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Check Before You Invest : Shri Venkatesh Refineries Ltd

BSE: 543373 NSE: ISIN: INE0HLJ01013
  |   Sector:  Agriculture & Allied activities   |   Industry:  Solvent Extraction

Snapshot

Q.1 Which industry/sub-sector does Shri Venkatesh Refineries Ltd belong to?
Shri Venkatesh Refineries Ltd belongs to the Agriculture & Allied activities sector, operating specifically within the Solvent Extraction segment.
Q.2 Is Shri Venkatesh Refineries Ltd a good quality company?
Shri Venkatesh Refineries 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 Shri Venkatesh Refineries Ltd undervalued or overvalued?
Shri Venkatesh Refineries 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 30.91 17.73
Price to Book 6.83 4.29
Price to Sales 0.8 0.39
EV to EBITDA 20.25 12.63
Q.4 Is Shri Venkatesh Refineries Ltd a good buy now?
Shri Venkatesh Refineries 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 Shri Venkatesh Refineries Ltd?
Shri Venkatesh Refineries Ltd revenue growth is 22% for FY-2025, which is below its 5-year CAGR of 24.41%, indicating slower growth.

Q.2 Gross Profit margin of Shri Venkatesh Refineries Ltd?
Shri Venkatesh Refineries Ltd Gross profit margin which is the profit after deduction of direct costs, is 3.7% for FY-2025, which is above its 5-year median of 3.3%, indicating increasing margins.

Q.3 Operating Profit Margin of Shri Venkatesh Refineries Ltd?
Shri Venkatesh Refineries Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 5.09% for FY-2025, which is above its 5-year median of 4.42% indicating increasing margins.

Q.4 Net Profit Margin of Shri Venkatesh Refineries Ltd?
Shri Venkatesh Refineries Ltd Net Profit Margin is 2.58% for FY-2025, is above its 5-year median of 2.3%, indicating increasing margins.
Current Level 5-year
Historic Median
Gross Profit Margin (%) 3.7 3.3
Operating Profit Margin (%) 5.09 4.42
Net Profit Margin (%) 2.58 2.3

B: Does the business utilize capital efficiently?

Q.5 Return on Asset of Shri Venkatesh Refineries Ltd?
Shri Venkatesh Refineries Ltd Return on Asset is 6.33%, which is below its 5-year historical median of 7.42%, indicating deteriorated asset utilization efficiency.

Q.6 Return on capital employed (ROCE) of Shri Venkatesh Refineries Ltd?
Shri Venkatesh Refineries Ltd Return on capital employed is 15.42% for FY-2025, which is below its 5-year historical median of 18.04%. 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 Shri Venkatesh Refineries Ltd?
Shri Venkatesh Refineries Ltd Return on equity is 24.45% for FY-2025, which is below its 5-year historical median of 29.89%, indicating the business is making worse use of its shareholders capital.

Q.8 Cash conversion cycle of Shri Venkatesh Refineries Ltd?
Shri Venkatesh Refineries Ltd Cash conversion cycle is 94 days, above its 5-year historical median of 64 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) 2.46 4.07
ROE (%) 24.45 29.89
ROCE (%) 15.42 18.04
Cash Conversion Cycle 94 days 64 days

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

Q.9 Debt to Equity ratio of Shri Venkatesh Refineries Ltd?
Shri Venkatesh Refineries Ltd Debt-to-Equity ratio is 2.23, which is above the industry average of 0.09, indicating higher debt levels in the industry.

Q.10 Debt to cash flow from operations of Shri Venkatesh Refineries Ltd?
Shri Venkatesh Refineries Ltd Debt to cash flow from operations is 165.12, which is at a unhealthy level.

Ownership & governance

D: Promoter shareholding and pledge status of Shri Venkatesh Refineries Ltd?

Q.1 Promoter shareholding and pledge status of Shri Venkatesh Refineries Ltd?
Promoters hold 73.53% of the Shri Venkatesh Refineries Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

E: How does Shri Venkatesh Refineries Ltd performance compare with that of its Peers?

Q.1 Revenue growth of Shri Venkatesh Refineries Ltd vs industry peers?
Shri Venkatesh Refineries Ltd revenue CAGR is 24.41%, compared to the industry median CAGR of 0.00%, indicating faster growth and gaining its market share.
Profit Metrics
Current Level 5-year
Industry Median
Revenue Growth (%) 22 0
Gross Profit Growth (%) 23.8 32
Operating Profit Growth (%) 24.1 34.1
Net Profit Growth (%) 20 24.6
Operating Efficiency
Current Level 5-year
Industry Median
Asset Turnover (x) 2.46 0.24
ROE (%) 24.45 1.83
ROCE (%) 15.42 3.23
Cash Conversion Cycle (days) 93.65 14

Valuation & price assessment

Q.1 Stock return of Shri Venkatesh Refineries Ltd over the last decade?
Over the last 3 year(s), the stock has delivered a CAGR of 48.4% based on the current price.
9Y 5Y 3Y 1Y
Share Price
CAGR
- - 48.4% 19.1%
Q.2 Valuation ratios of Shri Venkatesh Refineries Ltd vs historical?
The current P/E ratio of 30.91 is higher than its historical median of 17.73, 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 30.91 17.73 17.51
Price to Book 6.83 4.29 1.62
Price to Sales 0.8 0.39 0.62
EV to EBITDA 20.25 12.63 9.20

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