Recent Price Movements and Market Context
Gandhar Oil Refinery’s stock closed just 0.12% above its 52-week low of ₹128.3, signalling proximity to historic lows. Over the past five trading sessions, the stock has recorded a cumulative decline of 2.36%, continuing a downward trend that has seen it trade below all key moving averages, including the 5-day, 20-day, 50-day, 100-day, and 200-day averages. This persistent weakness contrasts with the broader sector, where the stock’s daily performance of -0.78% slightly underperformed the Sensex’s -0.38% movement on the same day.
Examining the stock’s performance over longer periods reveals a more pronounced divergence from market benchmarks. Over one week, Gandhar Oil Refinery’s shares fell by 2.74%, compared to a 0.93% decline in the Sensex. The one-month period shows a 4.26% reduction in the stock price, while the Sensex recorded a positive 1.00% return. The disparity widens further over three months, with the stock down 13.55% against the Sensex’s 5.27% gain.
Most notably, the stock’s one-year performance stands at -44.50%, a stark contrast to the Sensex’s 4.91% increase. Year-to-date figures also reflect this trend, with Gandhar Oil Refinery’s shares down 39.93% while the Sensex advanced by 8.55%. Over three, five, and ten-year horizons, the stock has shown no appreciable gains, remaining flat, whereas the Sensex has delivered returns of 34.91%, 90.03%, and 227.65% respectively.
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Financial Performance and Growth Trends
Over the past five years, Gandhar Oil Refinery’s net sales have exhibited a compound annual decline of 2.76%, while operating profit has contracted at an annual rate of 21.51%. These figures indicate subdued growth and pressure on profitability over the medium term. The company’s profit after tax (PAT) for the most recent quarter stood at ₹36.06 crores, reflecting a 91.2% increase compared to the previous four-quarter average. This quarterly PAT growth contrasts with the broader trend of declining profitability over the past year, where profits have fallen by 11.6%.
Operating profit to interest coverage for the latest quarter reached 6.41 times, the highest recorded, suggesting an improved ability to meet interest obligations. Net sales for the quarter also peaked at ₹1,059.91 crores, marking the highest quarterly sales figure to date. Despite these quarterly improvements, the overall annual returns and long-term sales trends remain subdued.
Balance Sheet and Valuation Metrics
The company maintains a low average debt-to-equity ratio of 0.10 times, indicating limited leverage relative to equity. Return on capital employed (ROCE) is reported at 10.6%, which is considered attractive within the sector. Additionally, the enterprise value to capital employed ratio stands at 1, suggesting the stock is trading at a discount compared to its peers’ historical valuations.
Shareholding and Market Capitalisation
Promoters remain the majority shareholders of Gandhar Oil Refinery, maintaining significant control over the company’s strategic direction. The stock’s market capitalisation grade is rated at 3, reflecting its standing within the market capitalisation spectrum.
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Comparative Performance Within the Sector
Gandhar Oil Refinery’s performance has lagged behind the BSE500 index over the last three years, one year, and three months. While the broader market indices have delivered positive returns, the stock has remained flat or negative, underscoring its relative underperformance within the oil sector and the wider market.
Summary of Current Situation
The stock’s proximity to its all-time low, combined with its sustained underperformance relative to major indices, highlights a challenging environment for Gandhar Oil Refinery. Despite some quarterly improvements in profitability and sales, the longer-term trends in net sales and operating profit suggest subdued growth. The company’s low leverage and attractive valuation metrics provide some balance to the overall picture, but the stock remains under pressure in the current market context.
Market Capitalisation and Trading Trends
With a market capitalisation grade of 3, Gandhar Oil Refinery is positioned within a moderate segment of the market. The stock’s trading activity over recent periods has been characterised by declines, with the share price consistently below all major moving averages, signalling a bearish trend. This pattern reflects investor caution and the stock’s challenges in regaining upward momentum.
Conclusion
Gandhar Oil Refinery (India) currently faces a significant valuation low, with its stock price near historic troughs. The company’s financial data over multiple periods reveals a complex picture of limited growth and profitability pressures, despite some positive quarterly results. The stock’s performance relative to key market indices and sector peers underscores the difficulties it has encountered in recent years.
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