Mamata Machinery (MAMATA)

FairStock Score: 15/100 — RISKY

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

Key Financials

Strengths

• ROE of 39.19% and ROCE of 34.92% show exceptional capital productivity.
• Debt/Equity of 0.04 means minimal leverage and a strong balance sheet.
• Promoter holding of 62.45% aligns management with minority shareholders.
• Latest quarter remains profitable: ₹8 Cr net profit on ₹67 Cr sales, maintaining roughly 12% margins.
• Book value of ₹57.08 provides some asset backing despite the premium valuation.

Concerns

• Sales declined -8.47% and profit declined -10.26%, showing weak demand or execution.
• Piotroski F-Score of 3/9 indicates deteriorating financial and operating health.
• Valuation is rich at P/E of 25.54 and P/B of 7.09, leaving little margin of safety.
• Dividend yield of 0.11% offers negligible downside support, and the FairStock Score of 12/100 flags high risk.

AI Analysis

Let me begin with the obvious: Mamata Machinery earns excellent returns on capital. ROE of 39.19% and ROCE of 34.92%, with virtually no debt at D/E of 0.04, is impressive. That tells me the business has genuine earning power. But a value investor cannot live on historical returns alone. Sales are down 8.47%, profits are down 10.26%, and the latest quarter's net profit of ₹8 Cr on ₹67 Cr sales does not show a visible rebound. The Piotroski F-Score of 3 out of 9 is a red flag; it suggests deteriorating operating efficiency, asset turnover, or financial condition beneath the surface. The balance sheet is safe, but the entry price is not cheap. At ₹404.60, the market cap is ₹1,077 Cr, and the P/E is 25.54 even after the earnings decline. A P/B of 7.09 against book value of ₹57.08 means I am paying a huge premium for that book. The dividend yield of 0.11% offers almost no compensation while I wait. In the Graham tradition, I ask for margin of safety. Here, the business quality is real but cyclical, and the current downcycle has not been priced in—it has been capitalised. The 52-week range of ₹297 to ₹515 shows how volatile this machinery demand can be. With promoter holding at 62.45%, I respect alignment, but that alone does not justify the valuation. At a FairStock Score of 12/100, this is accurately labelled risky. I would need a much lower price, or clear evidence of a durable growth recovery, before I would be tempted. For now, this is a business to watch, not a stock to buy.

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