1. At a Glance
Gayatri Rubbers & Chemicals Ltd (GRCL) has pivoted from just rubber to a spicy mix of neoprene gaskets, smart meter enclosures, and Indian Railways contracts. With 83% PAT growth in FY25 and a sky-high PE of 78, the stock smells like an SME rocket… but is it Michelin-starred or just over-fried?
2. Introduction with Hook
Take your average rubber gasket, sprinkle in a few smart meter enclosures, throw in an Indian Railways work order every month, and boom—you’ve got Gayatri Rubbers, the Frankestein of Capital Goods.
- TTM PAT Growth: 83%
- PE: 78x
- FY25 Sales: ₹31.91 Cr
A ₹200 Cr market cap company bagging ₹2.4 Cr in orders in one month? Either the story’s just beginning, or we’re already at dessert.
3. Business Model (WTF Do They Even Do?)
GRCL’s business is a rubbery hybrid:
- Reclaimed Rubber, Rubber Chemicals – Industrial-grade supply.
- Neoprene, EPDM, Sponge Gaskets – For Railways, meters, and switchgears.
- Smart Meter Enclosures & RMC Switchgears – New vertical in power infra.
They’re not just making rubber sheets—they’re putting that rubber into your smart meter, bus station, and substation. Respect.
4. Financials Overview
| Particulars | FY23 | FY24 | FY25 |
|---|---|---|---|
| Revenue (₹ Cr) | 22.21 | 24.41 | 31.91 |
| EBITDA (₹ Cr) | 1.73 | 2.73 | 4.69 |
| EBITDA Margin (%) | 7.79% | 11.18% | 14.70% |
| Net Profit (₹ Cr) | 0.91 | 1.56 | 2.85 |
| EPS (₹) | 1.59 | 2.72 | 4.97 |
| ROE (%) | — | — | 22.5% |
Margins doubling in two years.
Revenue CAGR ~31%.
But PE? 78x. Price’s running like it’s on synthetic rubber soles.
5. Valuation
Let’s do the number dance:
- PE Valuation (Fair PE: 30x on FY25 EPS ₹4.97)
FV = ₹149 - EV/EBITDA (20x FY25 EBITDA ₹4.69 Cr)
EV = ₹94 Cr → FV = ₹160–180 per share - Gasketed DCF (15% CAGR, 12% discount rate)
FV Range = ₹150–175
Current Price = ₹388
Verdict: Overvalued by 2x+ — unless they bag orders like samosas on a rainy day.
6. What’s Cooking – News, Triggers, Drama
- ₹2.4 Cr+ work orders in Apr 2025 from Indian Railways & Smart Meter firms
- 50% PAT CAGR target next 2 years (announced June 2025)
- New verticals: RMC switchgear boxes, SMC enclosures
- Explosive growth: FY25 Sales up 30%, PAT up 83%
- SME capex story: They’re still bootstrapped but aggressive
This is no sleepy gasket shop—it’s a high-voltage industrial cocktail.
7. Balance Sheet
| Metric | FY23 | FY24 | FY25 |
|---|---|---|---|
| Equity Capital | 5.74 | 5.74 | 5.74 |
| Reserves | 3.97 | 5.53 | 8.38 |
| Borrowings | 0.00 | 0.52 | 2.68 |
| Total Liabilities | 10.62 | 12.86 | 19.55 |
| Fixed Assets | 1.18 | 2.31 | 2.48 |
| Other Assets | 9.44 | 10.55 | 17.07 |
- Debt creeping up, but still light
- Reserves doubled in 2 years
- Fixed asset base low = light manufacturing + outsourced ops?
8. Cash Flow – Sab Number Game Hai
| Year | CFO (₹ Cr) | CFI (₹ Cr) | CFF (₹ Cr) | Net CF |
|---|---|---|---|---|
| FY23 | -5.21 | -1.40 | 8.60 | 1.99 |
| FY24 | -0.31 | -1.47 | 0.20 | -1.58 |
| FY25 | -1.47 | -0.65 | 1.73 | -0.39 |
- Operating cash flow remains weak despite PAT surge
- Most expansion funded by fresh equity & loans
- No dividend, no FCF yet
9. Ratios – Sexy or Stressy?
| Ratio | FY23 | FY24 | FY25 |
|---|---|---|---|
| ROCE | — | 22.4% | 29.8% |
| ROE | — | — | 22.5% |
| OPM (%) | 7.8% | 11.2% | 14.7% |
| Inventory Days | 47.9 | 82.3 | 151.1 |
| Debtor Days | 74.1 | 75.1 | 76.3 |
| CCC (Days) | 113 | 147 | 195.6 |
ROCE & ROE? Chef’s kiss.
Inventory days? Yikes.
They’re stockpiling like Doomsday preppers.
10. P&L Breakdown – Show Me the Money
| Year | Sales (Cr) | EBITDA (Cr) | PAT (Cr) | EPS (₹) |
|---|---|---|---|---|
| FY23 | 22.21 | 1.73 | 0.91 | 1.59 |
| FY24 | 24.41 | 2.73 | 1.56 | 2.72 |
| FY25 | 31.91 | 4.69 | 2.85 | 4.97 |
- PAT CAGR: 83%
- Gross margins improving quarter-on-quarter
- Expense discipline visible
11. Peer Comparison
| Company | CMP (₹) | PE | ROCE (%) | Sales (Cr) | PAT (Cr) |
|---|---|---|---|---|---|
| Pix Transmission | 1,542 | 18.6 | 26.9 | 589 | 112.9 |
| Tinna Rubber | 912 | 33.3 | 28.6 | 505 | 49.3 |
| GRP Ltd | 2,625 | 44.8 | 17.5 | 550 | 31.2 |
| Gayatri Rubber | 388 | 78.2 | 29.8 | 31.9 | 2.85 |
GRCL has better margins but is tiny in size.
The valuation is already pricing in a 5x growth dream.
12. Miscellaneous – Shareholding, Promoters
| Category | Mar ’23 | Mar ’24 | Mar ’25 |
|---|---|---|---|
| Promoters | 73.37% | 73.37% | 73.37% |
| Public | 26.63% | 26.63% | 26.63% |
| Shareholders | 169 | 123 | 194 |
- Solid promoter holding = confidence
- Public base increasing = early institutional eyes incoming
- No FII/DII yet = still virgin territory for funds
13. EduInvesting Verdict™
Gayatri Rubbers is like a rubber bullet—it looks soft but hits hard. The company is transforming from a simple gasket maker into a smart-meter allied infra play, with real order wins and strong operating leverage.
But at 78x PE, you’re buying into 5 years of perfect execution, zero screw-ups, and massive demand continuity.
Execution risk? High.
Valuation? Too high.
Potential? Surprisingly high.
If they hit ₹50 Cr sales and ₹7–8 Cr PAT in 2 years… this rerates again.
If not? Well, hope you like rubbery outcomes.
Metadata
– Written by EduInvesting Team | July 13, 2025
– Tags: Gayatri Rubbers, SME Stock, Rubber Gaskets, Smart Meters, High PE, Industrial Growth, Smallcap Watchlist, Indian Railways Orders
