Gokul Agro (GOKULAGRO)
StalwartFairStock Score: 58/100 — STEADY
Score breakdown: P/E: 2/3 · ROCE: 2/2 · Growth: 1/2 · Dividend: 0/1
Key Financials
| Current Price | ₹231.65 |
| Market Cap | ₹6,835.68 Cr |
| P/E Ratio | 16.26 |
| ROCE | 34.2% |
| ROE | 32.48% |
| Dividend Yield | 0% |
| Profit Growth | 59.77% |
| Debt/Equity | 0.41 |
| Sales Growth | 9.78% |
| Promoter Holding | 74.24% |
| 52-Week Range | ₹151 — ₹259.5 |
| Sector | Agricultural Food & other Products |
| Book Value | ₹48.11 |
Strengths
- High return ratios: ROE 32.48% and ROCE 34.20%.
- Sales growth of 26.58%, with latest quarterly sales of ₹6,314 Cr.
- Conservative leverage: debt/equity of 0.48 and Piotroski F-Score of 7/9.
- Promoter holding of 74.24% aligns interests and reflects insider conviction.
- P/E of 16.73 is not stretched if earnings growth can be sustained.
Concerns
- Very thin net margin: ₹78 Cr net profit on ₹6,314 Cr sales is roughly 1.2%.
- Profit growth of 7.17% is far below sales growth of 26.58%, indicating margin pressure.
- P/B of 8.73 leaves no margin of safety; dividend yield is 0.00%.
- Stated PEG of 0.99 conflicts with trailing profit growth; on trailing earnings it is closer to 2.33.
AI Analysis
Gokul Agro is a business I can understand—a processor and seller of edible oil—but understanding it immediately reveals commodity economics. In the latest quarter, sales of ₹6,314 Cr produced just ₹78 Cr of net profit. That is a net margin of roughly 1.2%. In a category where oil prices swing, such thin margins leave little cushion; the moat is paper thin. The 26.58% sales growth sounds exciting, yet profit growth is only 7.17%. As Graham warned, sales growth without commensurate earnings growth is often just growth in effort. The balance sheet is acceptable: debt/equity of 0.48, Piotroski F-Score of 7, and promoter holding of 74.24% aligning owners with management. The 32.48% ROE and 34.20% ROCE are impressive numbers. But at ₹225.95, the market is paying 8.73 times book for these returns. That is not a Graham-style margin of safety. A P/E of 16.73 is not extreme, and the stated PEG of 0.99 looks tempting—but using the trailing profit growth of 7.17%, the PEG is closer to 2.33. The 0.00% dividend yield means the investor depends entirely on capital gains. I would not call this a wonderful business; it is a decently managed, financially sound but commodity-exposed operation. FairStock’s 'Steady' score of 57/100 seems fair: not terrible, but hardly a compounding machine. If margins stay under pressure, today’s high ROE may not survive. I would want proof that profit growth has caught up with sales before treating this as a value buy.
Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer