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MSUMI - Fundamental Analysis: Financial Health & Valuation

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Rating: 3.6

Last Updated Time : 19 Mar 26, 07:10 pm

Fundamental Rating: 3.6

Stock Code MSUMI Market Cap 25,698 Cr. Current Price 38.8 ₹ High / Low 53.6 ₹
Stock P/E 41.3 Book Value 2.78 ₹ Dividend Yield 1.46 % ROCE 42.5 %
ROE 35.9 % Face Value 1.00 ₹ DMA 50 42.8 ₹ DMA 200 43.5 ₹
Chg in FII Hold -0.13 % Chg in DII Hold 0.58 % PAT Qtr 149 Cr. PAT Prev Qtr 165 Cr.
RSI 29.9 MACD -1.29 Volume 1,14,42,159 Avg Vol 1Wk 90,21,779
Low price 31.3 ₹ High price 53.6 ₹ PEG Ratio 4.19 Debt to equity 0.14
52w Index 33.7 % Qtr Profit Var 6.76 % EPS 0.94 ₹ Industry PE 25.0

📊 Financials

  • Revenue & Profitability: PAT fell from ₹165 Cr. to ₹149 Cr., showing short-term weakness. EPS at ₹0.94 remains modest.
  • Margins & Returns: Strong ROCE (42.5%) and ROE (35.9%) highlight excellent efficiency.
  • Debt: Debt-to-equity ratio of 0.14 indicates a very healthy balance sheet.
  • Cash Flow: Stable due to low leverage and consistent profitability.

💹 Valuation

  • P/E Ratio: 41.3 vs Industry PE of 25.0 → Overvalued compared to peers.
  • P/B Ratio: ~14 (Price ₹38.8 / Book Value ₹2.78) → Expensive on book value basis.
  • PEG Ratio: 4.19 → Growth does not justify valuation.
  • Intrinsic Value: Current price trades above fair value estimates.

🏢 Business Model & Competitive Advantage

  • Operates in auto components manufacturing with strong OEM relationships.
  • Competitive advantage lies in scale, efficiency, and established industry presence.
  • Dividend yield of 1.46% provides modest shareholder returns.

📈 Entry Zone & Long-Term Guidance

  • Entry Zone: Attractive near ₹31–34 range (close to 52W low and RSI oversold at 29.9).
  • Long-Term Holding: Suitable for accumulation at lower valuations. Current levels are expensive, so staggered buying is recommended.


✅ Positive

  • High ROCE and ROE indicate strong efficiency.
  • Low debt ensures financial safety.
  • Dividend yield supports investor confidence.

⚠️ Limitation

  • Valuation multiples (P/E, P/B, PEG) are significantly higher than industry averages.
  • Quarterly profit decline signals near-term weakness.

📉 Company Negative News

  • Recent quarterly PAT dropped by ~10% compared to previous quarter.
  • FII holdings reduced (-0.13%), showing cautious foreign sentiment.

📈 Company Positive News

  • DII holdings increased (+0.58%), reflecting domestic institutional confidence.
  • Strong long-term return metrics despite short-term profit dip.

🏭 Industry

  • Auto components sector is cyclical, tied to automobile demand and global supply chains.
  • Industry PE at 25.0 suggests peers are trading at more reasonable valuations.

🔎 Conclusion

  • MSUMI is fundamentally strong with excellent return ratios and low debt.
  • However, valuations are stretched, making current price unattractive for fresh entry.
  • Best strategy: Accumulate near ₹31–34 range for long-term holding, while avoiding aggressive buying at current levels.

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