Gulshan Polyols Ltd is Rated Hold by MarketsMOJO

Understanding the Current Rating

The 'Hold' rating assigned to Gulshan Polyols Ltd indicates a balanced stance for investors, suggesting that the stock is fairly valued at present and may not offer significant upside or downside in the near term. This rating was established on 03 Nov 2025, when the company’s Mojo Score improved from 46 to 62, moving the grade from 'Sell' to 'Hold'. The current Mojo Score of 62 reflects a moderate confidence level in the company’s prospects based on a comprehensive evaluation of multiple parameters.

Quality Assessment

As of 14 February 2026, Gulshan Polyols Ltd exhibits an average quality grade. The company’s ability to generate returns on equity remains modest, with an average Return on Equity (ROE) of 5.17%, signalling relatively low profitability per unit of shareholders’ funds. Additionally, the firm faces challenges in servicing its debt, as indicated by a high Debt to EBITDA ratio of 4.65 times. This elevated leverage ratio suggests a cautious approach is warranted, as the company’s long-term growth prospects are constrained by its debt burden. Operating profit has grown at an annualised rate of 16.26% over the past five years, which, while positive, is not sufficiently robust to offset the risks associated with its financial structure.

Valuation Perspective

The valuation grade for Gulshan Polyols Ltd is currently very attractive. The stock trades at a discount relative to its peers’ historical valuations, with an Enterprise Value to Capital Employed (EV/CE) ratio of just 1.3. This low valuation multiple suggests that the market may be underestimating the company’s intrinsic value. Furthermore, the company’s Price/Earnings to Growth (PEG) ratio stands at a remarkably low 0.1, reflecting strong profit growth relative to its price. Despite the stock’s negative return of -12.93% over the past year, the company’s profits have surged by 215.6% during the same period, underscoring the disconnect between market price and underlying earnings performance.

Financial Trend and Recent Performance

Financially, Gulshan Polyols Ltd demonstrates an outstanding grade. The latest data as of 14 February 2026 shows that the company has delivered strong results in recent quarters. Net sales for the latest six months reached ₹1,134.95 crores, growing at an impressive rate of 26.81%. The company declared a remarkable 163.36% growth in net profit in September 2025, marking two consecutive quarters of positive results. Return on Capital Employed (ROCE) for the half-year period stands at a healthy 8.68%, while the operating profit to interest coverage ratio is a robust 5.14 times, indicating the company’s improved ability to meet interest obligations from operating earnings.

Technical Outlook

From a technical standpoint, the stock is mildly bearish. Despite recent gains—such as a 24.85% increase over the past week and a 14.42% rise in the last month—the stock’s six-month performance shows a slight decline of 1.43%. Year-to-date, the stock has appreciated by 14.05%, but the one-year return remains negative at -12.93%. This mixed technical picture suggests some short-term volatility and caution for traders, while longer-term investors may find the current valuation and financial improvements encouraging.

What This Means for Investors

The 'Hold' rating for Gulshan Polyols Ltd advises investors to maintain their current positions without initiating new purchases or sales at this time. The company’s very attractive valuation and strong financial trends provide a foundation for potential future gains, but the average quality and mild technical headwinds temper enthusiasm. Investors should monitor the company’s debt servicing capacity and profitability improvements closely, as these factors will be critical in determining whether the stock can transition to a more favourable rating in the future.

Summary of Key Metrics as of 14 February 2026

• Mojo Score: 62.0 (Hold)
• Debt to EBITDA Ratio: 4.65 times
• Operating Profit Growth (5 years annualised): 16.26%
• Return on Equity (average): 5.17%
• Net Profit Growth (latest quarter): 163.36%
• Net Sales Growth (latest six months): 26.81%
• ROCE (Half Year): 8.68%
• Operating Profit to Interest Coverage (Quarterly): 5.14 times
• Enterprise Value to Capital Employed: 1.3
• PEG Ratio: 0.1
• Stock Returns: 1D -0.25%, 1W +24.85%, 1M +14.42%, 3M +7.59%, 6M -1.43%, YTD +14.05%, 1Y -12.93%

Conclusion

Gulshan Polyols Ltd’s current 'Hold' rating reflects a nuanced investment case. The company’s very attractive valuation and outstanding financial trends provide a solid base for investors, while average quality metrics and mild technical caution suggest a wait-and-watch approach. Investors should keep a close eye on the company’s debt management and profitability improvements, which will be key drivers for any future rating changes. For now, maintaining existing positions while monitoring developments appears prudent.

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