MSTC (MSTCLTD)

FairStock Score: 61/100 — STEADY

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

Key Financials

AI Analysis

AI-generated, general educational analysis — not personal investment advice.

Let's begin with the obvious. MSTC earns 29.84% on equity and 29.26% on capital employed, with a debt-to-equity ratio of only 0.17. That is a high-quality financial profile. At ₹442.60, the P/E is 14.17 and the P/B is 4.38. I am normally wary of paying 4.38 times book for a trading business, but when the book can be compounded at 30%, the premium is less frightening—provided the returns hold. Sales grew 8.98% and profit grew 13.47%, so the PEG ratio of 1.26 is reasonable but not dramatically cheap. Promoter holding at 64.75% is reassuring; the owners have skin in the game. The Piotroski F-score of 7/9 also supports the balance-sheet quality. However, I see two troublesome numbers. The latest quarter has sales of only ₹88 crore and net profit of ₹51 crore. That is a 58% net margin. A trading/distribution company achieving such margin is unusual and demands explanation. If this is fee income, treat it differently from trading turnover. Equally important, the dividend yield is 8.86% against a P/E of 14.17, implying the dividend payout is over 100% of earnings. No company can do that forever without cutting dividends, resorting to debt, or using one-time gains. Growth is steady, not explosive. This looks like a well-run stalwart, not a fast grower. I would need to see sustainable margins and dividend coverage before buying. At the right price, it could be a fine compounding machine, but today the margin of safety is thin for my taste.

The full AI analysis, bull and bear case and key monitorables are in FairStock Pro.

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