MAHSCOOTER - Investment Analysis: Buy Signal or Bull Trap?
Back to ListInvestment Rating: 1.8
| Stock Code | MAHSCOOTER | Market Cap | 15,254 Cr. | Current Price | 13,342 ₹ | High / Low | 18,538 ₹ |
| Stock P/E | 49.1 | Book Value | 28,887 ₹ | Dividend Yield | 1.20 % | ROCE | 0.59 % |
| ROE | 0.61 % | Face Value | 10.0 ₹ | DMA 50 | 13,980 ₹ | DMA 200 | 13,995 ₹ |
| Chg in FII Hold | 0.03 % | Chg in DII Hold | 0.02 % | PAT Qtr | 4.12 Cr. | PAT Prev Qtr | 267 Cr. |
| RSI | 46.0 | MACD | -236 | Volume | 3,107 | Avg Vol 1Wk | 4,030 |
| Low price | 8,822 ₹ | High price | 18,538 ₹ | PEG Ratio | 6.96 | Debt to equity | 0.00 |
| 52w Index | 46.5 % | Qtr Profit Var | 24.8 % | EPS | 313 ₹ | Industry PE | 24.2 |
📊 Analysis: Mahindra Scooters (MAHSCOOTER) trades at ₹13,342 with a P/E of 49.1, significantly higher than the industry average of 24.2, indicating steep overvaluation. ROE (0.61%) and ROCE (0.59%) are extremely weak, reflecting poor efficiency in generating returns. Dividend yield at 1.20% provides minor income support but does not offset weak fundamentals. The PEG ratio (6.96) suggests expensive valuation relative to growth. Technical indicators (RSI 46.0, MACD -236) show bearish momentum. PAT has collapsed sequentially (267 Cr. → 4.12 Cr.), raising serious concerns about earnings stability. Despite being debt-free, profitability metrics are very weak.
💡 Entry Price Zone: Ideal entry would be between ₹9,000–₹10,000, closer to the 52-week low (₹8,822), offering better valuation comfort. Current levels are risky given poor fundamentals.
📈 Exit / Holding Strategy: If already holding, consider short-term exit on rallies near ₹14,000–₹15,000. Long-term holding is not recommended unless ROE/ROCE improve significantly and earnings stabilize. Exit strategy should be triggered if price sustains below ₹9,000 or profitability continues to deteriorate.
✅ Positive
- Debt-to-equity ratio at 0.00, completely debt-free.
- Dividend yield at 1.20%, providing some income support.
- EPS at ₹313, reflecting strong book value backing.
⚠️ Limitation
- Extremely weak ROE (0.61%) and ROCE (0.59%).
- High P/E (49.1) vs industry average (24.2).
- PEG ratio (6.96) indicates expensive valuation relative to growth.
📉 Company Negative News
- Sharp decline in PAT (267 Cr. → 4.12 Cr.).
- Quarterly profit variation at -24.8%, showing earnings deterioration.
- Low trading volumes, indicating weak investor interest.
📈 Company Positive News
- Minor increase in FII (+0.03%) and DII (+0.02%) holdings.
- Stock trading well above 52-week low (₹8,822), showing resilience despite weak fundamentals.
🏭 Industry
- Automotive and scooter sector has cyclical growth tied to consumer demand and economic cycles.
- Industry P/E at 24.2 highlights MAHSCOOTER is trading at a steep premium compared to peers.
🔎 Conclusion
Mahindra Scooters shows weak fundamentals with poor profitability, high valuation, and negligible efficiency metrics. It is not a good candidate for long-term investment at current levels. Best strategy: avoid fresh entry until price corrects to ₹9,000–₹10,000 and fundamentals improve. Existing holders should consider exiting on rallies near ₹14,000–₹15,000.