At a Glance
Gretex Corporate Services Ltd, a SEBI-registered Category I merchant banker, posted a Q4 FY25 loss of ₹21 Cr, turning its FY25 profit party into a funeral. The stock still flaunts a P/E of 479, because, apparently, losses are fashionable now. Migration to the Main Board is approved, but fundamentals are gasping. Promoter stake slipped to 63.3%, working capital days doubled, and the only thing expanding faster than liabilities is investor confusion.
1. Introduction
Merchant bankers are supposed to raise capital, not existential questions. Gretex rode the SME bull wave in 2023–24, listing multiple SMEs and earning fat fees. But FY25 numbers show a slowdown in deals, ballooning expenses, and profits collapsing like an underwritten IPO. Will Main Board migration rescue it, or is this just another high P/E mirage?
2. Business Model (WTF Do They Even Do?)
Gretex offers:
- Merchant Banking Services: IPO management, SME listings (listed 9 in FY23), rights issues.
- Corporate Finance: Debt syndication, restructuring.
- Advisory Services: Compliance, valuations.
Revenue is lumpy, tied to capital market activity. When IPO markets boom, so does Gretex. When deals dry up, results tank—like Q4 FY25.
3. Financials Overview
FY25 Highlights:
- Revenue: ₹262 Cr (↑124% YoY)
- EBITDA: ₹5 Cr (OPM 2%)
- PAT: ₹2 Cr (↓95% YoY)
- ROE: 0.86%
- ROCE: 2.7%
Q4 FY25:
- Sales: ₹60 Cr (↓11% YoY)
- PAT: -₹21 Cr (from ₹15 Cr profit YoY)
Commentary: FY25 was a revenue boom but profit bust. Expenses exploded, margins evaporated.
4. Valuation
- P/E: EPS ₹0.58, current P/E 479 → absurd.
- EV/EBITDA: EV ₹623 Cr, EBITDA ₹5 Cr → 124x → insane.
- DCF: Negative cash flow and unpredictable earnings make DCF pointless.
Fair Value: Even
