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Check Before You Invest : Gokul Refoils and Solvent Ltd

BSE: 532980 NSE: GOKUL ISIN: INE020J01029
  |   Sector:  FMCG   |   Industry:  Edible Oil

Snapshot

Q.1 Which industry/sub-sector does Gokul Refoils and Solvent Ltd belong to?
Gokul Refoils and Solvent Ltd belongs to the FMCG sector, operating specifically within the Edible Oil segment.
Q.2 Is Gokul Refoils and Solvent Ltd a good quality company?
Gokul Refoils and Solvent 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 Gokul Refoils and Solvent Ltd undervalued or overvalued?
Gokul Refoils and Solvent Ltd appears Somewhat Undervalued, as its key valuation ratios are lower 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 95.43 137.56
Price to Book 1.85 1.82
Price to Sales 0.56 28.50
EV to EBITDA 60.89 91.54
Q.4 Is Gokul Refoils and Solvent Ltd a good buy now?
Gokul Refoils and Solvent Ltd is a neutral opportunity now, based on stable price trend analysis suggesting prices may move sideways. 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 Gokul Refoils and Solvent Ltd?
Gokul Refoils and Solvent Ltd revenue growth is -87.4% for FY-2025, which is below its 5-year CAGR of -9.66%, indicating slower growth.

Q.2 Gross Profit margin of Gokul Refoils and Solvent Ltd?
Gokul Refoils and Solvent Ltd Gross profit margin which is the profit after deduction of direct costs, is 44.6% for FY-2025, which is above its 5-year median of 40.6%, indicating increasing margins.

Q.3 Operating Profit Margin of Gokul Refoils and Solvent Ltd?
Gokul Refoils and Solvent Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is -35.69% for FY-2025, which is below its 5-year median of -31.17% indicating decreasing margins.

Q.4 Net Profit Margin of Gokul Refoils and Solvent Ltd?
Gokul Refoils and Solvent Ltd Net Profit Margin is 31.81% for FY-2025, is above its 5-year median of 27.99%, indicating increasing margins.
Current Level 5-year
Historic Median
Gross Profit Margin (%) 44.6 40.6
Operating Profit Margin (%) -35.69 -31.17
Net Profit Margin (%) 31.81 27.99

B: Does the business utilize capital efficiently?

Q.5 Return on Asset of Gokul Refoils and Solvent Ltd?
Gokul Refoils and Solvent Ltd Return on Asset is 1.63%, which is above its 5-year historical median of 0.93%, indicating improved asset utilization efficiency.

Q.6 Return on capital employed (ROCE) of Gokul Refoils and Solvent Ltd?
Gokul Refoils and Solvent Ltd Return on capital employed is 2.04% for FY-2025, which is above its 5-year historical median of 1.21%. The current ROCE is below its estimated weighted average cost of capital (WACC) of 14%, indicating value preservation.

Q.7 Return on Equity (ROE) of Gokul Refoils and Solvent Ltd?
Gokul Refoils and Solvent Ltd Return on equity is 1.6% for FY-2025, which is above its 5-year historical median of 0.97%, indicating the business is making better use of its shareholders capital.

Q.8 Cash conversion cycle of Gokul Refoils and Solvent Ltd?
Gokul Refoils and Solvent Ltd Cash conversion cycle is -3 days, below its 5-year historical median of 8 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) 0.05 0.05
ROE (%) 1.6 0.97
ROCE (%) 2.04 1.21
Cash Conversion Cycle -3 days 8 days

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

Q.9 Debt to Equity ratio of Gokul Refoils and Solvent Ltd?
Gokul Refoils and Solvent Ltd Debt-to-Equity ratio is 0.00, which is lower the industry average of 0.15, indicating lower debt levels in the industry.

Q.10 Debt to cash flow from operations of Gokul Refoils and Solvent Ltd?
Gokul Refoils and Solvent Ltd Debt to cash flow from operations is 0, which is at a healthy level.

Ownership & governance

D: Promoter shareholding and pledge status of Gokul Refoils and Solvent Ltd?

Q.1 Promoter shareholding and pledge status of Gokul Refoils and Solvent Ltd?
Promoters hold 73.54% of the Gokul Refoils and Solvent Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

E: How does Gokul Refoils and Solvent Ltd performance compare with that of its Peers?

Q.1 Revenue growth of Gokul Refoils and Solvent Ltd vs industry peers?
Gokul Refoils and Solvent Ltd revenue CAGR is -9.66%, compared to the industry median CAGR of 5.73%, indicating slower growth and losing its market share.
Profit Metrics
Current Level 5-year
Industry Median
Revenue Growth (%) -87.4 5.7
Gross Profit Growth (%) -37.5 18.9
Operating Profit Growth (%) -233.3 15.6
Net Profit Growth (%) 0 22
Operating Efficiency
Current Level 5-year
Industry Median
Asset Turnover (x) 0.05 2.52
ROE (%) 1.6 7.9
ROCE (%) 2.04 11.17
Cash Conversion Cycle (days) -3.19 45

Valuation & price assessment

Q.1 Stock return of Gokul Refoils and Solvent Ltd over the last decade?
Over the last 9 year(s), the stock has delivered a CAGR of 11.5% based on the current price.
9Y 5Y 3Y 1Y
Share Price
CAGR
11.5% 13% 9.3% -8.5%
Q.2 Valuation ratios of Gokul Refoils and Solvent Ltd vs historical?
The current P/E ratio of 95.43 is lower than its historical median of 137.56, indicating that the stock is trading below 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 95.43 137.56 29.43
Price to Book 1.85 1.82 2.26
Price to Sales 0.56 28.50 0.65
EV to EBITDA 60.89 91.54 16.89

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