TBO Tek (TBOTEK)

FairStock Score: 48/100 — MIXED

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

Key Financials

Strengths

• 5-year revenue CAGR of 65.01% and latest sales growth of 39.08% demonstrate strong demand
• ROE of 20.34% and ROCE of 26.68% indicate efficient capital deployment
• Piotroski F-Score of 8/9 suggests solid overall financial health
• Debt/Equity of 0.52 is moderate, not over-leveraged
• Promoter holding of 44.40% aligns interests with minority shareholders

Concerns

• Extremely expensive: P/E 56.97, P/B 11.30, and Graham Number of ₹239.22 leaves no margin of safety
• Free cash flow is negative at -₹154 Cr despite reported profits; profit growth of only 11.72% lags sales growth of 39.08%
• Altman Z-Score of 2.02 and negative EV/EBITDA raise caution flags on earnings quality and valuation
• Zero dividend yield means total return depends entirely on future price appreciation

AI Analysis

TBO Tek is a fast-growing travel services company, and I like growth—but only when the price doesn't consume tomorrow's returns. The 5-year revenue CAGR of 65.01% and latest sales growth of 39.08% are impressive. Reported ROE of 20.34% and ROCE of 26.68% show decent capital allocation. The Piotroski score of 8/9 also suggests the company is financially sound on an operating basis. The balance sheet is not reckless, with debt/equity at 0.52, though travel is a cyclical, competitive, low-moat industry. In the latest quarter, net profit of ₹54 Cr on sales of ₹784 Cr is only about a 6.9% margin, and profit growth of 11.72% lags sales growth materially. Free cash flow is negative at -₹154 Cr, which bothers me: earnings without cash can be an illusion. The valuation is the true problem. At ₹1,243.90, the market cap is ₹13,311 Cr, the P/E is nearly 57, and the P/B is 11.3. Graham's number is ₹239.22; the price is more than five times that. The margin of safety is -412%. I cannot find a margin of safety. The negative EV/EBITDA is a strange signal that needs explanation. The Altman Z-Score of 2.02 is in the grey zone, adding caution. With zero dividend yield, the investor must rely entirely on high-multiple price appreciation. This is a high-quality growth story, but the price makes it a poor Graham-style investment today. If I owned it, I would watch cash conversion and profit growth; if I didn't, I would wait for a far lower price.

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