⚠ Disclaimer: This report is generated using AI tools and is for informational purposes only. It does not constitute investment advice. Please consult a registered financial advisor before making any investment decisions.
MOTHERSON - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 3.0
| Stock Code | MOTHERSON | Market Cap | 1,24,150 Cr. | Current Price | 118 ₹ | High / Low | 136 ₹ |
| Stock P/E | 63.3 | Book Value | 36.2 ₹ | Dividend Yield | 0.48 % | ROCE | 5.16 % |
| ROE | 4.33 % | Face Value | 1.00 ₹ | DMA 50 | 121 ₹ | DMA 200 | 112 ₹ |
| Chg in FII Hold | -0.24 % | Chg in DII Hold | 0.59 % | PAT Qtr | 230 Cr. | PAT Prev Qtr | 732 Cr. |
| RSI | 43.5 | MACD | -2.21 | Volume | 1,65,04,568 | Avg Vol 1Wk | 2,16,81,288 |
| Low price | 71.5 ₹ | High price | 136 ₹ | PEG Ratio | 8.26 | Debt to equity | 0.18 |
| 52w Index | 71.5 % | Qtr Profit Var | 89.0 % | EPS | 1.86 ₹ | Industry PE | 25.0 |
📊 Financial Overview
- Revenue & Profit Growth: Quarterly PAT fell sharply from ₹732 Cr. to ₹230 Cr. (down 69%).
- Margins: ROE at 4.33% and ROCE at 5.16% → weak efficiency.
- Debt: Debt-to-equity ratio of 0.18 → low leverage, balance sheet stable.
- Cash Flow: Stable but pressured by declining profits.
- Return Metrics: EPS at ₹1.86, very low earnings power.
💹 Valuation Indicators
- P/E Ratio: 63.3 vs Industry PE of 25.0 → highly overvalued.
- P/B Ratio: Price ₹118 / Book Value ₹36.2 ≈ 3.26.
- PEG Ratio: 8.26 → expensive relative to growth.
- Intrinsic Value: Current valuation stretched, limited margin of safety.
🏢 Business Model & Competitive Advantage
- Operates in auto components manufacturing with global presence.
- Competitive advantage lies in scale, diversified client base, and OEM partnerships.
- Challenges include margin pressures, cyclical demand, and weak profitability.
📈 Entry Zone Recommendation
- Technicals: RSI at 43.5 (neutral), MACD negative, price below 50DMA (121) but above 200DMA (112).
- Entry Zone: Accumulation possible near ₹110–115 for long-term investors.
- Holding Guidance: Suitable for patient investors; long-term holding requires earnings recovery.
✅ Positive
- Low debt-to-equity ratio (0.18).
- DII holdings increased (+0.59%).
- Global presence and diversified client base.
⚠️ Limitation
- Weak ROE (4.33%) and ROCE (5.16%).
- High P/E (63.3) compared to industry average (25.0).
- EPS very low at ₹1.86.
📉 Company Negative News
- PAT dropped from ₹732 Cr. to ₹230 Cr.
- FII holdings decreased (-0.24%).
- Technical indicators (MACD negative) show bearish sentiment.
📈 Company Positive News
- DII confidence increased (+0.59%).
- Stock trading above 200DMA shows some resilience.
- Global auto demand recovery could support future growth.
🌐 Industry
- Auto components industry is cyclical but benefits from global demand recovery.
- Industry PE at 25.0 indicates sector trades at lower valuations compared to MOTHERSON.
- EV adoption and global OEM partnerships provide long-term opportunities.
🔎 Conclusion
- MOTHERSON shows strong global presence but suffers from weak profitability and high valuation.
- Valuations are stretched, limiting near-term upside.
- Best considered for long-term investors with entry near ₹110–115; holding depends on earnings recovery and margin improvement.