GNFC - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 20 Dec 25, 11:15 pm

Fundamental Rating: 3.7

📊 Core Financials

• Revenue & Profit Growth: Quarterly PAT rose from 78 Cr. to 177 Cr. (↑ 127%), YoY profit variation at 73.5% shows strong rebound.
• Margins: ROCE at 9.7% and ROE at 7.03% are modest, indicating average efficiency.
• Debt Ratios: Debt-to-equity at 0.00 reflects zero leverage, strong financial stability.
• Cash Flows: Dividend yield at 3.68% provides attractive shareholder returns, supported by consistent earnings.

💹 Valuation Indicators

• P/E Ratio: 11.5, well below industry PE of 20.0, suggesting undervaluation.
• P/B Ratio: Current Price / Book Value ≈ 0.84, trading below book value, attractive for value investors.
• PEG Ratio: -0.38, distorted due to earnings volatility, limiting valuation reliability.
• Intrinsic Value: Based on EPS (₹42.4) and industry PE, fair value ≈ ₹840–850, significantly above current price.

🏢 Business Model & Competitive Advantage

• GNFC operates in chemicals, fertilizers, and IT services, with diversified revenue streams.
• Strong government backing and established market presence provide stability.
• Debt-free balance sheet enhances resilience against industry cycles.

📈 Entry Zone & Holding Guidance

• Entry Zone: Attractive between ₹450–480, near 52-week low and below book value.
• Long-Term Holding: Suitable for value investors seeking dividend yield and turnaround potential.

✅ Positive

• Debt-free balance sheet (Debt-to-equity 0.00).
• Dividend yield at 3.68% provides strong income support.
• P/E ratio (11.5) and P/B ratio (0.84) suggest undervaluation.
• Quarterly PAT growth (↑ 127%) shows strong recovery.

⚠️ Limitation

• ROCE (9.7%) and ROE (7.03%) are modest compared to industry leaders.
• PEG ratio negative (-0.38), valuation distorted by earnings volatility.
• Technical indicators (RSI 40.7, MACD -2.27) suggest weak momentum.

📉 Company Negative News

• FII holdings reduced (-0.59%), showing declining foreign investor confidence.
• Profitability remains modest despite recent rebound.

📢 Company Positive News

• DII holdings increased (+0.20%), reflecting domestic investor support.
• Strong quarterly profit growth and attractive dividend yield.

🏭 Industry

• Industry PE at 20.0, higher than GNFC’s P/E (11.5), suggesting undervaluation.
• Chemicals and fertilizers sector benefits from industrial demand and government support.
• Sector remains cyclical, influenced by commodity prices and global demand trends.

🔎 Conclusion

• GNFC shows strong recovery with debt-free balance sheet and attractive dividend yield.
• Valuation metrics suggest significant undervaluation compared to intrinsic value and industry peers.
• Entry recommended near ₹450–480; long-term hold viable for value investors seeking stable returns.