Motherson Wiring (MSUMI)
StalwartFairStock Score: 68/100 — STEADY
Score breakdown: P/E: 0/3 · ROCE: 2/2 · Growth: 1/2 · Dividend: 0/1
Key Financials
| Current Price | ₹40.35 |
| Market Cap | ₹26,758.76 Cr |
| P/E Ratio | 42.93 |
| ROCE | 42.53% |
| ROE | 36.67% |
| Dividend Yield | 1.44% |
| Profit Growth | 1.55% |
| Debt/Equity | 0.11 |
| Sales Growth | 36.57% |
| Free Cash Flow | ₹304.7 Cr |
| Promoter Holding | 61.72% |
| 52-Week Range | ₹35.7 — ₹53.59 |
| Sector | Auto Components |
| Book Value | ₹3.26 |
Strengths
- Superior capital efficiency with ROE of 36.67% and ROCE of 42.53%
- Low leverage: Debt/Equity of 0.16 and strong Piotroski F-Score of 8/9
- High promoter holding of 61.72% aligns interests with minority shareholders
- Sales growth of 17.79% and positive free cash flow of ₹305 Cr
- Altman Z-Score of 8.85 indicates strong financial stability
Concerns
- Very expensive valuation: P/E of 46, P/B of 15.83, EV/EBITDA of 25.18, and PEG of 2.82
- Profit growth is negative at -1.51% despite healthy sales growth, showing margin pressure
- Price far above Graham Number of ₹7.40 and DCF intrinsic value of ₹6.82, giving a huge negative margin of safety
- Latest quarter net margin is only ~5.2%, leaving little room for cost shocks
AI Analysis
Let me look at Motherson Wiring the way I'd look at any business. It has many qualities I admire: high return on equity of 36.67%, return on capital employed of 42.53%, negligible debt at 0.16 times equity, and a Piotroski score of 8 out of 9. The company generated ₹305 Cr of free cash flow and the Altman Z-score of 8.85 suggests no financial distress. Promoters own 61.72%, so their interests are aligned with mine. These are attributes of a good business. But a good business is not always a good investment. At ₹40.53, the market capitalisation is ₹28,649 Cr, which is 46 times trailing earnings and 15.83 times book value. EV/EBITDA of 25.18 and a PEG of 2.82 tell me the optimism is already baked in. Graham would insist on a margin of safety; here I calculate a negative margin of nearly 484%. The Graham Number is ₹7.40 and even a conservative DCF lands at ₹6.82 — far below the current price. Revenue grew 17.79%, yet profits fell 1.51%, so the expansion is not dropping to the bottom line. Latest quarterly net profit of ₹149 Cr on sales of ₹2,887 Cr is a thin 5.2% margin. I would rather wait for a better price and proof that margins are stabilising before putting my money to work. Patience is the investor's greatest ally.
Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer