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Check Before You Invest : Gujjubhai Industries Ltd

BSE: 532070 NSE: ISIN: INE311N01016
  |   Sector:  Miscellaneous   |   Industry:  Trading

Snapshot

Q.1 Which industry/sub-sector does Gujjubhai Industries Ltd belong to?
Gujjubhai Industries Ltd belongs to the Miscellaneous sector, operating specifically within the Trading segment.
Q.2 Is Gujjubhai Industries Ltd a good quality company?
Gujjubhai 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 Gujjubhai Industries Ltd undervalued or overvalued?
Gujjubhai Industries Ltd appears Overvalued, as its key valuation ratios are higher than 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 205.12 37.94
Price to Book 13.38 8.89
Price to Sales 7.79 2.93
EV to EBITDA 157.18 25.19
Q.4 Is Gujjubhai Industries Ltd a good buy now?
Gujjubhai Industries Ltd is not a good buy now, based on weak price trend analysis suggesting prices may fall. 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 Gujjubhai Industries Ltd?
Gujjubhai Industries Ltd revenue growth is 97.1% for FY-2024, which is below its 5-year CAGR of 107.46%, indicating slower growth.

Q.2 Gross Profit margin of Gujjubhai Industries Ltd?
Gujjubhai Industries Ltd Gross profit margin which is the profit after deduction of direct costs, is 12.8% for FY-2024, which is in line with its 5-year median of 12.8%, indicating stable margins.

Q.3 Operating Profit Margin of Gujjubhai Industries Ltd?
Gujjubhai Industries Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 12.86% for FY-2024, which is in line with its 5-year median of 12.86% indicating stable margins.

Q.4 Net Profit Margin of Gujjubhai Industries Ltd?
Gujjubhai Industries Ltd Net Profit Margin is 7.75% for FY-2024, is below its 5-year median of 8.32%, indicating decreasing margins.
Current Level 5-year
Historic Median
Gross Profit Margin (%) 12.8 12.8
Operating Profit Margin (%) 12.86 12.86
Net Profit Margin (%) 7.75 8.32

B: Does the business utilize capital efficiently?

Q.5 Return on Asset of Gujjubhai Industries Ltd?
Gujjubhai Industries Ltd Return on Asset is 18.91%, which is above its 5-year historical median of 16.51%, indicating improved asset utilization efficiency.

Q.6 Return on capital employed (ROCE) of Gujjubhai Industries Ltd?
Gujjubhai Industries Ltd Return on capital employed is 45.7% for FY-2024, which is above its 5-year historical median of 24.2%. The current ROCE is above its estimated weighted average cost of capital (WACC) of 14%, indicating value creation.

Q.7 Return on Equity (ROE) of Gujjubhai Industries Ltd?
Gujjubhai Industries Ltd Return on equity is 37.7% for FY-2024, which is above its 5-year historical median of 31.89%, indicating the business is making better use of its shareholders capital.

Q.8 Cash conversion cycle of Gujjubhai Industries Ltd?
Gujjubhai Industries Ltd Cash conversion cycle is 52 days, above its 5-year historical median of -133 days, indicating deteriorated working capital management. However, you need to compare this with its peers in the industry.
Current Level 5-year
Historic Median
Asset Turnover (x) 2.44 0.44
ROE (%) 37.7 31.89
ROCE (%) 45.7 24.2
Cash Conversion Cycle 52 days -133 days

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

Q.9 Debt to Equity ratio of Gujjubhai Industries Ltd?
Gujjubhai Industries Ltd Debt-to-Equity ratio is 0.04, which is above the industry average of 0.03, indicating higher debt levels in the industry.

Q.10 Debt to cash flow from operations of Gujjubhai Industries Ltd?
Gujjubhai Industries Ltd Debt to cash flow from operations is -0.24, which is at a unhealthy level.

Ownership & governance

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

Q.1 Promoter shareholding and pledge status of Gujjubhai Industries Ltd?
Promoters hold 27.71% of the Gujjubhai Industries Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

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

Q.1 Revenue growth of Gujjubhai Industries Ltd vs industry peers?
Gujjubhai Industries Ltd revenue CAGR is 107.46%, compared to the industry median CAGR of 0%, indicating faster growth and gaining its market share.
Profit Metrics
Current Level 5-year
Industry Median
Revenue Growth (%) 97.1 -
Gross Profit Growth (%) 133.3 17.7
Operating Profit Growth (%) 133.3 16.1
Net Profit Growth (%) 100 17.2
Operating Efficiency
Current Level 5-year
Industry Median
Asset Turnover (x) 2.44 0.52
ROE (%) 37.7 2.05
ROCE (%) 45.7 3.6
Cash Conversion Cycle (days) 52.38 46

Valuation & price assessment

Q.1 Stock return of Gujjubhai Industries Ltd over the last decade?
Over the last 9 year(s), the stock has delivered a CAGR of 17.8% based on the current price.
9Y 5Y 3Y 1Y
Share Price
CAGR
17.8% 73.3% 20.4% -32.3%
Q.2 Valuation ratios of Gujjubhai Industries Ltd vs historical?
The current P/E ratio of 205.12 is higher than its historical median of 37.94, 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 205.12 37.94 33.62
Price to Book 13.38 8.89 1.57
Price to Sales 7.79 2.93 2.21
EV to EBITDA 157.18 25.19 14.09

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