GSM Foils Limited

Sector n/a · NSE

₹44.15−₹0.15 (−0.34%)

DalalBaazaar Score

65 / 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, 6:09 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 GSM Foils 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 ₹258 Cr a year. Of every ₹100 of sales, about ₹8 reaches shareholders as profit, with ₹12 left at the operating level before interest, tax and depreciation.

EBITDA margin11.7%

Net margin7.7%

What is its competitive advantage?The numbers suggest a real one

ROCE has stayed above 15% in every year available and stands at 39.9%. Returns that high normally get competed away; when they persist, something is protecting them. What that something is — brand, scale, switching costs, regulation — the accounts cannot tell you.

ROCE39.9%

ROE26.6%

What has been driving growth?

Sales and margins have both contributed to where profit is now. Over 3 years revenue moved +292% while net margin moved +254% 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+292%

Margin effect+254%

DalalBaazaar Score

65/ 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

73/ 100

Good

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

Valuation

88/ 100

Cheap

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

A good business currently available at an undemanding price — the combination this framework is built to look for.

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

3.4x

PEG

—

Dividend Yield

None

What's Good / What's Bad

🟢 What's Going Well5

Margins are improving
EBITDA margin is up from 4.3% to 11.7% over 3 years.
Return on equity is rising
ROE has improved from 17.1% to 26.6%.
Return on capital is rising
ROCE has improved from 28.1% to 39.9%.
High return on capital employed
ROCE of 39.9% 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 Attention4

Debt is rising
Total debt is up 1731% over 3 years — worth checking what it funded.
Free cash flow is negative
The business is not currently covering its capital spending from operations.
Receivables growing faster than sales
Receivables are up 1284% against revenue growth of 292% — customers are taking longer to pay.
Inventory building faster than sales
Inventory is up 753% against revenue growth of 292% — stock may not be moving.

Red Flags

5 items require attention · 5 high

🔴Debt has risen sharplyFinancial
Total debt is up 1731% over 3 years, from ₹2 Cr to ₹44 Cr.
🔴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.
🔴Profit up while operating cash flow fallsFinancial
Reported profit rose but cash generated by operations declined — worth checking whether earnings are being supported by non-cash items or working capital.
🔴Receivables growing faster than salesFinancial
Receivables up 1284% against revenue up 292% — sales are being booked faster than they are collected.
🔴Inventory building faster than salesFinancial
Inventory up 753% against revenue up 292% — stock may not be moving.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Capital compounds at a high rate
ROCE of 39.9% 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 4.3% to 11.7%. 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 1284% against revenue up 292%. 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
5 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 43% a year✓ 57.7% CAGR
Latest reported year was 92.9%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 10%✓ 11.7%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Free cash flow remains positive✗ -₹40 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 1.5x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 37%✓ 39.9%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

6 / 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

₹58 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

26.6%

Strong

Strong capital efficiency

ROCE

39.9%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

0.60x

Low

Conservative leverage

Revenue Growth (YoY)

92.9%

Healthy

Healthy top-line growth

Profit Growth (YoY)

105.5%

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

-₹40 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

CMP

₹44.15

Gross Margin

15.1%

Proxy

Operating margin unavailable — showing gross margin instead

Net Margin

7.7%

Average

Average bottom-line conversion

Current Ratio

1.65

Comfortable

Healthy short-term liquidity

Technical Snapshot

SMA 20 / SMA 50

73.0 / 91.6

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

44.8

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹66 Cr	₹41 Cr	₹134 Cr	₹258 Cr	+57.7%
EBITDA	₹3 Cr	₹2 Cr	₹15 Cr	₹30 Cr	+120.4%
EBITDA Margin	4.3%	5.8%	11.4%	11.7%	—
PAT (Net Profit)	₹1 Cr	₹1 Cr	₹10 Cr	₹20 Cr	+140.3%
EPS	₹1.1	₹1.43	₹7.53	—	—
ROE	17.1%	12.4%	30.9%	26.6%	—
ROCE	28.1%	18.5%	47.8%	39.9%	—
Total Debt	₹2 Cr	₹5 Cr	₹18 Cr	₹44 Cr	+163.6%
Free Cash Flow	-₹0 Cr	-₹14 Cr	-₹19 Cr	-₹40 Cr	—

🟢 Revenue has grown at 57.7% a year over 3 years.

🟢 EBITDA has grown at 120.4% a year over 3 years.

🟢 EBITDA Margin has risen from 4.3% to 11.7% over 3 years (+7.4 pts).

🟢 PAT (Net Profit) has grown at 140.3% a year over 3 years.

🟢 ROE has risen from 17.1% to 26.6% over 3 years (+9.5 pts).

🟢 ROCE has risen from 28.1% to 39.9% over 3 years (+11.7 pts).

🔴 Total Debt has grown at 163.6% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹165 Cr

Total Liabilities

₹91 Cr

Total Debt

₹44 Cr

Cash & Equivalents

₹0 Cr

Operating Cash Flow

-₹37 Cr

Capex

-₹3 Cr

Recent News

1 positive1 mixed4 general

GSM Foils Ltd Key Financial Ratios – Valuation, Profitability & More

Value Research, 31 Aug

GSM Foils Q1 FY26 sales rise to ₹96.69 crore, June sales up 92.9%

scanx.trade, 11 OctResults

🟢Potentially positiveReported improvement. Check whether it came from volume, price or a one-off item before treating it as a trend.

GSM Foils Ltd. Upper Circuit Today: Price, Data and Peers

Univest, 25 Sept

Price Band Hitters, August 20, 2026 at 3:30 PM IST

HDFC Sky, 20 Aug

₹32 crore dispute with partner behind shooting of GSM Foils' MD: Police

Business Standard, 01 Aug

Strong Q1, 20% Stock Crash And A Shooting? The Topsy Turvy Ride For This SME

NDTV Profit, 01 AugResults

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

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 QualityAdequate12.4/20

🟡Financial HealthAdequate12/20

🟢GrowthStrong18.5/20

🟢ProfitabilityStrong11.8/15

🟡ValuationFair7.5/15

🔴RiskHigh2.5/10

Attractive on both counts

A good business currently available at an undemanding price — the combination this framework exists to look for. The work left is qualitative: whether the advantage the numbers imply is one you can identify and expect to last. 5 high-severity red flags sit above this conclusion and should be read first.

This thesis breaks if

✓Revenue growth stays above 43% a year57.7% CAGR
✓EBITDA margin holds above 10%11.7%
✗Free cash flow remains positive-₹40 Cr
✓Debt / EBITDA stays below 2x1.5x
✓ROCE stays above 37%39.9%