CASTROLIND - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 4.0
| Stock Code | CASTROLIND | Market Cap | 18,281 Cr. | Current Price | 185 ₹ | High / Low | 232 ₹ |
| Stock P/E | 18.8 | Book Value | 19.2 ₹ | Dividend Yield | 4.73 % | ROCE | 60.3 % |
| ROE | 45.9 % | Face Value | 5.00 ₹ | DMA 50 | 183 ₹ | DMA 200 | 192 ₹ |
| Chg in FII Hold | -1.20 % | Chg in DII Hold | -0.38 % | PAT Qtr | 242 Cr. | PAT Prev Qtr | 261 Cr. |
| RSI | 58.9 | MACD | 0.65 | Volume | 16,26,670 | Avg Vol 1Wk | 18,63,559 |
| Low price | 170 ₹ | High price | 232 ₹ | PEG Ratio | 3.26 | Debt to equity | 0.03 |
| 52w Index | 23.6 % | Qtr Profit Var | 3.74 % | EPS | 9.69 ₹ | Industry PE | 13.0 |
📊 Financials: CASTROLIND demonstrates exceptional efficiency with ROCE at 60.3% and ROE at 45.9%. EPS of ₹9.69 supports profitability, though quarterly PAT declined from ₹261 Cr. to ₹242 Cr. (-3.74%). Debt-to-equity ratio of 0.03 highlights a nearly debt-free balance sheet, strengthening financial health.
💹 Valuation: The stock trades at a P/E of 18.8, above the industry average of 13.0, suggesting premium valuation. Book value of ₹19.2 results in a high P/B of ~9.6, indicating expensive pricing relative to assets. PEG ratio of 3.26 reflects costly growth expectations. Dividend yield of 4.73% provides strong income support, balancing valuation risks.
🏢 Business Model: CASTROLIND operates in lubricants and automotive consumables, benefiting from essential demand across industrial and consumer markets. Its competitive advantage lies in high efficiency metrics, strong dividend yield, and debt-free operations. However, reduced institutional holdings (FII -1.20%, DII -0.38%) raise caution.
🎯 Entry Zone: Attractive entry between ₹175–185, near support levels. Long-term investors may hold for 3–5 years, with exit considerations if ROE falls below 40% or earnings growth slows further.
Positive
- Exceptional ROCE (60.3%) and ROE (45.9%).
- Debt-to-equity ratio of 0.03, effectively debt-free.
- Dividend yield of 4.73% provides strong income support.
- EPS of ₹9.69 with consistent profitability.
Limitation
- P/E of 18.8 above industry average (13.0), suggesting overvaluation.
- Quarterly PAT declined (-3.74%), showing earnings pressure.
- PEG ratio of 3.26 indicates expensive growth valuation.
- Institutional holdings decreased (FII -1.20%, DII -0.38%).
- Book value of ₹19.2 is low compared to current price.
Company Negative News
- Decline in quarterly PAT and reduced institutional holdings highlight near-term concerns.
Company Positive News
- Strong dividend yield continues to attract income-focused investors.
- Operational efficiency remains robust with high ROCE and ROE.
Industry
- Industry P/E is 13.0, lower than CASTROLIND’s P/E of 18.8, suggesting premium valuation.
- Lubricants and automotive sector faces cyclical demand but remains essential for industrial and consumer markets.
Conclusion
✅ CASTROLIND is consolidating near support levels with strong fundamentals but weaker short-term earnings momentum. Entry near ₹175–185 offers a favorable setup, while exit near ₹200–210 is prudent unless volume strengthens for a breakout toward ₹232. Long-term investors benefit from dividend yield and efficiency metrics but should monitor valuation and institutional sentiment closely.