1. At a Glance
If there was an Oscar for “Most Confusing Combination of Exploration and Valuation,” Gujarat Natural Resources Ltd (GNRL) would already be giving its acceptance speech. The ₹1,227 crore market-cap oil explorer is currently trading at ₹95.5 — with a P/E ratio that makes even AI startups look humble at 771x. That’s right — it’s producing oil, but the real gas here is in the valuation.
In Q2 FY26, the company reported revenue of ₹8.65 crore and PAT of ₹3.84 crore, showing an insane 935% YoY profit growth. Yet, the return ratios — ROE (-2.87%) and ROCE (-0.56%) — look like they’ve been drilled straight into the loss-making Cambay basin.
And did we mention? The promoters are holding a glorious 1.93%, down from over 10% a few quarters back. Investors, if you blink, even the promoter might have exited.
But wait — in true Gujarati entrepreneur fashion, GNRL just completed a K#17 well in the Kanawara Field, discovering a 24-meter hydrocarbon zone. Oil, drama, and a P/E of 771? Grab your popcorn — this basin’s getting spicy.
2. Introduction
GNRL is like that student who was always under the radar, suddenly starts topping one subject (Q2 PAT up 935%), but still fails half the exam (ROE negative, working capital days 1,386).
Incorporated in 1991, Gujarat Natural Resources Ltd ventured into the glamorous world of oil & gas exploration — long before “energy transition” became the new boardroom yoga mantra. Through its step-down subsidiary GNRL Oil & Gas Limited (formerly Heramec Ltd), it operates six producing blocks in the Cambay basin, being the operator in five.
The company’s revenue pie looks simple: 93% from oil & gas, 5% from interest income, and 2% from “other mysterious income.”
And yet, investors aren’t here for the fundamentals. They’re here for the thrill — the Bollywood meets OPEC story of a smallcap explorer drilling deeper into hope than hydrocarbons.
So how does an oil explorer with negative ROE, low promoter holding, and a 771x P/E manage a 377% one-year return? Simple — Indian retail FOMO is the most renewable energy source on earth.
3. Business Model – WTF Do They Even Do?
Imagine a Gujarati family deciding to explore for oil instead of opening another textile shop. That’s Gujarat Natural Resources Ltd.
The company plays in the upstream oil & gas exploration space — the “digging holes and praying for crude” part of the industry. GNRL doesn’t refine, distribute, or retail fuel — it just digs, produces, and sells. The heavy lifting happens through GNRL Oil & Gas Ltd, which has operational stakes in Kanwara, North Kathana, Allora, Dholasan, North Balol, and Unawa fields — all part of the Cambay basin, Gujarat’s own mini-OPEC.
GNRL also provides technical advisory services to its subsidiaries through a consultancy tie-up with Ajapa Integrated Project Management Consultancy Pvt Ltd, which handles drilling project management.
Basically:
- Subsidiaries dig
- the wells
- Ajapa advises on how not to mess it up
- GNRL consolidates the numbers and tells shareholders “We struck oil!”
They also have related-party arrangements worth ₹100 crore with entities like Ashoka Metcast, Ashnisha Industries, Lesha Industries, and Rhetan TMT — all of which seem to exist in the same Ahmedabad ecosystem of industrial siblings.
So while the company claims to find oil, one can’t help but wonder — are they exploring hydrocarbons or synergies between family companies?
4. Financials Overview
| Metric | Latest Qtr (Sep’25) | YoY Qtr (Sep’24) | Prev Qtr (Jun’25) | YoY % | QoQ % |
|---|---|---|---|---|---|
| Revenue (₹ Cr) | 8.65 | 4.93 | 3.35 | 75.5% | 158.2% |
| EBITDA (₹ Cr) | 4.84 | 1.70 | 0.27 | 184.7% | 1,692.6% |
| PAT (₹ Cr) | 3.84 | -0.46 | 1.93 | 934.8% | 99.0% |
| EPS (₹) | 0.30 | -0.04 | 0.15 | — | 100% |
Annualised EPS = ₹0.30 × 4 = ₹1.20.
At CMP ₹95.5, that’s a P/E of 79.6, not 771 (which probably reflects trailing net losses). Either way, that’s like paying for diesel and getting perfume.
Commentary:
Revenue doubled, profit exploded, and EPS revived — but the balance sheet still looks like it came out of a stress test. For a company this small, even one successful well can change everything — or nothing, depending on how fast they burn through the oil money.
5. Valuation Discussion – Fair Value Range Only
Let’s attempt the unthinkable: value this chaos.
(a) P/E Method:
Assume EPS ₹1.2 (annualised Q2)
Industry P/E (Oil Exploration) ≈ 17.4
→ Fair Value = 1.2 × 17.4 = ₹20.88 per share.
(b) EV/EBITDA Method:
EV/EBITDA = 126 currently (lol)
Industry average ≈ 6×
EBITDA (annualised) = ₹4.84 × 4 = ₹19.36 Cr
→ EV (fair) = 19.36 × 6 = ₹116 Cr
→ Per share ≈ ₹9
(c) DCF Method (Simplified):
Assume annual free cash flow of ₹5 Cr growing 10% for 5 years, discount rate 12%.
→ PV ≈ ₹20–25 Cr.
→ Per share ≈ ₹15–20.
So even the most optimistic models yield a fair value range of ₹9–₹21, compared to a current price of ₹95.5.
Disclaimer: This fair value range is for educational purposes only and not investment advice.
6.
