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Check Before You Invest : Gayatri Rubbers and Chemicals Ltd

BSE: 0 NSE: GRCL ISIN: INE0LVM01018
  |   Sector:  Agriculture & Allied activities   |   Industry:  Rubber Products

Snapshot

Q.1 Which industry/sub-sector does Gayatri Rubbers and Chemicals Ltd belong to?
Gayatri Rubbers and Chemicals Ltd belongs to the Agriculture & Allied activities sector, operating specifically within the Rubber Products segment.
Q.2 Is Gayatri Rubbers and Chemicals Ltd a good quality company?
Gayatri Rubbers and Chemicals Ltd is a weak quality company, based on a inconsistent 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 Gayatri Rubbers and Chemicals Ltd undervalued or overvalued?
Gayatri Rubbers and Chemicals 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 3-year
Historic Median
Price to Earnings 61.2 118.92
Price to Book 17.36 16.46
Price to Sales 8.18 7.37
EV to EBITDA 38.82 61.96
Q.4 Is Gayatri Rubbers and Chemicals Ltd a good buy now?
Gayatri Rubbers and Chemicals 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.

Q.1 Gross Profit margin of Gayatri Rubbers and Chemicals Ltd?
Gayatri Rubbers and Chemicals Ltd Gross profit margin which is the profit after deduction of direct costs, is 13.5% for FY-2025, which is above its 3-year median of 10%, indicating increasing margins.

Q.2 Operating Profit Margin of Gayatri Rubbers and Chemicals Ltd?
Gayatri Rubbers and Chemicals Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 14.68% for FY-2025, which is above its 3-year median of 11.21% indicating increasing margins.

Q.3 Net Profit Margin of Gayatri Rubbers and Chemicals Ltd?
Gayatri Rubbers and Chemicals Ltd Net Profit Margin is 8.93% for FY-2025, is above its 3-year median of 6.39%, indicating increasing margins.
Current Level 3-year
Historic Median
Gross Profit Margin (%) 13.5 10
Operating Profit Margin (%) 14.68 11.21
Net Profit Margin (%) 8.93 6.39

B: Does the business utilize capital efficiently?

Q.4 Return on Asset of Gayatri Rubbers and Chemicals Ltd?
Gayatri Rubbers and Chemicals Ltd Return on Asset is 17.62%, which is above its 3-year historical median of 13.3%, indicating improved asset utilization efficiency.

Q.5 Return on capital employed (ROCE) of Gayatri Rubbers and Chemicals Ltd?
Gayatri Rubbers and Chemicals Ltd Return on capital employed is 31.92% for FY-2025, which is above its 3-year historical median of 22.49%. The current ROCE is above its estimated weighted average cost of capital (WACC) of 14%, indicating value creation.

Q.6 Return on Equity (ROE) of Gayatri Rubbers and Chemicals Ltd?
Gayatri Rubbers and Chemicals Ltd Return on equity is 22.44% for FY-2025, which is above its 3-year historical median of 14.87%, indicating the business is making better use of its shareholders capital.

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

Q.7 Debt to Equity ratio of Gayatri Rubbers and Chemicals Ltd?
Gayatri Rubbers and Chemicals Ltd Debt-to-Equity ratio is 0.06, which is lower the industry average of 0.44, indicating lower debt levels in the industry.

Q.8 Debt to cash flow from operations of Gayatri Rubbers and Chemicals Ltd?
Gayatri Rubbers and Chemicals Ltd Debt to cash flow from operations is 1.88, which is at a moderate level.

Ownership & governance

D: Promoter shareholding and pledge status of Gayatri Rubbers and Chemicals Ltd?

Q.1 Promoter shareholding and pledge status of Gayatri Rubbers and Chemicals Ltd?
Promoters hold 74.03% of the Gayatri Rubbers and Chemicals Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

E: How does Gayatri Rubbers and Chemicals Ltd performance compare with that of its Peers?

Q.1 Revenue growth of Gayatri Rubbers and Chemicals Ltd vs industry peers?
Gayatri Rubbers and Chemicals Ltd revenue CAGR is 0.00%, compared to the industry median CAGR of 5.61%, indicating slower growth and losing its market share.
Profit Metrics
Current Level 3-year
Industry Median
Revenue Growth (%) - 5.6
Gross Profit Growth (%) 100 23.1
Operating Profit Growth (%) 66.7 18.6
Net Profit Growth (%) 50 35.5
Operating Efficiency
Current Level 3-year
Industry Median
Asset Turnover (x) 1.97 1.32
ROE (%) 22.44 9.67
ROCE (%) 31.92 12.79
Cash Conversion Cycle (days) 134.94 67

Valuation & price assessment

Q.1 Stock return of Gayatri Rubbers and Chemicals Ltd over the last decade?
Over the last 3 year(s), the stock has delivered a CAGR of 136.42% based on the current price.
9Y 5Y 3Y 1Y
Share Price
CAGR
- - 136.4% 44.3%
Q.2 Valuation ratios of Gayatri Rubbers and Chemicals Ltd vs historical?
The current P/E ratio of 61.2 is lower than its historical median of 118.92, indicating that the stock is trading below its historical average valuation.
Q.3 How do the current valuation ratios compare with 3-year historical median and industry numbers?
Valuation Ratios Current 3-year
Historic Median
3-year
Industry Median
Price to Earnings 61.2 118.92 23.94
Price to Book 17.36 16.46 2.69
Price to Sales 8.18 7.37 1.38
EV to EBITDA 38.82 61.96 16.28

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