1. At a Glance
Gujarat Ambuja Exports Ltd (GAEL), a corn starch and soya derivative specialist, is marching through agro-processing like a quiet warrior with ₹5,000 Cr market cap muscle. The stock’s got PE of ~20, but margins? Slipping like butter on hot khakra.
2. Introduction with Hook
Imagine a thali with corn, cotton, and edible oils — sounds filling, right? But what if the chef (read: management) kept messing with the recipe?
- GAEL’s 3Y sales CAGR: 0%
- FY25 Net Profit: ₹249 Cr, down from ₹346 Cr in FY24
- Working Capital Days have ballooned from 70 to 133 (!)
The stock is now trading at ₹112 – a long way down from its 52-week high of ₹152. But with 63.84% promoter holding and no debt belly to speak of, this dish might still be digestible.
3. Business Model (WTF Do They Even Do?)
GAEL operates across 5 verticals:
- Corn Processing: Starch, dextrose, sorbitol etc.
- Soya Derivatives: De-oiled cakes, lecithin, refined oils.
- Agri Inputs & Feed Ingredients
- Cotton Yarn
- Edible Oils (via refining)
They serve FMCG, pharma, textiles, and poultry industries across India and export to 75+ countries. If it flows, flakes, or feeds – GAEL’s probably in it.
4. Financials Overview
FY25 vs FY24 Snapshot:
| Metric | FY25 | FY24 |
|---|---|---|
| Revenue (₹ Cr) | 4,613 | 4,927 |
| EBITDA (₹ Cr) | 401 | 443 |
| Net Profit (₹ Cr) | 249 | 346 |
| EBITDA Margin | 9% | 9% |
| Net Margin | 5.4% | 7.0% |
| ROE | 8.64% | 11.4% |
| ROCE | 11.5% | 16.0% |
Growth is stagnating and margins are compressing faster than your local kirana’s WhatsApp credit line.
5. Valuation
- PE Ratio: ~20.6x
- Book Value: ₹65.5
- CMP/BV: 1.70x
- Fair Value Range (PE Method): ₹90–130
- DCF Range Estimate: ₹100–140
- EduInvesting FV Range: ₹95–125
Valuation is reasonable if they can starch up those sagging margins.
6. What’s Cooking – News, Triggers, Drama
- GST + Tax Drama: Three notices totalling ~₹1.3 Cr in tax demands. No material impact claimed, but SEBI Regulation 30 updates are now a monthly ritual.
- Margin Stress: Raw material volatility (corn, soybean) + low OPM.
- Volume Stability: Despite topline dip, the production volumes are steady — signaling price pressure, not demand crash.
- Export Potential: Government PLI or trade treaty tailwinds could help starch things up.
7. Balance Sheet
| Item | FY25 (₹ Cr) |
|---|---|
| Equity Capital | 46 |
| Reserves | 2,956 |
| Total Borrowings | 229 |
| Fixed Assets | 1,179 |
| CWIP | 235 |
| Investments | 938 |
| Cash & Equiv | 341 |
| Total Assets | 3,587 |
Key Points:
- Almost debt-free.
- Significant CWIP & investments – future capacity expansion?
- Book value inching upwards.
8. Cash Flow – Sab Number Game Hai
| Year | CFO | CFI | CFF | Net CF |
|---|---|---|---|---|
| FY25 | ₹341 Cr | -₹336 Cr | -₹13 Cr | -₹8 Cr |
| FY24 | ₹213 Cr | -₹253 Cr | -₹55 Cr | -₹95 Cr |
| FY23 | ₹241 Cr | -₹72 Cr | -₹76 Cr | ₹93 Cr |
Key Points:
- Operating cash flow is positive, but heavily reinvested.
- Rising capex & CWIP explain poor free cash.
- No major equity dilution or debt issuance – self-funded ops.
9. Ratios – Sexy or Stressy?
| Ratio | FY25 | FY24 |
|---|---|---|
| ROCE | 11.5% | 16.0% |
| ROE | 8.64% | 11.4% |
| Inventory Days | 78 | 81 |
| Debtor Days | 28 | 24 |
| CCC (Days) | 89 | 87 |
| Interest Coverage | ~19x | ~25x |
Verdict: Moderately stressy. Inventory levels normal, but returns are sliding.
10. P&L Breakdown – Show Me the Money
| Year | Revenue | EBITDA | PAT | OPM % | NPM % |
|---|---|---|---|---|---|
| FY25 | ₹4,613 Cr | ₹401 Cr | ₹249 Cr | 9% | 5.4% |
| FY24 | ₹4,927 Cr | ₹443 Cr | ₹346 Cr | 9% | 7.0% |
| FY23 | ₹4,909 Cr | ₹476 Cr | ₹330 Cr | 10% | 6.7% |
Declining net profit despite stable revenue = either pricing pressure or cost mismanagement. GAEL, pick a struggle.
11. Peer Comparison
| Company | CMP (₹) | P/E | ROE % | Div Yld | OPM % | Sales (Cr) | PAT (Cr) |
|---|---|---|---|---|---|---|---|
| L T Foods | 501 | 28.8 | 16.8 | 0.38% | 11.3% | 8,681 | 605 |
| KRBL | 407 | 19.6 | 9.4 | 0.93% | 12.1% | 5,593 | 476 |
| Kaveri Seed Co. | 1,105 | 20.1 | 20.6 | 0.44% | 24.1% | 1,204 | 281 |
| GAEL | 112 | 20.5 | 8.6 | 0.31% | 9% | 4,613 | 249 |
| GRM Overseas | 378 | 37.0 | 16.2 | 0.00% | 5.9% | 1,348 | 61 |
GAEL = Undervalued or Underperforming? Either way, not the clear leader.
12. Miscellaneous – Shareholding, Promoters
- Promoter Holding: 63.84% (unchanged since 2022)
- FII Holding: 2.17% (dropped from 5.07% in a year)
- Retail Holding: 33.80%
- Number of Shareholders: Over 1.37 lakh (growing)
Promoters are holding firm, but FIIs are dipping faster than fries in ketchup. Hmm.
13. EduInvesting Verdict™
Gujarat Ambuja Exports is the equivalent of a healthy protein bar – full of promise, but tastes kind of meh right now. It’s nearly debt-free, diversified, and export-ready — but sales are stagnant, margins are leaking, and net profit is on a calorie deficit.
It’s a fundamentally sound stock in an unsexy phase. Turnaround needs pricing power, margin expansion, or product pivot — not just dreams of dextrose.
Metadata
– Written by EduInvesting Research | 18 July 2025
– Tags: Agro Processing, Corn Starch, Gujarat Ambuja Exports, FMCG Inputs, Value Stock, GAEL, Soya Derivatives
