GNFC - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 19 Sept 25, 2:16 pm

Fundamental Rating: 3.8

📊 Core Financials Breakdown

Profitability

ROE: 7.03% and ROCE: 9.70% — modest returns, below industry leaders but stable.

EPS: ₹37.3 — decent earnings base, though quarterly PAT dropped from ₹210 Cr to ₹78 Cr (−32.2%), signaling margin pressure or one-off impacts.

Dividend Yield: 3.49% — attractive for income-focused investors.

Balance Sheet & Leverage

Debt-to-Equity: 0.01 — virtually debt-free, a major strength in a capital-heavy sector.

Book Value: ₹575 — implies a P/B ratio of ~0.9, undervalued relative to asset base.

💰 Valuation Metrics

Metric Value Comment

P/E Ratio 13.8 Below industry average (21.9) — undervalued

PEG Ratio -0.46 Negative PEG suggests earnings volatility or contraction

Intrinsic Value ~₹490–₹510 CMP is slightly above fair value zone

Valuation is attractive, though earnings softness tempers optimism.

🧪 Business Model & Competitive Edge

Sector: Fertilizers & Specialty Chemicals — urea, ammonium nitrophosphate, acetic acid, methanol, formic acid, and TDI.

Strengths

Diversified product mix across fertilizers and industrial chemicals.

Government-backed joint venture with GSFC — strategic stability.

DII holding up (+0.35%) — positive domestic sentiment.

Strong historical dividend payout and low leverage.

Challenges

FII holding down (−2.36%) — cautious foreign stance.

Recent profit contraction and negative PEG ratio.

Sector cyclicality and global chemical pricing pressures.

📉 Technicals & Entry Zone

Current Price: ₹516

DMA 50: ₹522 | DMA 200: ₹545 — trading below both, indicating short-term weakness

RSI: 50.0 — neutral zone

MACD: Negative — momentum cooling

📌 Suggested Entry Zone: ₹490–₹510

A dip near intrinsic value or 200 DMA would offer a better margin of safety.

🧭 Long-Term Holding Guidance

Hold if invested: Strong balance sheet, dividend yield, and diversified operations make GNFC a stable long-term play.

Accumulate on dips: Ideal for value investors seeking exposure to fertilizers and specialty chemicals with low debt risk.

You can explore GNFC’s financials and technical chart on TradingView or review its valuation metrics and dividend history for deeper insights. Let me know if you'd like a peer comparison with Deepak Nitrite or Chambal Fertilizers.

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