GODREJIND - Investment Analysis: Buy Signal or Bull Trap?
Back to ListInvestment Rating: 2.8
| Stock Code | GODREJIND | Market Cap | 34,112 Cr. | Current Price | 1,012 ₹ | High / Low | 1,392 ₹ |
| Stock P/E | 37,078 | Book Value | 52.7 ₹ | Dividend Yield | 0.00 % | ROCE | 8.13 % |
| ROE | 9.04 % | Face Value | 1.00 ₹ | DMA 50 | 1,018 ₹ | DMA 200 | 1,075 ₹ |
| Chg in FII Hold | -0.26 % | Chg in DII Hold | 0.52 % | PAT Qtr | 99.0 Cr. | PAT Prev Qtr | -30.0 Cr. |
| RSI | 52.0 | MACD | -6.08 | Volume | 29,091 | Avg Vol 1Wk | 49,096 |
| Low price | 764 ₹ | High price | 1,392 ₹ | PEG Ratio | 198 | Debt to equity | 6.26 |
| 52w Index | 39.5 % | Qtr Profit Var | -35.1 % | EPS | 0.03 ₹ | Industry PE | 22.9 |
📊 Analysis: Godrej Industries shows weak fundamentals with ROCE at 8.13% and ROE at 9.04%, reflecting poor capital efficiency. The company carries high leverage (debt-to-equity 6.26), which increases financial risk. EPS of 0.03 ₹ is extremely low, making its P/E ratio (37,078) unrealistic compared to industry PE (22.9). The PEG ratio of 198 further highlights severe overvaluation relative to growth. Dividend yield is 0%, offering no income support. Quarterly PAT improved to 99 Cr. from a loss (-30 Cr.), but overall profit variation remains negative (-35.1%). Technicals show consolidation near DMA 50 (1,018 ₹) and DMA 200 (1,075 ₹), with weak momentum (MACD -6.08).
💰 Entry Price Zone: Ideal accumulation range is 900 ₹ – 950 ₹, closer to support levels and below DMA averages for margin of safety. Current price (1,012 ₹) is slightly above this zone, so cautious staggered buying is advisable only for high-risk investors.
📈 Exit / Holding Strategy: For existing holders, consider reducing exposure given weak fundamentals and high debt. Partial profit booking can be considered near 1,350 ₹ – 1,390 ₹ (recent highs). Long-term holding beyond 2–3 years is risky unless ROE/ROCE improve and debt levels reduce significantly. Focus should remain on capital preservation rather than compounding.
✅ Positive
- Quarterly PAT recovery (99 Cr. vs -30 Cr.)
- DII holdings increased (+0.52%)
- Stock supported by DMA 200 zone (1,075 ₹)
⚠️ Limitation
- Extremely high P/E ratio (37,078) vs industry PE (22.9)
- Weak ROE (9.04%) and ROCE (8.13%)
- PEG ratio of 198 indicates severe overvaluation
- No dividend yield (0%)
📉 Company Negative News
- High leverage (debt-to-equity 6.26)
- Quarterly profit variation negative (-35.1%)
- Decline in FII holdings (-0.26%)
📈 Company Positive News
- Turnaround from loss to profit in latest quarter
- DII confidence increased (+0.52%)
🏭 Industry
- Diversified conglomerate sector with cyclical exposure
- Industry PE at 22.9 highlights moderate valuation levels
- Sector rotation favors companies with strong balance sheets
🔎 Conclusion
Godrej Industries is a high-risk investment with weak efficiency ratios, extreme valuations, and heavy debt. While recent profit recovery is positive, long-term prospects remain uncertain. Ideal strategy: accumulate cautiously near 900–950 ₹ only if risk appetite is high, otherwise avoid fresh entry. Existing holders should consider partial exit near highs (1,350–1,390 ₹) and reassess based on debt reduction and profitability improvements.