Magna Electro Castings Limited

Industrials — Metal Fabrication · BSE

₹1,352.10−₹37.80 (−2.72%)

DalalBaazaar Score

48 / 100

🟡 Moderate

Verdict

NEUTRAL

Risk

Moderate

Driven by negative free cash flow, micro-cap size, which brings thin liquidity, falling profits.

In simple words: Strong business and financial position, though profits are falling even as sales grow. Cash generation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:03 pm

Understanding the Business

Company site ↗

The 60-second version of Magna Electro Castings Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Magna Electro Castings Limited engages in the manufacture and sale of cast iron components in India and internationally. It offers ductile iron, SiMo, compacted graphite iron, austempered ductile iron, and grey iron castings.

IndustryMetal Fabrication

SectorIndustrials

Employees242

Annual revenue₹190 Cr

How does it make money?

Turns over ₹190 Cr a year. Of every ₹100 of sales, about ₹10 reaches shareholders as profit, with ₹19 left at the operating level before interest, tax and depreciation. Each of its 242 employees supports ₹78.3 lakh of revenue a year, the signature of a people-led business.

Revenue / employee₹78.3 lakh

Who are its competitors?

The closest listed comparisons in its industry are TATA STEEL LIMITED, JSW STEEL LIMITED, HINDALCO INDUSTRIES LTD, VEDANTA LIMITED. These are the companies its valuation and returns are measured against elsewhere in this report.

Compared side by side in Peers ↓

What is its competitive advantage?Some evidence

ROCE of 16.3% is above what capital typically costs, which suggests some pricing power, though not yet the sustained, wide gap that marks a durable advantage.

Peer median ROE18.7%

What has been driving growth?

Growth has come mainly from selling more, rather than from keeping more of each sale. Over 3 years revenue moved +18% while net margin moved -9% relative to itself. What this cannot tell you is which products, customers or geographies did the work — that lives in the segment disclosures of the annual report.

Revenue effect+18%

Margin effect-9%

DalalBaazaar Score

48/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ Revenue CAGR of only 5.7% — barely ahead of inflation
✗ Profit CAGR of only 2.6%
✗ Profit fell 44.1% in the latest year

Quality vs. Valuation

Company Quality

50/ 100

Average

How good the business is, ignoring the share price entirely.

Valuation

28/ 100

Expensive

What you are being asked to pay, ignoring how good the business is.

A reasonable business at a reasonable price — neither the quality nor the valuation stands out in either direction.

Historical Valuation

Current P/E

36.8x

2Y Median

22.7x

28 monthly readings · mean 24.0x · range 13.6x–34.5x

Sector Median

12.2x

median of 4 sector peers

⚠️Current valuation is approximately 62% above its 2y median of 22.7x. Paying more than usual needs a reason — faster growth, a better balance sheet, or a re-rating you believe in.

⚠️Against its sector it trades 203% above the peer median of 12.2x.

vs. its own history

Expensive

22.7x median over 28 months · +62%

vs. sector peers

Expensive

12.2x median of 4 peers · +203%

vs. generic bands

Expensive

Above 35x

EV/EBITDA

16.6x

PEG

14.35

What's Good / What's Bad

🟢 What's Going Well3

Margins are improving
EBITDA margin is up from 16.7% to 18.6% over 3 years.
Very low debt
Debt/Equity of 0.10x leaves the balance sheet with plenty of headroom.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention2

Return on equity is falling
ROE has dropped from 18.1% to 12.7% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 24.1% to 16.3% — often a sign of competition or overexpansion.

Red Flags

3 items require attention · 2 high · 1 watch

🔴Debt has risen sharplyFinancial
Total debt is up 9683% over 3 years, from ₹0 Cr to ₹15 Cr.
🔴Inventory building faster than salesFinancial
Inventory up 100% against revenue up 18% — stock may not be moving.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹36 Cr in the latest year.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Margin expansion has further to run
EBITDA margin has risen from 16.7% to 18.6%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
Earnings have proved durable
Profitable in every one of the last 4 reported years. Consistency lowers the risk that any single bad year is structural rather than cyclical.

🔴 Bear CaseWhat could go wrong?

The price already assumes success
The stock trades 62% above its own median multiple. At this level the business has to deliver just to stand still, and a stumble is repriced twice — lower earnings on a lower multiple.
Growth barely outpaces inflation
Revenue compounding at 5.7% a year is close to the rate prices rise, so the business is gaining little ground in real terms. That leaves the share price dependent on a re-rating rather than on earnings growth.
Returns on shareholder capital are falling
ROE has dropped from 18.1% to 12.7%. Each rupee of equity earns less than it did, so profit growth increasingly depends on raising more capital rather than on the existing base working harder.
Size brings its own risk
Micro Cap businesses are thinly traded, so exits are harder in a falling market and single events move the price more than they would for a larger company.
Several serious flags at once
2 high-severity checks triggered. Individually each has an explanation; together they raise the chance that something structural is wrong rather than a one-off.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1EBITDA margin holds above 17%✓ 18.6%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Free cash flow remains positive✗ -₹36 Cr
Profit that never becomes cash eventually stops being profit.
3Revenue growth stays above 4% a year✓ 5.7% CAGR
Latest reported year was 4.7%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
4Debt / EBITDA stays below 2x✓ 0.4x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 13%✓ 16.3%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

