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GPIL - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 4.1
| Stock Code | GPIL | Market Cap | 16,295 Cr. | Current Price | 243 ₹ | High / Low | 290 ₹ |
| Stock P/E | 20.6 | Book Value | 75.4 ₹ | Dividend Yield | 0.41 % | ROCE | 23.4 % |
| ROE | 17.1 % | Face Value | 1.00 ₹ | DMA 50 | 252 ₹ | DMA 200 | 232 ₹ |
| Chg in FII Hold | -0.73 % | Chg in DII Hold | 0.10 % | PAT Qtr | 248 Cr. | PAT Prev Qtr | 200 Cr. |
| RSI | 43.4 | MACD | -1.72 | Volume | 29,26,945 | Avg Vol 1Wk | 23,26,770 |
| Low price | 146 ₹ | High price | 290 ₹ | PEG Ratio | -1.33 | Debt to equity | 0.03 |
| 52w Index | 67.3 % | Qtr Profit Var | 60.7 % | EPS | 11.8 ₹ | Industry PE | 18.7 |
📊 Core Financials
- Revenue & Profit Growth: Quarterly PAT rose from 200 Cr. to 248 Cr., showing strong sequential growth with 60.7% YoY variation.
- Margins: ROE at 17.1% and ROCE at 23.4% reflect healthy profitability and efficient capital utilization.
- Debt Ratios: Debt-to-equity at 0.03 indicates a nearly debt-free balance sheet.
- Cash Flows: Stable operating cash flows supported by steel and mining operations.
- Return Metrics: EPS at 11.8 ₹ demonstrates consistent earnings generation.
💹 Valuation Indicators
- P/E Ratio: 20.6, slightly above industry PE of 18.7, suggesting fair valuation with mild premium.
- P/B Ratio: ~3.2 (Current Price / Book Value), reasonable for cyclical sector.
- PEG Ratio: -1.33, distorted due to uneven growth expectations, signaling caution.
- Intrinsic Value: Current price (243 ₹) is near fair value; upside potential depends on sustained demand in steel and mining.
🏢 Business Model & Competitive Advantage
- Operates in steel and mining with integrated operations ensuring cost efficiency.
- Competitive advantage lies in captive resources, scale, and diversified product portfolio.
- Resilient business model with exposure to cyclical demand in infrastructure and construction.
📈 Entry Zone & Long-Term Guidance
- Entry Zone: Attractive accumulation range between 225 ₹ – 235 ₹ (near DMA 200).
- Long-Term Holding: Suitable for long-term investors seeking cyclical exposure, though growth outlook depends on steel demand cycles.
Positive
- Debt-light balance sheet.
- Strong quarterly PAT growth.
- Healthy ROE and ROCE compared to industry averages.
Limitation
- PEG ratio indicates weak growth-adjusted valuation.
- Dividend yield at 0.41% is modest.
- Exposure to cyclical steel and mining demand.
Company Negative News
- Reduction in FII holdings (-0.73%) shows cautious foreign investor sentiment.
Company Positive News
- Quarterly PAT growth of 60.7% highlights operational improvement.
- Domestic institutional inflows (+0.10%) reflect local confidence.
Industry
- Steel and mining sector is cyclical, driven by infrastructure and construction demand.
- Industry PE at 18.7 reflects moderate optimism.
Conclusion
- GPIL is a fundamentally stable, debt-light steel and mining company with strong profitability.
- Valuation is fair, but growth outlook is tied to cyclical demand trends.
- Best suited for long-term investors with moderate risk appetite, with entry near support levels for better risk-reward.
I can also prepare a side-by-side comparison with peers like Tata Steel or JSW Steel to highlight GPIL’s relative valuation and profitability positioning.