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Check Before You Invest : GRM Overseas Ltd

BSE: 531449 NSE: GRMOVER ISIN: INE192H01020
  |   Sector:  FMCG   |   Industry:  Consumer Food

Snapshot

Q.1 Which industry/sub-sector does GRM Overseas Ltd belong to?
GRM Overseas Ltd belongs to the FMCG sector, operating specifically within the Consumer Food segment.
Q.2 Is GRM Overseas Ltd a good quality company?
GRM Overseas 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 GRM Overseas Ltd undervalued or overvalued?
GRM Overseas 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 62.93 27.76
Price to Book 7.21 5.64
Price to Sales 3.05 1.44
EV to EBITDA 35.89 19.63
Q.4 Is GRM Overseas Ltd a good buy now?
GRM Overseas 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 GRM Overseas Ltd?
GRM Overseas Ltd revenue growth is -23% for FY-2025, which is below its 5-year CAGR of 3.56%, indicating slower growth.

Q.2 Gross Profit margin of GRM Overseas Ltd?
GRM Overseas Ltd Gross profit margin which is the profit after deduction of direct costs, is 8% for FY-2025, which is above its 5-year median of 6.7%, indicating increasing margins.

Q.3 Operating Profit Margin of GRM Overseas Ltd?
GRM Overseas Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 7.16% for FY-2025, which is in line with its 5-year median of 7.16% indicating stable margins.

Q.4 Net Profit Margin of GRM Overseas Ltd?
GRM Overseas Ltd Net Profit Margin is 5.59% for FY-2025, is above its 5-year median of 4.71%, indicating increasing margins.
Current Level 5-year
Historic Median
Gross Profit Margin (%) 8 6.7
Operating Profit Margin (%) 7.16 7.16
Net Profit Margin (%) 5.59 4.71

B: Does the business utilize capital efficiently?

Q.5 Return on Asset of GRM Overseas Ltd?
GRM Overseas Ltd Return on Asset is 6.37%, which is below its 5-year historical median of 7.57%, indicating deteriorated asset utilization efficiency.

Q.6 Return on capital employed (ROCE) of GRM Overseas Ltd?
GRM Overseas Ltd Return on capital employed is 12.07% for FY-2025, which is below its 5-year historical median of 15.71%. 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 GRM Overseas Ltd?
GRM Overseas Ltd Return on equity is 15.45% for FY-2025, which is below its 5-year historical median of 23.52%, indicating the business is making worse use of its shareholders capital.

Q.8 Cash conversion cycle of GRM Overseas Ltd?
GRM Overseas Ltd Cash conversion cycle is 279 days, above its 5-year historical median of 166 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) 1.14 1.78
ROE (%) 15.45 23.52
ROCE (%) 12.07 15.71
Cash Conversion Cycle 279 days 166 days

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

Q.9 Debt to Equity ratio of GRM Overseas Ltd?
GRM Overseas Ltd Debt-to-Equity ratio is 1.02, which is above the industry average of 0.49, indicating higher debt levels in the industry.

Q.10 Debt to cash flow from operations of GRM Overseas Ltd?
GRM Overseas Ltd Debt to cash flow from operations is 6.51, which is at a unhealthy level.

Ownership & governance

D: Promoter shareholding and pledge status of GRM Overseas Ltd?

Q.1 Promoter shareholding and pledge status of GRM Overseas Ltd?
Promoters hold 62.51% of the GRM Overseas Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

E: How does GRM Overseas Ltd performance compare with that of its Peers?

Q.1 Revenue growth of GRM Overseas Ltd vs industry peers?
GRM Overseas Ltd revenue CAGR is 3.56%, compared to the industry median CAGR of 7.03%, indicating slower growth and losing its market share.
Profit Metrics
Current Level 5-year
Industry Median
Revenue Growth (%) -23 7
Gross Profit Growth (%) 2.8 13.3
Operating Profit Growth (%) 10.2 12.6
Net Profit Growth (%) - 20.7
Operating Efficiency
Current Level 5-year
Industry Median
Asset Turnover (x) 1.14 1.2
ROE (%) 15.45 7.22
ROCE (%) 12.07 11.34
Cash Conversion Cycle (days) 279.15 48

Valuation & price assessment

Q.1 Stock return of GRM Overseas Ltd over the last decade?
Over the last 9 year(s), the stock has delivered a CAGR of 63.9% based on the current price.
9Y 5Y 3Y 1Y
Share Price
CAGR
63.9% 25.1% 36.9% 61.7%
Q.2 Valuation ratios of GRM Overseas Ltd vs historical?
The current P/E ratio of 62.93 is higher than its historical median of 27.76, 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 62.93 27.76 26.55
Price to Book 7.21 5.64 2.53
Price to Sales 3.05 1.44 1.43
EV to EBITDA 35.89 19.63 14.38

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