Gayatri Rubbers and Chemicals Limited

Sector n/a · NSE

₹369.95+₹14.95 (+4.21%)

DalalBaazaar Score

73 / 100

🟢 Good

Verdict

REASONABLE

Risk

High

Driven by negative free cash flow, micro-cap size, which brings thin liquidity.

In simple words: Strong business and financial position, with both sales and profits growing well. Cash generation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:07 pm

Mixed / neutral. No major red flags jump out, but nothing here screams "obviously cheap" either. This is a name that needs a peer comparison and a view on near-term earnings triggers before sizing a position.

Understanding the Business

The 60-second version of Gayatri Rubbers and Chemicals Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

How does it make money?

Turns over ₹42 Cr a year. Of every ₹100 of sales, about ₹13 reaches shareholders as profit, with ₹21 left at the operating level before interest, tax and depreciation.

EBITDA margin20.9%

Net margin13.4%

What is its competitive advantage?Some evidence

ROCE of 40.1% is above what capital typically costs, which suggests some pricing power, though not yet the sustained, wide gap that marks a durable advantage.

ROCE40.1%

ROE28.4%

What has been driving growth?

Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved +88% while net margin moved +225% relative to itself. What this cannot tell you is which products, customers or geographies did the work — that lives in the segment disclosures of the annual report.

Revenue effect+88%

Margin effect+225%

DalalBaazaar Score

73/ 100

Good

Weighted across six categories. Every point is explained below.

✗ Micro Cap: thinner liquidity and sharper drawdowns are normal
✗ Profits have swung sharply from year to year — earnings are hard to forecast
✗ Negative free cash flow means dependence on external funding

Quality vs. Valuation

Company Quality

84/ 100

Excellent

How good the business is, ignoring the share price entirely.

Valuation

18/ 100

Expensive

What you are being asked to pay, ignoring how good the business is.

A good business, but the price already reflects that. The quality is real; the question is whether you are overpaying for it today.

vs. its own history

Not enough price and earnings history

vs. sector peers

Not enough peers with a usable P/E

vs. generic bands

No P/E available

P/E (Trailing)

—

P/B

—

EV/EBITDA

25.1x

PEG

—

Dividend Yield

None

What's Good / What's Bad

🟢 What's Going Well5

Margins are improving
EBITDA margin is up from 7.4% to 20.9% over 3 years.
Return on equity is rising
ROE has improved from 9.4% to 28.4%.
Return on capital is rising
ROCE has improved from 14.7% to 40.1%.
High return on capital employed
ROCE of 40.1% is the mark of a business that converts capital into profit efficiently.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention3

Free cash flow is negative
The business is not currently covering its capital spending from operations.
Receivables growing faster than sales
Receivables are up 108% against revenue growth of 88% — customers are taking longer to pay.
Inventory building faster than sales
Inventory is up 506% against revenue growth of 88% — stock may not be moving.

Red Flags

3 items require attention · 2 high · 1 watch

🔴Free cash flow negative for 4 yearsFinancial
The business has not covered its capital spending from operations for several years running, which has to be funded externally.
🔴Inventory building faster than salesFinancial
Inventory up 506% against revenue up 88% — stock may not be moving.
🟡Receivables growing faster than salesFinancial
Receivables up 108% against revenue up 88% — sales are being booked faster than they are collected.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Capital compounds at a high rate
ROCE of 40.1% means each rupee reinvested earns well above what capital costs. If the company can keep deploying at this rate, growth creates value rather than just consuming cash.
Margin expansion has further to run
EBITDA margin has risen from 7.4% to 20.9%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
Earnings have proved durable
Profitable in every one of the last 4 reported years. Consistency lowers the risk that any single bad year is structural rather than cyclical.

🔴 Bear CaseWhat could go wrong?

Sales are being booked faster than collected
Receivables are up 108% against revenue up 88%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
Earnings are hard to forecast
Profit has swung sharply from year to year, so any single year — good or bad — is a weak guide to the next. Cyclical earnings deserve lower multiples for that reason.
Size brings its own risk
Micro Cap businesses are thinly traded, so exits are harder in a falling market and single events move the price more than they would for a larger company.
Several serious flags at once
2 high-severity checks triggered. Individually each has an explanation; together they raise the chance that something structural is wrong rather than a one-off.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1Revenue growth stays above 18% a year✓ 23.5% CAGR
Latest reported year was 31.0%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 19%✓ 20.9%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Free cash flow remains positive✗ -₹3 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 0.8x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 37%✓ 40.1%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

8 / 9 checks passed

✓ Strong return on equity (ROE ≥ 15%)
✓ Strong return on capital employed (ROCE ≥ 15%)
✓ Healthy net margin (≥ 10%)
✗ Generates positive free cash flow
✓ Manageable leverage (Debt/Equity < 1.0)
✓ Adequate short-term liquidity (Current Ratio ≥ 1.0)
✓ Revenue growing year-over-year
✓ Profit growing year-over-year
✓ Short-term technical trend isn't bearish

