The stock’s performance today showed a mixed picture. Despite the sharp opening decline, Gujarat Petrosynthese outperformed its sector by 3.86% during the trading session. The share price movement was characterised by fluctuations, with the stock closing near its intraday low. This volatility contrasts with the broader market trend, where the Sensex opened flat and traded marginally lower by 0.02%, standing at 84,657.26 points. The Sensex remains close to its 52-week high of 85,290.06, just 0.75% away, supported by bullish moving averages with the 50-day DMA positioned above the 200-day DMA.
Examining the moving averages for Gujarat Petrosynthese reveals that the current price is above the 5-day and 200-day moving averages but remains below the 20-day, 50-day, and 100-day moving averages. This positioning indicates a complex short- to medium-term trend, with the stock struggling to maintain momentum beyond its shorter-term averages.
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Over the past year, Gujarat Petrosynthese’s stock price has declined by 9.06%, contrasting with the Sensex’s positive return of 9.13% over the same period. The stock’s 52-week high was Rs.81.51, highlighting the extent of the recent price contraction. This underperformance is also reflected in the company’s longer-term financial metrics. Net sales have shown a modest annual growth rate of 2.31% over the last five years, while operating profit has averaged 7.50% annually during the same period.
Financial indicators point to challenges in the company’s ability to generate consistent earnings. The average EBIT to interest ratio stands at -0.69, signalling difficulties in servicing debt obligations. Additionally, the company reported operating cash flow of Rs. -3.00 crores in the most recent fiscal year, indicating cash outflows from core business activities. Quarterly earnings per share (EPS) were recorded at Rs.0.54, marking a low point in recent quarters.
Gujarat Petrosynthese’s earnings before interest, taxes, depreciation and amortisation (EBITDA) have been negative, which adds to the risk profile of the stock. Despite the negative EBITDA, the company’s profits have shown a 54% rise over the past year, resulting in a price-to-earnings-to-growth (PEG) ratio of 0.3. However, this has not translated into positive stock returns, as the share price has lagged behind the BSE500 index over the last three years, one year, and three months.
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The company remains majority-owned by promoters, which continues to influence its governance and strategic direction. Despite the stock’s recent price weakness, the broader petrochemicals sector has shown mixed performance, with mid-cap stocks leading the market gains today, as indicated by the BSE Mid Cap index’s marginal increase of 0.02%.
In summary, Gujarat Petrosynthese’s fall to a 52-week low of Rs.51.95 reflects a combination of subdued financial performance, negative cash flow, and challenging debt servicing metrics. The stock’s volatility and position relative to moving averages suggest ongoing uncertainty in its price trajectory. Meanwhile, the broader market environment remains relatively stable, with the Sensex maintaining levels near its yearly highs and mid-cap stocks showing modest gains.
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