Gokul Agro Resources Receives 'Buy' Rating and Shows Strong Growth in Refined Oil Industry

Gokul Agro Resources, a smallcap company in the refined oil and vanaspati industry, has recently received a 'Buy' rating from MarketsMOJO. This upgrade comes as the company has shown a low Debt to Equity ratio and a healthy long-term growth rate. In fact, its Net Sales have grown by an annual rate of 27.96% and Operating profit at 36.32%. The company has also declared very positive results in June 2024, with a growth in Net Profit of 19.56%. This trend has continued for the last two consecutive quarters, with the company reporting its highest NET SALES(Q) at Rs 4,290.29 cr and PBDIT(Q) at Rs 115.89 cr. Its OPERATING PROFIT TO NET SALES(Q) is also at its highest at 2.70%.
The stock is currently in a bullish range and has shown improvement in its technical trend. Multiple factors, such as MACD, Bollinger Band, KST, and DOW, indicate a bullish outlook for the stock. In the long term, Gokul Agro Resources has outperformed the BSE 500 index and has generated 154.76% returns in the last year. With a market cap of Rs 3,907 cr, it is the second biggest company in the sector and constitutes 22.14% of the entire sector. Its annual Sales of Rs 15,686.66 are 52.33% of the industry.

However, there are some risks associated with investing in Gokul Agro Resources. The company has a high ROCE of 28.6, making it a very expensive valuation with a 4.5 Enterprise value to Capital Employed. The stock is also trading at a premium compared to its average historical valuations. While the stock has generated a return of 154.76% in the past year, its profits have only risen by 28.4%, resulting in a PEG ratio of 0.9.

Another risk to consider is that despite its size, domestic mutual funds hold only 0.18% of the company. This could indicate that they are not comfortable with the current price or the business itself. However, with its positive results and strong market performance, Gokul Agro Resources remains a promising investment opportunity in the refined oil and vanaspati industry.