7 / 11 checks passed

✗ Strong return on equity (ROE ≥ 15%)
✓ Strong return on capital employed (ROCE ≥ 15%)
✗ Healthy net margin (≥ 10%)
✗ Generates positive free cash flow
✓ Manageable leverage (Debt/Equity < 1.0)
✓ Adequate short-term liquidity (Current Ratio ≥ 1.0)
✓ Revenue growing year-over-year
✗ Profit growing year-over-year
✓ Not trading at an extreme valuation (P/E < 40x)
✓ Not buying right at the 52-week high
✓ Short-term technical trend isn't bearish

Price history

Quick Metrics

3 good · 6 neutral · 2 weak

Market Cap

₹572 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

36.8x

Fair

Fairly valued against the generic band

P/B Ratio

3.95x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹36.73

Profitable

Profitable on a per-share basis

ROE

12.7%

Moderate

Moderate capital efficiency

ROCE

16.3%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

0.10x

Low

Conservative leverage

Revenue Growth (YoY)

4.7%

Modest

Modest growth

Profit Growth (YoY)

-44.1%

Falling

Profits are shrinking

Dividend Yield

0.37%

Modest

Small cash return — most of the return has to come from the price

Free Cash Flow

-₹36 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

P/E (Forward)

93.2x

Flat

At or above the trailing multiple — no earnings uplift is being priced in

Operating Margin

9.5%

Average

Average margins

Net Margin

7.8%

Average

Average bottom-line conversion

Current Ratio

2.52

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.69

Defensive

Steadier than the market

52W Range Position

72%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

1346.8 / 1343.9

Bullish alignment (short > long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

39.3

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹160 Cr	₹140 Cr	₹172 Cr	₹190 Cr	+5.7%
EBITDA	₹27 Cr	₹25 Cr	₹36 Cr	₹35 Cr	+9.6%
EBITDA Margin	16.7%	17.8%	20.8%	18.6%	—
PAT (Net Profit)	₹17 Cr	₹15 Cr	₹23 Cr	₹18 Cr	+2.6%
EPS	₹40.46	₹35.7	₹54.62	₹43.65	+2.6%
ROE	18.1%	13.9%	17.9%	12.7%	—
ROCE	24.1%	18.6%	22.1%	16.3%	—
Total Debt	₹0 Cr	₹0 Cr	₹11 Cr	₹15 Cr	+360.8%
Free Cash Flow	₹6 Cr	₹0 Cr	-₹9 Cr	-₹36 Cr	—

🟢 Revenue has grown at 5.7% a year over 3 years.

🟢 EBITDA has grown at 9.6% a year over 3 years.

🟢 EBITDA Margin has risen from 16.7% to 18.6% over 3 years (+1.9 pts).

🟢 PAT (Net Profit) has grown at 2.6% a year over 3 years.

🟢 EPS has grown at 2.6% a year over 3 years.

🔴 ROE has fallen from 18.1% to 12.7% over 3 years (-5.4 pts).

🔴 ROCE has fallen from 24.1% to 16.3% over 3 years (-7.8 pts).

🔴 Total Debt has grown at 360.8% a year over 3 years.

🔴 Free Cash Flow has turned negative, from ₹6 Cr to -₹36 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹194 Cr

Total Liabilities

₹49 Cr

Cash & Equivalents

₹2 Cr

Operating Cash Flow

₹21 Cr

Capex

-₹57 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

59.9%

Corporate Actions

Dividend Rate

₹5

Ex-Dividend Date

02 Sept 2026

Peer Comparison

Company	P/E	ROE
TATA STEEL LIMITED	19.8x	10.8%
JSW STEEL LIMITED	12.0x	24.7%
HINDALCO INDUSTRIES LTD	12.3x	12.0%
VEDANTA LIMITED	10.4x	18.7%

Recent News

3 positive3 general

Magna Electro Castings Ltd Sees Bullish Momentum Shift Amid Technical Upgrades

MarketsMojo, 15 OctAnalyst view

🟢Potentially positiveAn analyst opinion changing, which moves the price without changing the business.

Magna Electro Castings Ltd. Shareholding Pattern – Promoters, FIIs & DIIs

Value Research, 30 Aug

Magna Electro Castings net profit up 40% to ₹3.7 crore in Q1FY27

scanx.trade, 13 AugResults

🟢Potentially positiveReported improvement. Check whether it came from volume, price or a one-off item before treating it as a trend.

Magna FY26 net profit falls 20.1%, declares ₹5 dividend

scanx.trade, 28 MayCapital return

🟢Potentially positiveCash or shares returned to holders. A buyback is only good value if the shares were cheap when bought.

Magna Electro Castings Ltd. Share Price Near 52-Week High

Univest, 10 Aug

MAGNA ELECTRO CASTINGS LTD. Share Price - Live MAGNAELQ Stock Price & Chart

Upstox, 05 Apr

Watch Items

Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

StrongFinancial Health

MiddlingBusiness Quality · Profitability

WeakGrowth · Valuation · Risk

Points for each in the Score ↑

Unremarkable in both directions

A reasonable business at a reasonable price. Nothing here is alarming and nothing is compelling, which usually means the decision rests on things this data cannot see — the industry's direction, management's intent, and what else is available to you. 2 high-severity red flags sit above this conclusion and should be read first.

1 of 5 tripwires tripped — Free cash flow remains positive · see Key things to watch ↑