Price history

Quick Metrics

5 good · 5 neutral · 1 weak

Market Cap

₹212 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

Not available

No data

Source didn't return this field

P/B Ratio

Not available

No data

Source didn't return this field

EPS (TTM)

Not available

No data

Source didn't return this field

ROE

28.4%

Strong

Strong capital efficiency

ROCE

40.1%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

0.35x

Low

Conservative leverage

Revenue Growth (YoY)

31.0%

Healthy

Healthy top-line growth

Profit Growth (YoY)

96.2%

Healthy

Profits growing at a healthy clip

Dividend Yield

None

No dividend yield reported — usually means no payout, but verify if one was recently initiated

Free Cash Flow

-₹3 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

CMP

₹369.95

Gross Margin

36.3%

Proxy

Operating margin unavailable — showing gross margin instead

Net Margin

13.4%

Good

Strong bottom-line conversion

Current Ratio

2.24

Comfortable

Healthy short-term liquidity

Technical Snapshot

SMA 20 / SMA 50

572.0 / 556.4

Bullish alignment (short > long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

49.5

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹22 Cr	₹24 Cr	₹32 Cr	₹42 Cr	+23.5%
EBITDA	₹2 Cr	₹3 Cr	₹5 Cr	₹9 Cr	+74.6%
EBITDA Margin	7.4%	11.0%	14.8%	20.9%	—
PAT (Net Profit)	₹1 Cr	₹2 Cr	₹3 Cr	₹6 Cr	+82.9%
EPS	₹1.78	₹2.72	—	—	—
ROE	9.4%	13.8%	20.2%	28.4%	—
ROCE	14.7%	20.0%	28.7%	40.1%	—
Total Debt	—	₹1 Cr	₹3 Cr	₹7 Cr	—
Free Cash Flow	-₹7 Cr	-₹2 Cr	-₹2 Cr	-₹3 Cr	—

🟢 Revenue has grown at 23.5% a year over 3 years.

🟢 EBITDA has grown at 74.6% a year over 3 years.

🟢 EBITDA Margin has risen from 7.4% to 20.9% over 3 years (+13.5 pts).

🟢 PAT (Net Profit) has grown at 82.9% a year over 3 years.

🟢 ROE has risen from 9.4% to 28.4% over 3 years (+19.0 pts).

🟢 ROCE has risen from 14.7% to 40.1% over 3 years (+25.3 pts).

Balance Sheet & Cash Flow — FY2026

Total Assets

₹32 Cr

Total Liabilities

₹12 Cr

Total Debt

₹7 Cr

Cash & Equivalents

₹0 Cr

Operating Cash Flow

₹0 Cr

Capex

-₹4 Cr

Recent News

1 mixed5 general

Gayatri Rubbers and Chemicals Upper Circuit Today

Univest, 16 Oct

With EPS Growth And More, Gayatri Rubbers and Chemicals (NSE:GRCL) Makes An Interesting Case

Simply Wall Street, 25 Aug

Gayatri Rubbers And Chemicals Ltd. Key Financial Ratios – Valuation, Profitability & More

Value Research, 21 Sept

This Defence and Aerospace Penny Stock Hits 5% Upper Circuit After ISRO Order for EPDM Rubber; Check Details

Dalal Street Investment Journal, 21 Aug

Gayatri Rubbers and Chemicals Limited Schedules Post-Earnings Conference Call for FY26 Results on May 5, 2026

scanx.trade, 29 AprResults

🟡Mixed / dependsA results event. The figures on this page update once the new statements reach the data feed, which usually lags the announcement.

Gayatri Rubbers and Chemicals (NSEI:GRCL) - Stock Analysis

Simply Wall Street, 08 Feb

Watch Items

Cross-check against the company's latest quarterly filing / investor presentation before acting.
Sector/industry classification unavailable — verify manually for peer comparison.
3 metrics couldn't be retrieved for this stock — this is more common for smaller or thinly-covered listings.

DalalBaazaar Thesis

🟢Business QualityStrong16.7/20

🟢Financial HealthStrong14.5/20

🟢GrowthStrong18.5/20

🟢ProfitabilityStrong12.9/15

🟡ValuationFair7.5/15

🔴RiskHigh2.5/10

Good business, demanding price

The quality is real and the price already reflects it. Buying here is a bet that the business keeps compounding for long enough to grow into the multiple — which good businesses often do, but it removes the margin for error that a lower price would have given you. 2 high-severity red flags sit above this conclusion and should be read first.

This thesis breaks if

✓Revenue growth stays above 18% a year23.5% CAGR
✓EBITDA margin holds above 19%20.9%
✗Free cash flow remains positive-₹3 Cr
✓Debt / EBITDA stays below 2x0.8x
✓ROCE stays above 37%40.1%