Gopal Snacks (GOPAL)

FairStock Score: 35/100 — MIXED

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

Key Financials

Strengths

• Debt/Equity of 0.15 shows a conservative balance sheet
• Promoter holding at 81.47% aligns management with minority shareholders
• Piotroski F-Score of 7/9 indicates decent financial health and earnings quality signals
• ROCE of 16.31% suggests acceptable operating capital efficiency

Concerns

• P/E of 105.08 and P/B of 7.73 leave no margin of safety
• Reported ROE of 0.95% is extremely poor for shareholders
• Sales growth of 1.83% is weak; profit growth of 190.04% appears base-effect driven
• Latest quarter net margin is only about 3.7%, which is thin and vulnerable to competition

AI Analysis

When I look at Gopal Snacks, I first ask whether I am buying a business or a story. The story is profit growth of 190.04%; the business is a top line growing just 1.83%. That gap is a red flag. The market is paying ₹3,720 Cr for a company whose trailing earnings justify a P/E of 105.08. Benjamin Graham taught me to treat high multiples as the enemy. At a P/B of 7.73 against book value of ₹35.87, I am paying far more than the assets behind the business. Reported ROE is only 0.95%, meaning shareholder equity is earning almost nothing. ROCE of 16.31% is better on an operating basis, but I would want to understand why so little flows down to equity. The latest quarter shows sales of ₹401 Cr and net profit of ₹15 Cr, a thin net margin of about 3.7%. In packaged snacks, such margins can be squeezed by raw material costs and competition. Debt/equity of 0.15 is conservative, and promoter holding of 81.47% keeps management aligned. The Piotroski score of 7/9 suggests financial health is not deteriorating. But a healthy balance sheet is not the same as an undervalued stock. The PEG of 0.73 relies on profit growth that appears to come from a low base, so I cannot trust it. Dividend yield of 0.34% gives me almost no return while I wait. Packaged snacks is a fiercely competitive, low-moat business unless there is strong brand loyalty and distribution. The sales growth figure shows no such pricing power. At ₹277.30, there is no margin of safety. This is a high-priced slow grower, and I would pass.

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