@Kumar_manas - Thank you for the extensive coverage of this stock.
Here is some analysis.
- P&L Analysis
In last few years , GPIL never made loss at operating income level. Sales are always higher than expenses. In 2016 and 2017, Net Profit is negative due to interest cost incurred for the debt of ~2000 Cr. Now that the debt is almost reduced, it is very much likely that Net Profit will be positive.
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The company is having debt of 428 Cr and Cash Equivalents of 575 Cr. The Capex is estimated to be 500 Cr and management guided that it will be taken care by way of internal accruals(No debt). Traditionally, cyclical industries struggle due to interest expense during downtime but it is not the case with GPIL this time.
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Company is focusing only on core business and as mentioned by @VALUE2017, the management seems to be share-holder friendly and continues till today.
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At EV/EBITDA < 1.6, it is at its cheapest valuation.
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In last 5 years, GPIL increased its market share from 0.58% to 0.8%. Got this from ticket tape but not sure.
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The tax rate is reduced to 25% by government which was not there earlier and positive for GPIL
Now, what is it that market is discounting for this stock?
- Is it that the target addressable market is saturated for GPIL or going to reduce?
- Are there any mandatory expenses for the company even if there are no sales? Something similar to graphite electrode companies like HEG/Graphite India
- Is there any impending law suit GPIL or one of its subsidiaries are involved with?
- As mentioned in this thread about merchant miners not able to afford the captive mines, will there be any change of policy from government to favour the economy/general public?
Request the esteemed members who are tracking GPIL with the answers. Thanks.
Disc - Invested in last few days at EV/EBITDA of ~1.6. PF.