Megatherm Indu. (MEGATHERM)

FairStock Score: 46/100 — MIXED

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

Key Financials

Strengths

• ROCE of 21.13% indicates efficient use of capital and potential pricing power.
• Profit growth of 29.32% with a P/E of 16.70 gives an attractive PEG of 0.91.
• Promoter holding of 71.85% aligns management interests with minority shareholders.
• Piotroski F-score of 7/9 suggests decent financial health on multiple fundamental checks.
• Latest quarter net profit of ₹12 Cr on sales of ₹159 Cr shows a reasonable net margin for an industrial products company.

Concerns

• Sales growth is only 7.50%, so the 29.32% profit growth may depend on margin expansion or cost cuts that could be difficult to sustain.
• Dividend yield is 0.00%, so shareholders receive no cash income while waiting for growth.
• Book value, ROE, and debt/equity are not available, leaving balance-sheet risk partially unmeasured.
• Small market cap of ₹401 Cr may lead to price volatility and thin liquidity.

AI Analysis

At ₹282.50, Megatherm trades at 16.7 times earnings. That is not expensive, but I do not buy cheapness alone; I buy business quality at a fair price. The most encouraging number is ROCE of 21.13%—this tells me the company earns a solid return on the capital it employs. The Piotroski F-score of 7/9 also supports the idea of a financially sound business. Promoters own 71.85%, which is the kind of owner commitment I admire. However, a value investor must be honest about what is missing. I do not have book value, return on equity, or debt-to-equity figures. I cannot fully judge the balance sheet's strength. The company pays no dividend, so my return depends on growth and eventual market re-rating. Sales growth is only 7.50%, yet profit has grown 29.32%. That gap can come from margin expansion, operating leverage, or one-off items. In an industrial products business, such a gap is not automatically a moat. A wide-moat company should be able to grow sales without sacrificing margins; here, the top line lags. At 16.7 times earnings with a PEG of 0.91, the market is paying a reasonable price for the recent profit growth. If Megatherm can maintain a 21% ROCE and convert modest sales growth into high-teens earnings growth, this small-cap could compound well. But 52-week range of ₹170 to ₹329.50 reminds me volatility is high and liquidity may be thin. I would want to study the balance sheet, cash flow, and order book before buying. The figures are encouraging, but not conclusive. A margin of safety still matters.

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