Modi Rubber (MODIRUBBER)

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

Key Financials

Strengths

• Trades at a price-to-book of 0.79, with price ₹133.07 versus book value ₹168.05.
• Very low debt-to-equity of 0.03 indicates a conservative balance sheet.
• Promoter holding is high at 62.20%, aligning interests with minority shareholders.
• Latest quarter shows positive net profit of ₹5 Cr, though sales are small.

Concerns

• Sales down 29.07% and profit down 17.93%, indicating a shrinking business.
• ROE is negative at -1.49% and ROCE is only 3.28%, showing weak capital efficiency.
• Piotroski F-Score of 3/9 suggests poor financial health.
• Reported free cash flow is deeply negative and no dividend is paid.

AI Analysis

Modi Rubber fails what I call the quality test. Sales have fallen by 29%, profit is down nearly 18%, return on equity is negative at -1.49%, and return on capital employed is just 3.28%. There is no dividend, and the reported free cash flow of -₹5.05 lakh Cr is a red flag, especially for a company with a market cap of only ₹293 Cr. A Piotroski score of 3 out of 9 adds to my caution. Paying 18.68 times earnings for a business with shrinking sales and weak returns is not the mark of a great investment. The latest quarter's sales of just ₹7 Cr and net profit of ₹5 Cr raise questions about sustainability and earnings quality, not confidence. What makes me pause is the balance sheet. Book value is ₹168.05 per share, while the price is ₹133.07, so the stock trades at 0.79 times book. Debt-to-equity is very low at 0.03, and promoters hold 62.2%, so there is little leverage and significant insider ownership. This is the classic Graham asset-play setup: a stock selling below book value with a clean balance sheet. But a discount to book is only a margin of safety if the book value is real and can be realised. A negative ROE, declining sales, and negative free cash flow suggest this company may be destroying value while appearing cheap. I would not call this a compounder or a stalwart. It is an asset play, perhaps a possible turnaround, but only if management proves it can generate acceptable returns from this book value. Until then, the discount is not enough for me to call it a wonderful business at a fair price.

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