Stock Performance and Market Context
Gokul Refoils and Solvent Ltd’s stock has underperformed considerably over the past year, registering a negative return of 27.81%, in stark contrast to the Sensex’s positive gain of 9.61% during the same period. The stock’s 52-week high was Rs.54.79, indicating a substantial drop of approximately 43.3% from that peak. Today’s closing price of Rs.31.07 is also below its key moving averages, including the 20-day, 50-day, 100-day, and 200-day averages, signalling sustained downward momentum. However, it remains slightly above the 5-day moving average.
In comparison, the Sensex opened flat but moved into negative territory, trading at 83,255.50, down 0.03% or 79.48 points. The benchmark index remains 3.49% below its 52-week high of 86,159.02, with the 50-day moving average positioned above the 200-day moving average, suggesting a mixed technical backdrop for the broader market.
Financial Metrics and Fundamental Assessment
Gokul Refoils and Solvent Ltd’s long-term financial indicators reveal areas of concern that have contributed to the stock’s subdued performance. The company has experienced a compound annual growth rate (CAGR) decline of 3.11% in operating profits over the last five years, reflecting pressure on its core earnings capacity. Additionally, the firm’s debt servicing ability is constrained, with a high Debt to EBITDA ratio of 5.09 times, indicating elevated leverage relative to earnings before interest, taxes, depreciation, and amortisation.
Profitability metrics also highlight challenges, with an average Return on Equity (ROE) of 6.54%, which is modest and suggests limited efficiency in generating returns on shareholders’ funds. These factors collectively underpin the company’s current Mojo Grade of Sell, which was downgraded from Strong Sell on 8 December 2025, accompanied by a Mojo Score of 32.0. The market capitalisation grade stands at 4, reflecting its relative size and valuation considerations within the edible oil sector.
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Relative Performance and Valuation
Over the last three years, Gokul Refoils and Solvent Ltd has consistently underperformed the BSE500 index across multiple time frames, including the last three months and one year. This trend underscores the stock’s challenges in keeping pace with broader market and sectoral gains. Despite this, the company’s valuation metrics present a contrasting picture. The stock trades at a discount relative to its peers’ average historical valuations, supported by a Return on Capital Employed (ROCE) of 5%, which is considered very attractive in the current market environment.
The enterprise value to capital employed ratio stands at 1, indicating a valuation level that may appeal to value-focused investors. Furthermore, the company’s Price/Earnings to Growth (PEG) ratio is 0.2, reflecting a low valuation relative to its earnings growth potential. This is notable given that profits have risen by 90.4% over the past year, despite the stock’s negative price return.
Recent Operational and Financial Highlights
Gokul Refoils and Solvent Ltd has reported positive results for four consecutive quarters, with the latest quarterly profit after tax (PAT) at Rs.5.25 crores, representing a growth rate of 43.8% compared to the previous four-quarter average. The company’s cash and cash equivalents reached a high of Rs.119.61 crores in the half-year period, providing a solid liquidity buffer.
Additionally, the debtor turnover ratio for the half-year stood at 26.22 times, the highest recorded, indicating efficient collection of receivables. These operational metrics suggest areas of strength amid the broader challenges faced by the company.
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Shareholding and Sectoral Positioning
The majority shareholding in Gokul Refoils and Solvent Ltd remains with the promoters, maintaining a stable ownership structure. The company operates within the edible oil industry, a sector that has experienced varied performance dynamics in recent times. While the broader sector has seen mixed results, Gokul Refoils’ stock has lagged behind sectoral benchmarks, underperforming by 0.42% relative to the edible oil sector today.
This relative underperformance, combined with the stock’s technical and fundamental indicators, has contributed to the current market sentiment and valuation levels.
Summary of Key Metrics
To encapsulate, Gokul Refoils and Solvent Ltd’s stock has reached a 52-week low of Rs.31.07, reflecting a year-long decline of 27.81%. The company’s financial profile is characterised by subdued long-term profit growth, elevated leverage, and modest returns on equity. Despite these factors, recent quarterly earnings growth, strong cash reserves, and efficient receivables management provide some operational positives. The valuation remains attractive relative to peers, with a low PEG ratio and reasonable enterprise value metrics.
Market participants will note the stock’s current Mojo Grade of Sell, a downgrade from Strong Sell in December 2025, indicating a cautious stance based on the company’s financial and market performance.
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