GP Petroleums Limited Stock Analysis

Strong revenue growth of 24.5% YoY in Q3 FY26 (Rs 169.23 crores vs Rs 135.88 crores) and 12.3% YoY for nine months (Rs 479.59 crores vs Rs 426.91 crores), demonstrating robust demand capture / Manufacturing segment shows consistent performance with nine-month revenue of Rs 389.73 crores and segment results of Rs 25.88 crores, maintaining the core business stability / Healthy balance sheet with total assets of Rs 410.91 crores and minimal debt exposure (finance costs only Rs 1.07 crores for nine months), providing financial flexibility for expansion / Trading segment profitability improved significantly with nine-month segment results of Rs 5.8 lakhs versus Rs 9.7 lakhs in prior year, indicating better product mix management / Strong cash generation capability with current tax outflow of Rs 64.54 crores for nine months, suggesting positive operating cash flows despite margin pressures

Significant margin compression with operating profit (before exceptional items) declining 21.2% YoY in Q3 FY26 despite 24.5% revenue growth, indicating severe cost inflation or pricing pressure / Exceptional charge of Rs 194.82 lakhs in Q3 FY26 due to new labor code implementation (Rs 97.20 lakhs additional gratuity + Rs 97.62 lakhs leave encashment) with potential for further adjustments pending rule finalization / Related party transaction risk with the proposed Rs 14.75 crore Savli plant acquisition from New Horizons Asphalt Private Limited where Chairman & MD Ayush Goel is a common director, raising governance concerns / Failed joint venture attempt (announced October 2024, abandoned by February 2026) demonstrates execution challenges and strategic uncertainty in specialty bitumen expansion plans / Employee benefit expenses surged to Rs 84.4 crores in Q3 FY26 versus Rs 85.55 crores in Q3 FY25, representing a disproportionate increase relative to revenue growth and pressuring margins / Material consumption costs rose 7.2% YoY for nine months (Rs 320.90 crores vs Rs 307.45 crores) while revenue grew 12.3%, indicating declining gross margin trajectory

Q3 FY26 revenue from operations increased to Rs 16,923.08 lakh from Rs 13,588.20 lakh, a strong +24.5% YoY growth. / 9M FY26 revenue rose to Rs 47,958.62 lakh versus Rs 42,690.59 lakh (+12.3% YoY), indicating sustained demand momentum. / Manufacturing segment remained profitable with segment result of Rs 927 lakh in Q3 (vs Rs 879 lakh YoY), showing resilience in the core business. / Finance cost stayed contained (Q3: Rs 41.49 lakh; 9M: Rs 107.52 lakh vs Rs 104.91 lakh last year), suggesting no major leverage stress in the reported period. / The proposed Savli specialty bitumen plant acquisition (up to Rs 14.75 crore) is backed by Audit Committee review and an independent valuer, with strategic entry into PMB/CRMB/emulsions.

Q3 PAT declined to Rs 523.52 lakh from Rs 666.92 lakh (-21.5% YoY), and 9M PAT slipped to Rs 1,714.76 lakh from Rs 1,770.87 lakh (-3.2% YoY). / Earnings per share weakened to 1.03 in Q3 from 1.31 YoY, and to 3.36 for 9M from 3.47, indicating pressure on per-share profitability. / Q3 total expenses rose to Rs 16,223.49 lakh from Rs 12,812.90 lakh (+26.6% YoY), outpacing revenue growth and compressing operating profitability. / A one-time exceptional item of Rs 194.82 lakh (Labour Code-related gratuity and leave liabilities) reduced reported Q3 profit and highlights regulatory-cost sensitivity. / Trading segment profitability deteriorated despite higher sales, with Q3 segment result at Rs -80 lakh versus Rs 55 lakh YoY, implying margin/volatility risk in mix shift.