📆 CMP ₹69.2 | Market Cap ₹889 Cr | Book Value ₹11.9 | ROE -2.93%
✍️ Written by Prashant | 📅 July 5, 2025

1. At a Glance (Excerpt)

Gujarat Natural Resources Ltd (GNRL) looks like it should be drilling for oil. Instead, it’s mostly burning cash, diluting equity, and making operational press releases that sound like wishful geology. Promoter holding is just 1.93%, return ratios are negative, and yet the stock is up 500% in 1 year.

2. 🛢️ Intro – Oil Explorers, Hope Sellers

GNRL operates oil and gas blocks in the Cambay Basin through its step-down subsidiary, GNRL Oil & Gas Ltd. They:

• Have 6 producing blocks (on paper)
• Are operators in 5
• Are midway through a 5-well and 7-well drilling campaign
• Just “discovered” 20m oil & wet gas in one well
• Want to pivot into solar (yes, suddenly)

But when you dig past the headlines… it’s mostly losses, dilution, and vague optimism.

3. 🧬 Business Model – Oil? Gas? Maybe Vapour.

🎯 Core activity:

• Upstream oil & gas exploration in Gujarat (Cambay basin)
• Operator through GNRL Oil & Gas Ltd
• Trades in oil-related goods (marginal activity)

📌 Blocks don’t generate meaningful cash yet
📌 7-well drilling campaign cost: ₹69 Cr — unclear funding
📉 Every year ends in net loss despite rising revenues

4. 📊 Financials – Leakages Everywhere

✅ OPM improved to 20% in FY24
🚨 But profits stayed negative every single year
🧻 EPS negative since the dinosaurs last roamed Cambay

5. 💸 Valuation – Looks Cheap? Nope.

• No P/E – losses galore
• P/B: 5.8x → absolutely unjustified
• ROE: -2.93% (and that’s an improvement)
• Promoter Holding: 1.93% 🤯
• Fair Value Range Calculation:

📉 Assuming normalized PAT of ₹5 Cr (fantasy) × 10x = ₹50 Cr → FV ~ ₹4/share
📉 Even with ₹10 Cr PAT optimism, FV = ₹8/share
EduInvesting FV Range: ₹4–₹8/share
🎯 CMP ₹69.2 is 10x over fair zone

6. 🧨 What’s Cooking – Mostly Press Releases

• ✅ Claimed 40 million cubic metres of gas reserves at K#12
• 🚜 7-well campaign started pre-monsoon
• 🪙 Rights issue worth ₹48.5 Cr in Nov 2024
• 💸 Raised capital via equity warrants
• ☀️ MOA amended for solar power business
• 🤐 Actual production & monetisation? Still MIA.

7. 🧾 Balance Sheet – Diluted, Not Cleaned

📉 Reserves are falling despite rights issues
📉 Equity base ballooned from ₹56 Cr → ₹128 Cr
📌 Cash from ops in FY25: -₹30 Cr
🤔 Where did the money go?

8. 💵 Cash Flow – No Gusher Here

🩸 FY25 is bleeding cash
📉 OCF turned deeply negative despite higher revenue
🎯 No visibility on returns from Capex

9. 📐 Ratios – Returns in Reverse Gear

• ROCE: -0.57%
• ROE: -2.93%
• OPM: 7.58% in FY25 (was 20.2% in FY24)
• Debtor Days: ~36 days (okayish)
• Interest Coverage: Low → company barely covers finance cost

🧨 Cost of borrowing is high despite low debt
📉 Most years have negative returns

10. 📈 P&L Breakdown – Hope Sells, Oil Doesn’t

📌 Without other income, losses would be even worse
📌 60–70% of profits lost to depreciation and interest
📉 Operating leverage not playing out

11. 🆚 Peer Comparison – The Contrast is Wild

🧠 GNRL is trading at a premium to ONGC and Oil India in P/B terms
🚩 That’s SME delusion on steroids

12. 👥 Shareholding – Promoter? Barely Present

• 📉 Promoters: 1.93%
• 🌍 FII: 0.21% (tiny)
• 🧑‍🤝‍🧑 Public: 97.85%
• 📉 Promoter stake dropped from 12.76% (Sep 2022) → 1.93%
• 📈 Shareholders increased from 5,400 → 16,900 in 2 years
  👉 Retail frenzy with no skin in the game from promoters

13. 🧑‍⚖️ EduInvesting Verdict™

GNRL is a microcap illusion dressed up as an oil explorer.
It’s got:

• 🚫 No promoter skin
• 💰 No consistent cash flow
• 📉 Negative returns
• 🛢️ No production updates worth monetizing

Yet… it’s up 500% in a year.
That’s not exploration. That’s exploitation — of retail hope.

🎯 EduInvesting FV Range: ₹4–₹8/share
🔥 CMP ₹69.2 is a fantasy premium
⛏️ Until there’s cash from oil, this one’s just running on fumes

Tags: Gujarat Natural Resources, GNRL, Cambay Basin, Oil Exploration India, Microcap Red Flag, Promoter Dump, Solar Diversion, EduInvesting Analysis