Gandhar Oil Ref. (GANDHAR)

FairStock Score: 53/100 — MIXED

Score breakdown: P/E: 2/3 · ROCE: 0/2 · Growth: 2/2 · Dividend: 0/1

Key Financials

Strengths

• Price is 1.21 times book value (₹115.60), with P/E of 12.93 and PEG of 0.31, offering a margin of safety if growth sustains.
• Piotroski F-Score of 7/9 suggests improving profitability, asset quality and financial health.
• Low debt/equity of 0.25 gives financial flexibility and limits distress risk.
• Promoter holding of 66.18% aligns management with minority shareholders.
• Sales growth of 16.09% and profit growth of 67.56% show strong current momentum.

Concerns

• ROE of 9.14% and ROCE of 10.59% are modest; this is not a high-quality franchise or durable moat.
• Net margin is thin — latest quarter net profit of ₹34 Cr on ₹1,167 Cr sales is roughly 2.9%, indicating limited pricing power.
• Share price has fallen from ₹303.20 to ₹139.75, signalling adverse market expectations or cyclical pressure.
• Dividend yield of only 0.53% provides negligible income support.

AI Analysis

Let me look at Gandhar Oil Ref. At ₹139.75, I am paying ₹1,375 crore for a business that earns roughly ₹106 crore on a trailing basis — P/E of 12.93. The balance sheet is respectable: debt/equity of 0.25 and book value of ₹115.60, so I am buying at 1.21 times book. That gives some comfort, but I don't buy a business merely for book value. ROE is 9.14% and ROCE is 10.59%. Those are mediocre returns; lubricants is competitive and the latest quarter's net margin is only about 2.9% on sales of ₹1,167 crore. This tells me there is little pricing power. The 67.56% profit growth looks wonderful, but on low returns, and with a 52-week range of ₹115 to ₹303.20, the market has already experienced a violent mood swing. Sales growth of 16% is fine, and the Piotroski F-score of 7 indicates improving fundamentals. Promoter holding of 66.18% is good aligned ownership. The PEG ratio of 0.31 is attractive only if the growth is durable. But I must be careful: rapid profit growth in cyclical businesses often reverses when commodity prices turn. I see a decent, moderately leveraged company with improving numbers, but not a great franchise with a durable moat. At 12.93 times earnings, perhaps there is value, but I would want a larger margin of safety given commodity exposure and modest returns on capital. I will watch whether margins and ROCE can hold or improve before getting excited.

Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer