Modi Naturals (MODINATUR)

FairStock Score: 55/100 — STEADY

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

Key Financials

Strengths

• Low P/E of 9.84 with 28.39% profit growth yields an attractive PEG of 0.35
• ROCE of 18.66% indicates efficient use of capital despite low ROE
• High promoter holding of 69.09% aligns management interests with minority shareholders
• Piotroski F-Score of 6/9 suggests acceptable financial health
• Latest quarter net profit of ₹10 Cr on ₹174 Cr sales shows a decent 5.7% margin

Concerns

• Sales declined 2.75%, signalling weakening demand and making profit growth less reliable
• P/B of 4.61 is steep against a 7.03% ROE, meaning the asset base is not backing the price
• Debt-to-equity of 1.07 adds financial risk, and zero dividend forces reliance on capital gains
• As a commodity-linked agricultural business, a durable competitive moat is likely absent

AI Analysis

Modi Naturals is a curious case. On the surface, a P/E of 9.84 with 28.39% profit growth seems compelling. But Graham taught me to look beneath the veil. Sales fell 2.75% – that is the first red flag. You cannot cost-cut your way to lasting prosperity. The latest quarter shows ₹10 Cr profit on ₹174 Cr sales, about a 5.7% net margin, which is respectable. Yet book value stands at ₹76.38 while the stock trades at ₹352.20 – 4.61 times book. With an ROE of only 7.03%, you are overpaying for assets that earn little. The 18.66% ROCE is brighter, suggesting the operating business uses capital well, but the 1.07 debt-to-equity ratio dulls that shine. Zero dividend means you are banking entirely on price appreciation – not a Buffett ideal. Promoter holding at 69.09% is a plus; they eat their own cooking. Piotroski score of 6 out of 9? Acceptable, not spectacular. The PEG of 0.35 tells me expectations are low, but low expectations sometimes exist for a reason. In the agricultural products space, moats are rare; pricing is driven by commodity cycles. The 52-week range of ₹252 to ₹489 shows volatility, and at ₹352 you are nearer the lower end, but that alone does not make it cheap. This is a turnaround, not a stalwart. Profit growth while sales shrink often comes from cost discipline or one-off gains. I would want to see the top line stabilise before trusting the bottom line. Graham would demand a margin of safety; I see no dividend, a rich book multiple, and moderate leverage. If the business can hold margins and revive sales, the low P/E provides upside. Until then, I watch from the sidelines.

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