Mangalam Global (MGEL)

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

Key Financials

Strengths

• Sales grew 50.58% and profit grew 22.98%, showing strong momentum
• ROE of 19.03% and ROCE of 16.75% indicate capital-efficient operations
• Piotroski F-Score of 7/9 suggests solid financial health
• Promoter holding of 71.46% aligns management with minority shareholders
• P/E of 13.12 and PEG of 0.36 make valuation reasonable if growth sustains

Concerns

• Latest quarter net margin is razor-thin: ₹9 Cr profit on ₹756 Cr sales (~1.2%)
• Profit growth of 22.98% lags sales growth of 50.58%, implying margin compression
• Debt/equity of 0.87 is notable for a low-margin commodity business
• Reported FCF of ₹88,036 Cr is anomalous versus market cap of ₹364 Cr and needs reconciliation

AI Analysis

At ₹13.96, Mangalam Global’s ₹364 crore market cap looks interesting, but I need to understand what I’m buying. The business grows: sales up 50.58%, profits up 22.98%, and at 19.03% ROE it earns attractive returns on equity without extreme leverage—debt/equity is 0.87, manageable though not debt-free. The Piotroski F-Score of 7/9 also tells me the balance sheet isn’t deteriorating. What worries me is the quality of these earnings. Latest quarter sales of ₹756 crore produced only ₹9 crore net profit—a net margin of barely 1.2%. That is a razor-thin, high-turnover commodity business, likely with limited pricing power. The 50% sales growth with only 23% profit growth confirms that margins are being squeezed; not all sales are equal. The moat? I don't see one yet. Agricultural products are commoditized, and any temporary export or crop cycle can distort both revenue and earnings. The reported free cash flow of ₹88,036 crore is absurd versus a ₹364 crore market cap—I would treat that number as a red flag in need of reconciliation, not a gift. Valuation at 13.12 times earnings and 2.5 times book is not unreasonable for a 23% profit grower, and the PEG of 0.36 suggests the market is pricing no growth. But the ₹9.53 to ₹18.40 range reminds me this is a volatile small cap. With promoters holding 71.46%, I like alignment, but the 0.09% dividend yield means patient investors are paid nothing to wait. I'd want to see several more quarters of margin stability and real cash conversion before investing.

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