CHENNPETRO - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 05 Nov 25, 7:43 am

Fundamental Rating: 3.9

📈 Positive

• 📊 Strong quarterly turnaround with PAT rising to ₹732 Cr. from a loss of ₹56.6 Cr.
• 📈 EPS of ₹76.2 supports strong earnings visibility and valuation justification.
• 📉 Low P/E of 12.9 vs industry average of 20.7 suggests undervaluation.
• 📈 MACD at 21.1 and RSI at 67.9 reflect bullish momentum.
• 📉 Debt-to-equity ratio of 0.23 indicates manageable leverage.
• 📈 Trading well above DMA50 and DMA200 (₹754 and ₹702), confirming strong technical breakout.

⚠️ Limitation

• 📉 ROCE (4.04%) and ROE (2.10%) are weak, suggesting poor capital efficiency despite recent profit spike.
• 📉 PEG ratio of -0.26 reflects earnings volatility and unreliable growth trajectory.
• 📉 Dividend yield of 0.56% is modest, offering limited passive income.

📰 Company Negative News

• 📉 Previous quarter loss of ₹56.6 Cr. highlights earnings inconsistency.
• 📉 ROE and ROCE remain low despite profit recovery, raising concerns about sustainability.

🌟 Company Positive News

• 📈 Quarterly PAT jumped 216%, signaling strong operational rebound.
• 📈 Volume surge above 1-week average suggests rising investor interest.

🛢️ Industry

• 🛢️ CHENNPETRO operates in the oil refining and petrochemical sector, sensitive to crude prices and regulatory shifts.
• 📊 Industry P/E of 20.7 reflects moderate growth expectations and cyclical volatility.

🧭 Conclusion

• 📌 Suggested entry zone: ₹920–₹950, offering better margin of safety below recent highs.
• 🕰️ Long-term holding viable for value investors seeking cyclical rebound, but monitor ROE/ROCE trends.
• ⚖️ Watch for earnings consistency and margin improvement to justify sustained valuation upside.