MSUMI - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 20 Dec 25, 11:15 pm

Fundamental Rating: 3.7

• 📈 Revenue Growth: Quarterly PAT improved from ₹143 Cr to ₹165 Cr (+8.72%), showing steady growth
• 💰 Profit Margins: Strong efficiency with ROE at 35.9% and ROCE at 42.5%
• ⚖️ Debt Ratio: Debt-to-equity at 0.14, low leverage
• 💵 Cash Flows: EPS of ₹0.92, modest relative to valuation
• 📊 ROE/ROCE: Excellent efficiency, well above industry averages
• 📉 Valuation: P/E 51.5 vs Industry PE 30.0, significantly overvalued
• 📚 Book Value: ₹2.78, P/B ~17.1, premium valuation
• 📈 PEG Ratio: 5.23, indicates stretched valuation relative to growth
• 🚗 Business Model: Leading auto component manufacturer with focus on wiring harnesses, safety systems, and EV solutions
• 🛡️ Competitive Advantage: Strong OEM relationships, global presence, and diversified product portfolio across auto ancillaries

Positive

• ✅ Strong ROE (35.9%) and ROCE (42.5%)
• ✅ Low debt-to-equity ratio (0.14)
• ✅ Quarterly PAT growth (+8.72%)
• ✅ Institutional support with DII holdings increased (+0.35%)

Limitation

• ⚠️ High P/E ratio (51.5) compared to industry average (30.0)
• ⚠️ PEG ratio at 5.23 indicates poor growth relative to valuation
• ⚠️ EPS of ₹0.92 is modest given market cap
• ⚠️ FII holdings reduced (-0.10%)

Company Negative News

• 📉 Valuation stretched with high P/E and P/B multiples
• 📉 Reduction in foreign institutional investor holdings

Company Positive News

• 🌍 Expansion in EV component and safety systems
• 💡 Quarterly profit improvement vs previous quarter
• 📈 Increased DII holdings (+0.35%)

Industry

• 💹 Industry PE at 30.0, MSUMI trades at a steep premium
• 📈 Auto component sector supported by rising demand for EVs and advanced safety systems

Conclusion

MSUMI shows strong fundamentals with excellent ROE/ROCE and steady profit growth, but valuations are stretched with high P/E, P/B, and PEG ratios. Entry zone is attractive only near ₹43–46 (close to DMA 200 support). Long-term holding is favorable if earnings growth accelerates and demand in EV and safety component segments continues, but caution is advised due to valuation risks.

Would you like me to extend this into a peer benchmarking overlay comparing MSUMI with Motherson Group peers like Bosch and Bharat Forge, or should we run a sector rotation scan to identify stronger compounding opportunities across auto ancillaries and EV component plays?