Mangalam Cement (MANGLMCEM)

FairStock Score: 33/100 — RISKY

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

Key Financials

Strengths

• Profit growth of 54.93% and PEG of 0.56, if sustained, signal improving earnings momentum
• Debt/equity of 0.82 and Piotroski F-score of 6/9 suggest manageable financial risk
• Latest quarter remained profitable: ₹421 Cr sales, ₹11 Cr net profit
• Book value of ₹298.53 provides some asset backing despite the high P/B

Concerns

• P/E at 30.71 and P/B at 3.09 are rich relative to ROE/ROCE near 10%
• Sales declined 3.88%; latest quarter net margin only ~2.6%, showing weak operating leverage
• Dividend yield is negligible at 0.17%; promoter holding at 40% does not signal very strong alignment
• Debt/equity of 0.82 adds risk in a cyclical, capital-intensive business

AI Analysis

At ₹923, Mangalam Cement sells at 30.7 times earnings and 3.09 times book. That is a demanding price for a business earning only 9.74% on equity and 9.87% on capital. In a commodity like cement, a mediocre return on capital tells me there is no wide moat; any excess profit gets competed away. The latest quarter underlines the reality: ₹421 crore of sales produced just ₹11 crore of profit, a margin near 2.6%. The 54.93% profit growth and PEG of 0.56 look attractive, but I have learned to distrust percentage earnings jumps from a low base in a cyclical business. Sales are still down 3.88%, so this is not compounding demand. Financial health is acceptable, not superb: debt/equity at 0.82 and a Piotroski score of 6 out of 9, but the 0.17% dividend yield gives me nothing for waiting. I value owner earnings and the ability to generate cash through a cycle. At this price, the market is paying for perfection in a business whose operating returns are merely average. Graham would ask for margin of safety; I do not see one. The company may be a decent asset with improving operations, but the valuation leaves no room for a down-cycle in cement prices or volumes. I would need sales growth to return, operating margins to expand materially, and the balance sheet to get stronger before I consider this a serious candidate. FairStock at 41/100 also tells me the fundamentals are mixed. This is a cyclical stock, not a compounding stalwart, and I would watch it, not buy it.

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