Modison (MODISONLTD)

FairStock Score: 60/100 — STEADY

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

Key Financials

Strengths

• ROE 22.35% and low P/E 11.94 with book value ₹63.40
• Strong recent growth: sales +18.56%, profit +95.37%
• Manageable debt/equity of 0.38 and F-score 7
• Promoter holding 52.11% and dividend yield 2.55%

Concerns

• Price 60% below 52-week high suggests market doubts earnings quality
• ROCE 15.48% is lower than ROE, signalling leverage is boosting returns
• Latest quarterly profit margin may not be sustainable if cyclical demand rolls over
• No clear moat visible from the given financials

AI Analysis

A 22.35% return on equity with a book value of ₹63.40 and a debt-equity ratio of 0.38 is not something I see every day. Promoter holding at 52.11% also gives me comfort that owners are thinking like long-term shareholders. At ₹146.13, the stock trades at only 11.94 times earnings and pays a 2.55% dividend. Profit growth of 95.37% on sales growth of 18.56% looks attractive, and the Piotroski F-score of 7 supports the idea that the recent numbers are clean. But I have to pause. The same stock traded at ₹362.70 within 52 weeks. Mr. Market is telling me something. This is likely a cyclical business, and the latest quarter's net profit of ₹20 crore on sales of ₹144 crore implies a margin that may be at a peak. ROCE of 15.48% is respectable but lower than ROE, which shows that leverage is contributing to the return. Debt of 0.38 times equity is manageable, but for an electrical equipment maker, I would want to see how it behaves through a downturn. A PEG of 0.21 only makes sense if 95% earnings growth is sustainable; if it isn't, today's cheap earnings could become tomorrow's expensive P/E. Graham would tell me to buy with a margin of safety, and the balance sheet does provide some cushion. But without an obvious durable moat, I would treat this as a cyclical value opportunity rather than a permanent compounding machine. I would keep the position small and demand proof that margins and returns can hold before committing serious capital.

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