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INVESTMENT INSIGHTS

Check Before You Invest : Godrej Industries Ltd

BSE: 500164 NSE: GODREJIND ISIN: INE233A01035
  |   Sector:  Chemicals & Fertilizers   |   Industry:  Chemicals

Snapshot

Q.1 Which industry/sub-sector does Godrej Industries Ltd belong to?
Godrej Industries Ltd belongs to the Chemicals & Fertilizers sector, operating specifically within the Chemicals segment.
Q.2 Is Godrej Industries Ltd a good quality company?
Godrej Industries Ltd is a average quality company, based on a somewhat consistent multi-year financial track record.

This assessment is based on company’s performance on Revenue growth, ROCE, Equity and Assets, key margin ratios, cash conversion cycle, and debt to cash flow from operations and how it compares with its long term averages.

Q.3 Is Godrej Industries Ltd undervalued or overvalued?
Godrej Industries Ltd appears Fair, as its key valuation ratios are in line with their past averages.

Based on the industry it operates in, the relevant valuation ratios include one of the following, P/E, P/BV, P/Sales, EV/EBITDA or a combination of two or more.

Valuation Ratios Current 5-year
Historic Median
Price to Earnings 612.87 -
Price to Book 21.14 13.52
Price to Sales 7.78 7.67
EV to EBITDA 48.3 50.05
Q.4 Is Godrej Industries Ltd a good buy now?
Godrej Industries Ltd is a good buy now, based on strong price trend analysis suggesting prices may rise. However, you need to check its quality and valuation before making a decision

Performance Analysis

We have analysed the performance of the company on the following:

  • How has it performed on generating Profits?

    By checking its Revenue growth, Gross, Operating and Net Margins compared to its last 5-year median.

  • How efficiently has it utilized Capital?

    By checking its ROCE, ROA, ROE and its Cash Conversion Cycle.

  • How is it managing its Debt?

    By checking its Debt to Equity and Cash Flow from Operations.

A: What are the trends in revenue and profit margins?

Q.1 Revenue growth of Godrej Industries Ltd?
Godrej Industries Ltd revenue growth is 38.2% for FY-2025, which is above its 5-year CAGR of 16.2%, indicating faster growth.

Q.2 Gross Profit margin of Godrej Industries Ltd?
Godrej Industries Ltd Gross profit margin which is the profit after deduction of direct costs, is 6.9% for FY-2025, which is above its 5-year median of 2.8%, indicating increasing margins.

Q.3 Operating Profit Margin of Godrej Industries Ltd?
Godrej Industries Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 21.83% for FY-2025, which is above its 5-year median of 12.38% indicating increasing margins.

Q.4 Net Profit Margin of Godrej Industries Ltd?
Godrej Industries Ltd Net Profit Margin is 4.55% for FY-2025, is above its 5-year median of -1.32%, indicating increasing margins.
Current Level 5-year
Historic Median
Gross Profit Margin (%) 6.9 2.8
Operating Profit Margin (%) 21.83 12.38
Net Profit Margin (%) 4.55 -1.32

B: Does the business utilize capital efficiently?

Q.5 Return on Asset of Godrej Industries Ltd?
Godrej Industries Ltd Return on Asset is 1.6%, which is above its 5-year historical median of -0.57%, indicating improved asset utilization efficiency.

Q.6 Return on capital employed (ROCE) of Godrej Industries Ltd?
Godrej Industries Ltd Return on capital employed is 8.55% for FY-2025, which is above its 5-year historical median of 4.71%. The current ROCE is below its estimated weighted average cost of capital (WACC) of 11.25%, indicating value preservation.

Q.7 Return on Equity (ROE) of Godrej Industries Ltd?
Godrej Industries Ltd Return on equity is 11.8% for FY-2025, which is above its 5-year historical median of -2.94%, indicating the business is making better use of its shareholders capital.

Q.8 Cash conversion cycle of Godrej Industries Ltd?
Godrej Industries Ltd Cash conversion cycle is 40 days, below its 5-year historical median of 63 days, indicating improved working capital management. However, you need to compare this with its peers in the industry.
Current Level 5-year
Historic Median
Asset Turnover (x) 0.35 0.35
ROE (%) 11.8 -2.94
ROCE (%) 8.55 4.71
Cash Conversion Cycle 40 days 63 days

C: How much debt does the business have and is it at a sustainable level?

Q.9 Debt to Equity ratio of Godrej Industries Ltd?
Godrej Industries Ltd Debt-to-Equity ratio is 5.91, which is above the industry average of 0.13, indicating higher debt levels in the industry.

Q.10 Debt to cash flow from operations of Godrej Industries Ltd?
Godrej Industries Ltd Debt to cash flow from operations is 10.81, which is at a unhealthy level.

Ownership & governance

D: Promoter shareholding and pledge status of Godrej Industries Ltd?

Q.1 Promoter shareholding and pledge status of Godrej Industries Ltd?
Promoters hold 74.64% of the Godrej Industries Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

E: How does Godrej Industries Ltd performance compare with that of its Peers?

Q.1 Revenue growth of Godrej Industries Ltd vs industry peers?
Godrej Industries Ltd revenue CAGR is 16.20%, compared to the industry median CAGR of 7.53%, indicating faster growth and gaining its market share.
Profit Metrics
Current Level 5-year
Industry Median
Revenue Growth (%) 38.2 7.5
Gross Profit Growth (%) 0 12.1
Operating Profit Growth (%) 144.4 11.7
Net Profit Growth (%) 0 9.7
Operating Efficiency
Current Level 5-year
Industry Median
Asset Turnover (x) 0.35 0.93
ROE (%) 11.8 10.17
ROCE (%) 8.55 12.96
Cash Conversion Cycle (days) 39.81 62

Valuation & price assessment

Q.1 Stock return of Godrej Industries Ltd over the last decade?
Over the last 9 year(s), the stock has delivered a CAGR of 12.6% based on the current price.
9Y 5Y 3Y 1Y
Share Price
CAGR		 12.6% 14.5% 32.8% -4.9%
Q.2 Valuation ratios of Godrej Industries Ltd vs historical?
The current P/E ratio of 612.87 is higher than its historical median of , indicating that the stock is trading above its historical average valuation.
Q.3 How do the current valuation ratios compare with 5-year historical median and industry numbers?
Valuation Ratios Current 5-year
Historic Median		 5-year
Industry Median
Price to Earnings 612.87 - 28.17
Price to Book 21.14 13.52 2.22
Price to Sales 7.78 7.67 1.93
EV to EBITDA 48.3 50.05 14.20

Check more companies

1. Navin Fluorine Intl
2. Godrej Industries
3. Deepak Nitrite
4. Deepak Fert & Petro
5. Atul
6. Tata Chemicals
7. Aarti Industries
8. Fine Organic Inds.
9. Aether Industries
10. BASF India

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2. Emmvee Photovoltaic Power Ltd.
3. Elecon Engineering Company Ltd.
4. Divis Laboratories Ltd.
5. Apollo Hospitals Enterprise Ltd.
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