At a Glance
Gujarat Poly Electronics (GPEL) just reported its Q1 FY26 results, and surprise: it made ₹2.8 Cr net profit on ₹4.7 Cr revenue. The stock trades at ₹97 (P/E 18.6), but don’t be fooled—this minnow trades at 7.3x book value, a valuation that would make even Tesla blush. The company also approved a ₹29 Cr property sale, which is literally worth more than its annual sales. Investors, strap in—this capacitor maker is sparking more than just circuits.
1. Introduction
Founded in 1992, GPEL is a niche manufacturer of ceramic capacitors—tiny electronic components with a big attitude. They cater to active and passive electronic markets, also trading diodes through tie-ups with Diotec Semiconductors. While revenue growth is slower than a dial-up connection (5% CAGR in 5 years), the stock has delivered multibagger returns in the past. The catch? High valuations, falling promoter holding, and heavy reliance on other income to juice profits.
2. Business Model (WTF Do They Even Do?)
- Core: Manufacturing & trading ceramic capacitors and varistors.
- Specialty: Low and high voltage single-layer (Disc) and multilayer (MLCC) capacitors in various configurations.
- Other Biz: Distribution of diodes for Diotec.
- Problem: Heavy dependence on imports, low scale, and erratic margins.
This is not an electronic giant—it’s a boutique player surviving on niche orders.
3. Financials Overview
Q1 FY26
- Revenue: ₹4.67 Cr (↑13% YoY)
- EBITDA: ₹0.50 Cr (OPM 10.7%)
- PAT: ₹2.83 Cr (boosted by ₹2.6 Cr other income)
- EPS: ₹3.3
FY25
- Revenue ₹17.8 Cr | PAT ₹2.1 Cr | EPS ₹2.5
Operating business is crawling, but other income keeps the P&L alive.
4. Valuation
- P/E: 18.6 (reasonable… until you see revenue)
- EV/EBITDA: ~35x (rich)
- P/B: 7.3x (crazy for a microcap)
Fair Value Range: ₹55–70 (unless the property sale triggers a rerate).
5. What’s Cooking – News, Triggers, Drama
- ₹29 Cr Property Sale: Yes, they’re selling a property worth 1.5x market cap of the company.
- EGM Scheduled (Sept 1, 2025): To approve sale and increase loan limits from ₹35 Cr to ₹60 Cr.
- Loan Hike: Indicates upcoming capex or expansion moves.
- Promoter Holding: Down from 58% to 52% in 3 years—minor red flag.
6. Balance Sheet
| (₹ Cr) | FY23 | FY24 | FY25 |
|---|---|---|---|
| Assets | 19.0 | 21.6 | 22.6 |
| Liabilities | 10.5 | 12.0 | 10.2 |
| Net Worth | 8.6 | 9.3 | 11.3 |
| Borrowings | 10.2 | 10.2 | 10.2 |
Comment: Borrowings stable, net worth slowly rising, but asset base tiny.
7. Cash Flow – Sab Number Game Hai
| (₹ Cr) | FY23 | FY24 | FY25 |
|---|---|---|---|
| Operating | 0.8 | 2.4 | -0.1 |
| Investing | -0.8 | -0.7 | 0.0 |
| Financing | -0.1 | -0.0 | -0.0 |
Remark: Negative operating cash in FY25 despite profits—classic small-cap anomaly.
8. Ratios – Sexy or Stressy?
| Ratio | FY23 | FY24 | FY25 |
|---|---|---|---|
| ROE | 6% | 21% | 21% |
| ROCE | 10% | 10% | 12% |
| PAT Margin | 10% | 7.9% | 10.8% |
| D/E | 1.0 | 1.1 | 0.9 |
Verdict: ROE is sexy, but driven by other income—not core ops.
9. P&L Breakdown – Show Me the Money
| (₹ Cr) | FY23 | FY24 | FY25 |
|---|---|---|---|
| Revenue | 15.9 | 16.9 | 17.8 |
| EBITDA | 1.1 | 1.3 | 1.9 |
| PAT | 5.3 | 2.1 | 2.1 |
Comment: FY23 PAT was abnormally high due to ₹4.4 Cr other income.
10. Peer Comparison
| Company | Revenue (₹ Cr) | PAT (₹ Cr) | P/E |
|---|---|---|---|
| Apar Inds. | 19,675 | 882 | 44 |
| Shilchar Tech. | 623 | 147 | 41 |
| Gujarat Poly | 17.8 | 2.1 | 19 |
Verdict: Tiny player in a field of giants.
11. Miscellaneous – Shareholding, Promoters
- Promoters: 52.1%
- FIIs/DIIs: Negligible
- Public: 47.9%
- Dividend: None, despite profits.
12. EduInvesting Verdict™
GPEL is a microcap capacitor trader dressed up as a manufacturer. Core revenue barely grows, profits rely on other income, and promoters are slowly diluting stake. However, the ₹29 Cr property sale could unlock value temporarily. Beyond that, valuations (P/B 7.3x) are stretched for a business of this scale.
SWOT Analysis
- Strengths: Niche product line, high ROE (for now), debt under control.
- Weaknesses: Slow growth, dependence on non-core income, high valuation.
- Opportunities: Proceeds from asset sale, potential expansion using raised funds.
- Threats: Volatility in electronic component market, promoter stake decline.
For now, it’s a high-voltage gamble—either sparks a rally post-asset sale or fizzles out.
Written by EduInvesting Team | 29 July 2025
SEO Tags: Gujarat Poly Electronics, Q1 FY26, Capacitor Industry, Microcap Stocks
