CHENNPETRO - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 4.4
| Stock Code | CHENNPETRO | Market Cap | 15,142 Cr. | Current Price | 1,017 ₹ | High / Low | 1,160 ₹ |
| Stock P/E | 4.94 | Book Value | 725 ₹ | Dividend Yield | 0.79 % | ROCE | 35.6 % |
| ROE | 32.7 % | Face Value | 10.0 ₹ | DMA 50 | 1,008 ₹ | DMA 200 | 897 ₹ |
| Chg in FII Hold | -0.28 % | Chg in DII Hold | 1.09 % | PAT Qtr | 1,400 Cr. | PAT Prev Qtr | 987 Cr. |
| RSI | 48.3 | MACD | -4.09 | Volume | 3,80,334 | Avg Vol 1Wk | 6,20,205 |
| Low price | 603 ₹ | High price | 1,160 ₹ | PEG Ratio | -1.06 | Debt to equity | 0.18 |
| 52w Index | 74.4 % | Qtr Profit Var | 211 % | EPS | 206 ₹ | Industry PE | 14.8 |
📊 Financials: CHENNPETRO has a market cap of 15,142 Cr. with quarterly PAT rising from 987 Cr. to 1,400 Cr. (+211%). ROE at 32.7% and ROCE at 35.6% are excellent, reflecting strong efficiency and profitability. Debt-to-equity at 0.18 is low, indicating a healthy balance sheet. EPS of 206 ₹ highlights strong earnings power, supported by robust cash flows.
💹 Valuation: The stock trades at a P/E of 4.94, well below the industry average of 14.8, suggesting significant undervaluation. P/B ratio is ~1.4 (1017/725), reasonable for the sector. PEG ratio of -1.06 indicates growth volatility, but intrinsic value appears higher than current price, offering a strong margin of safety.
🏢 Business Model: CHENNPETRO operates in the refining and petrochemical sector, benefiting from rising energy demand and industrial growth. Its competitive advantage lies in scale, government backing, and efficient operations. Strong profitability metrics underline resilience, though earnings remain sensitive to crude oil price fluctuations.
📈 Entry Zone: With RSI at 48.3 (neutral), MACD negative, and price near DMA 50 (1008 ₹) and DMA 200 (897 ₹), accumulation around 980–1020 ₹ looks favorable. Long-term holding is justified given undervaluation, strong ROE, and profit growth, but investors should monitor commodity price cycles.
Positive
- 📌 Strong PAT growth (+211% QoQ).
- 📌 Excellent ROE of 32.7% and ROCE of 35.6%.
- 📌 Low debt-to-equity ratio (0.18) ensures financial stability.
- 📌 EPS of 206 ₹ supports earnings visibility.
Limitation
- ⚠️ PEG ratio of -1.06 highlights growth volatility.
- ⚠️ Dividend yield of 0.79% is modest.
- ⚠️ Earnings sensitive to crude oil price fluctuations.
Company Negative News
- ❌ Decline in FII holdings (-0.28%) indicates reduced foreign investor confidence.
Company Positive News
- ✅ Increase in DII holdings (+1.09%) shows strong domestic institutional support.
- ✅ Robust quarterly profit growth and efficient operations.
Industry
- 🏦 Refining and petrochemical sector benefits from rising energy demand and industrial expansion.
- 🏦 Industry P/E at 14.8 suggests CHENNPETRO trades at a significant discount.
Conclusion
🔑 CHENNPETRO is fundamentally strong with undervaluation relative to peers, low debt, and excellent return metrics. Despite growth volatility and sensitivity to crude prices, long-term investors may consider entry around 980–1020 ₹ for better risk-reward balance. The company remains a resilient player in the refining sector with strong fundamentals and attractive valuation.
For deeper insights, you could explore a peer comparison or a refining sector outlook to see how CHENNPETRO stacks up against competitors.