Gokul Refoils (GOKUL)

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

Key Financials

Strengths

• High promoter holding of 72.81% aligns management with minority shareholders
• Piotroski F-Score of 7/9 indicates improving financial health
• Large scale with quarterly sales of ₹1,076 Cr
• Sales growth of 6.84% shows modest top-line stability
• Positive net profit after a sharp profit growth of 805.17%

Concerns

• ROE of only 1.98% and ROCE of 8.40% signal poor capital efficiency
• Latest quarter net profit of ₹5 Cr on sales of ₹1,076 Cr implies razor-thin margins
• Debt-to-equity of 0.97 leaves little margin of safety for a commodity cycle
• P/E of 20.72 with zero dividend yield makes valuation reliant on uncertain future growth

AI Analysis

At first glance, Gokul Refoils looks cheap, but a Graham buyer has to dig into the numbers. Return on equity is just 1.98%, and ROCE is 8.40%. For a company with debt-to-equity of 0.97, that is a weak return on borrowed money. The latest quarter tells the real story: ₹1,076 crore in sales produced only ₹5 crore in net profit. That is a net margin of less than half a percent. This is a high-volume, low-margin edible oil business, and I see no wide moat, pricing power, or brand-driven advantage in these figures. The 805% profit growth looks exciting, but it is from a tiny base, and a PEG ratio of 0.05 is therefore misleading. A business earning ₹5 crore in a quarter cannot justify a P/E of 20.72 without clear evidence of sustainable margin expansion. Book value is ₹20.79, so at ₹40.20 the stock trades at 1.93 times book for a company with sub-2% ROE. There is no dividend, so minority investors are entirely dependent on capital gains. To be fair, promoter holding is high at 72.81%, aligning interests, and the Piotroski F-Score of 7 suggests recent financial improvement. Sales grew 6.84%, showing modest stability. But with debt-to-equity at 0.97 and razor-thin margins, the balance sheet has little room for error. I would classify this as a cyclical commodity refiner, not a growing franchise. I need sustained higher returns on capital, lower leverage, and proof that margins can stay above the break-even line before I would consider parting with my money.

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