Modern Dairies (519287)

Score breakdown: P/E: 3/3 · ROCE: 0/2 · Growth: 0/2 · Dividend: 0/1

Key Financials

Strengths

• Low headline P/E of 3.94 offers cheapness if earnings stabilize.
• Latest quarter sales of ₹87 Cr with a positive net profit of ₹1 Cr shows some earning base.
• Stock is near its 52-week high of ₹51.89, indicating recent market interest.
• Small market cap of ₹120 Cr leaves room for operational turnaround if execution improves.

Concerns

• ROE of -41.10% and ROCE of 0.00% indicate serious value destruction.
• Profit growth is down 37.76% and sales growth is negative at -1.44%.
• Piotroski F-score of 2/9 suggests weak financial health and higher distress risk.
• Missing book value, debt/equity, and promoter holding data make a thorough Graham-style analysis impossible.

AI Analysis

At ₹51.65, Modern Dairies looks like a classic value trap. The ₹120 Cr market cap against a 3.94 P/E seems cheap, but I have learned that a low multiple can be deserved when earnings are deteriorating. Sales fell 1.44%, profit fell 37.76%, and latest quarter net profit is only ₹1 Cr on ₹87 Cr sales—a razor-thin margin. Return on equity is -41.10%, and ROCE is zero. That is not a business with pricing power; it is a commodity dairy processor struggling to earn its cost of capital. The Piotroski F-score of 2/9 reinforces my caution: this is a company with weak fundamentals, not a hidden gem. I also lack book value, debt/equity, and promoter holding data. In Benjamin Graham's words, investing without these facts is speculation. The stock trades near its 52-week high of ₹51.89, but price momentum is not a substitute for economic value. Dairy in India is, at best, a competitive and fragmented business, and Modern Dairies shows no moat: no margin strength, no growth, no return on capital. A P/E of 3.94 assumes earnings will recover, but with profit growth down 37.76% and an F-score of 2, I see no margin of safety. I would only revisit this if I saw a genuine turnaround: improving quarterly margins, positive ROCE, and a clean balance sheet. Until then, this remains a pass. As Warren Buffett says, it is far better to buy a wonderful business at a fair price than a fair business at a wonderful price. Modern Dairies is not wonderful.

Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer