Gulshan Polyols Reports Strong Sales Growth Amid Debt Concerns and Low Profitability

Gulshan Polyols, a small-cap player in the chemicals industry, has recently undergone an adjustment in its evaluation. This revision reflects a shift in the technical trend, moving from a mildly bearish stance to a sideways position. The company has reported positive financial performance for the quarter ending December 2024, with net sales reaching Rs 609.76 crore, marking a growth of 45.9%. Additionally, profit before tax (PBT) less other income has shown a growth of 41.8%, reaching Rs 8.33 crore, while the highest profit before depreciation, interest, and tax (PBDIT) was recorded at Rs 26.73 crore.
Despite these positive indicators, the company faces challenges, including a high debt-to-EBITDA ratio of 6.06 times, which raises concerns about its ability to service debt. Furthermore, the return on equity averages at 3.67%, indicating low profitability relative to shareholders' funds. Over the past year, Gulshan Polyols has generated a return of 3.10%, while its profits have seen a decline of 5.8%. The stock is currently trading at a discount compared to its peers' average historical valuations, suggesting a complex market position.

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