales growth and 26.65% profit growth. In real estate, a single project can produce enormous revenue swings, and TARC's promoter holding of 65.12% is high enough to keep owner and manager aligned. Piotroski F-score of 6/9 suggests some fundamentals are improving, not collapsing. But one good project could still drown this company if leverage and cost overruns continue. I would not call this a moat. Residential and commercial projects are competitive, cyclical, and dependent on approvals, interest rates, and consumer sentiment. The market has assigned it a FairStock Score of 11/100—risky. For me, the margin of safety is absent. I would put this on the watch list, not the buy list, and wait for evidence of sustained profitability and deleveraging.

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