MOTHERSON - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 2.8
| Stock Code | MOTHERSON | Market Cap | 1,27,930 Cr. | Current Price | 121 ₹ | High / Low | 136 ₹ |
| Stock P/E | 65.2 | Book Value | 36.2 ₹ | Dividend Yield | 0.47 % | ROCE | 5.16 % |
| ROE | 4.33 % | Face Value | 1.00 ₹ | DMA 50 | 120 ₹ | DMA 200 | 114 ₹ |
| Chg in FII Hold | 0.70 % | Chg in DII Hold | -0.49 % | PAT Qtr | 230 Cr. | PAT Prev Qtr | 732 Cr. |
| RSI | 49.9 | MACD | 2.10 | Volume | 1,79,75,206 | Avg Vol 1Wk | 1,55,45,761 |
| Low price | 86.9 ₹ | High price | 136 ₹ | PEG Ratio | 8.51 | Debt to equity | 0.18 |
| 52w Index | 69.6 % | Qtr Profit Var | 89.0 % | EPS | 1.86 ₹ | Industry PE | 27.3 |
📊 MOTHERSON shows weak fundamentals with very low ROE (4.33%) and ROCE (5.16%), indicating poor efficiency in generating shareholder returns. Valuations are stretched with a high P/E of 65.2 compared to industry PE of 27.3, and PEG ratio of 8.51 highlights expensive growth. EPS remains low at ₹1.86, limiting earnings visibility. Debt-to-equity is comfortable at 0.18, providing financial stability. Current price ₹121 is near its 50 DMA (₹120) and above 200 DMA (₹114), suggesting short-term momentum but limited long-term attractiveness. Entry zone is ideal near ₹105–115 for margin of safety.
💡 Long-term holding is risky unless profitability improves significantly. Exit strategy: partial profit booking near ₹133–136 resistance or full exit if ROE/ROCE remain weak and earnings volatility continues.
Positive
- 📈 Low debt-to-equity ratio (0.18) ensures financial stability.
- 💰 Quarterly profit variation (+89%) shows recovery potential.
- 📊 FII holdings increased (+0.70%), reflecting foreign investor confidence.
Limitation
- ⚠️ Very low ROE (4.33%) and ROCE (5.16%).
- 📉 EPS at ₹1.86 remains weak.
- 📊 High P/E (65.2 vs industry 27.3) and PEG ratio (8.51) indicate overvaluation.
Company Negative News
- 📉 PAT dropped sharply from ₹732 Cr. to ₹230 Cr. QoQ.
- 📊 DII holdings decreased (-0.49%), showing reduced domestic confidence.
Company Positive News
- 📈 Technical momentum supported by price above DMA 50 & 200.
- 📊 RSI at 49.9 and positive MACD (2.10) suggest near-term stability.
Industry
- 🏭 Industry PE at 27.3 highlights MOTHERSON’s relative overvaluation.
- 📈 Auto components sector has long-term demand potential but profitability remains key.
Conclusion
⚖️ MOTHERSON is fundamentally weak with stretched valuations and low profitability metrics. Best accumulated near ₹105–115 for margin of safety. Long-term investors should remain cautious unless ROE/ROCE improve significantly. Exit near ₹133–136 resistance or on further deterioration of earnings.
This structured HTML report captures MOTHERSON’s weak fundamentals, valuation risks, and sector context with clear entry/exit guidance. Would you like me to extend this into a sector overlay benchmarking MOTHERSON against peers like BOSCH, Minda Industries, and Bharat Forge to highlight relative valuation and profitability positioning?