GHCL Ltd.
ISIN: INE539A01019 • Market Cap: ₹4,045 Cr
The 5-Pillar Quality Audit for GHCL Ltd.
Evaluated across Profitability, Financial Health, Historical Compounding, Valuation Safety, and Ownership Governance:
1. Profitability & Capital Efficiency
Weight: 25%Measures operating margins (23.0%), Return on Capital Employed (16.9%), and equity compounding (13.3%).
2. Financial Health & Solvency
Weight: 25%Debt-to-Equity is 0.02 with comfortable interest coverage and clean working capital.
3. Growth & Compounding Track Record
Weight: 20%Historical 3Y Sales CAGR (-12.3%) and 3Y PAT CAGR (-25.5%).
4. Valuation Multiple & Margin of Safety
Weight: 15%Trades at P/E of 8.56 vs PEG of — and Dividend Yield of 2.7%.
5. Ownership Quality & Governance
Weight: 15%Promoter holding stands at 19.8%, backed by 33.6% institutional ownership.
Key Fundamental Strengths
Fortress Balance Sheet (D/E: 0.02)
The company operates virtually debt-free, shielding net margins from interest rate cycles and monetary tightening.
Attractive Valuation Margin (P/E: 8.56)
Trading at a P/E multiple of 8.56, the stock offers a favourable risk-reward entry for quality compounding.
Deep Institutional Sponsorship (33.6%)
Mutual funds, domestic DIIs, and foreign FIIs hold 33.6%, providing strong governance scrutiny.
Areas to Watch & Potential Risks
Topline Stagnation (3Y Sales CAGR: -12.3%)
Revenue growth has slowed below inflation rates, indicating cyclical demand slowdown or saturated core markets.
Sectoral & Macro Headwinds (Chemicals)
Subject to broader cyclical demand, raw material price shifts, and regulatory frameworks governing the Chemicals space.
Quantitative Strategy Eligibility
Checking GHCL against established Indian wealth creation frameworks:
Coffee Can Investing Framework
Fails 10%+ revenue growth or 15%+ minimum capital return benchmark over historical periods.
Quality Factor Screener (High RoIC + Low Debt)
Scorecard of 65/100 or leverage profile sits below strict quality index hurdles.
GARP / Value-Growth Blend
Provides balanced valuation margin with strong profitability scores.
Chemicals Sector Peer Comparison
Compare GHCL directly against top industry peers by market capitalization:
| Company | 5-Pillar Score | Market Cap | P/E | ROCE | D/E | Scorecard |
|---|---|---|---|---|---|---|
| GHCL Ltd. (GHCL)Current | 65/100 | ₹4,045 Cr | 8.56 | 16.9% | 0.02 | — |
| Solar Industries India Ltd. (SOLARINDS) | 80/100 | ₹1.79 Lakh Cr | 89.97 | 30.2% | 0.23 | View |
| Pidilite Industries Ltd. (PIDILITIND) | 75/100 | ₹1.68 Lakh Cr | 63.40 | 28.7% | 0.01 | View |
| SRF Ltd. (SRF) | 73/100 | ₹76,329 Cr | 35.31 | 15.2% | 0.36 | View |
| Coromandel International Ltd. (COROMANDEL) | 72/100 | ₹60,148 Cr | 32.83 | 21.6% | 0.07 | View |
| Linde India Ltd. (LINDEINDIA) | 61/100 | ₹57,146 Cr | 104.59 | 12.2% | 0.00 | View |
Frequently Asked Questions: GHCL Ltd.
Q:What is the 5-Pillar Fundamental Score for GHCL Ltd. (GHCL)?
GHCL Ltd. has a RupeeTools Fundamental Score of 65/100, placing it in the 'Solid & Healthy' category. Its pillar scores are: Profitability (76/100), Financial Health (85/100), Growth (18/100), Valuation (85/100), and Ownership Quality (60/100).
Q:Is GHCL fundamentally strong for long-term investment?
GHCL currently holds a moderate quality rating of 65/100. While it operates in the Chemicals sector, investors should monitor its profit margins before initiating long-term positions.
Q:Does GHCL pass the Coffee Can Investing filter?
No. GHCL does not currently meet the strict 15% ROCE and 10% sustained topline compounding threshold mandated by the Coffee Can investing framework.
Q:How does GHCL compare against other Chemicals peers?
Within India's Chemicals sector, GHCL trades at a P/E of 8.56 and generates an ROCE of 16.9%. Compare its 5-Pillar score of 65/100 against top sector peers like Solar Industries India Ltd. (80/100), Pidilite Industries Ltd. (75/100).
Regulatory & SEBI Research Analyst Compliance Disclaimer:
This 5-pillar fundamental score is an automated quantitative health check generated purely from historical public financial statements, corporate filings, and exchange disclosures for educational and informational purposes only. It does NOT constitute investment advice, a stock recommendation, or a solicitation to buy or sell securities. RupeeTools is not a SEBI-registered Research Analyst. Please consult a SEBI-registered financial advisor before making investment decisions.