Magson Retail and Distribution Limited

Sector n/a · NSE

₹93.00+₹1.05 (+1.14%)

DalalBaazaar Score

39 / 100

🔴 Weak

Verdict

CAUTION

Risk

Very High

Driven by high debt relative to equity, negative free cash flow, micro-cap size, which brings thin liquidity.

In simple words: The business is earning a fairly low return on the money invested in it, with both sales and profits growing well. Debt is the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:08 pm

Caution warranted. Multiple fundamental metrics — flagged in red below — point to either valuation stretch, leverage risk, or weakening profitability. This doesn't mean avoid the stock outright, but it does mean the burden of proof is on the growth story to justify the current price.

Understanding the Business

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

How does it make money?

Turns over ₹109 Cr a year. Of every ₹100 of sales, about ₹1 reaches shareholders as profit, with ₹4 left at the operating level before interest, tax and depreciation.

EBITDA margin3.6%

Net margin0.8%

What is its competitive advantage?Little sign of one

Returns on capital of 2.0% are at or below what the capital likely costs. That is the financial pattern of a business competing largely on price, where advantage has to come from execution rather than position.

ROCE2.0%

ROE1.0%

What has been driving growth?

Sales and margins have both contributed to where profit is now. Over 3 years revenue moved +70% while net margin moved -80% 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+70%

Margin effect-80%

DalalBaazaar Score

39/ 100

Weak

Weighted across six categories. Every point is explained below.

✗ Micro Cap: thinner liquidity and sharper drawdowns are normal
✗ High leverage magnifies any downturn in earnings
✗ Profits have swung sharply from year to year — earnings are hard to forecast
✗ Negative free cash flow means dependence on external funding

Quality vs. Valuation

Company Quality

38/ 100

Weak

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

Valuation

18/ 100

Expensive

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

Weak on business quality and not cheap enough to compensate.

vs. its own history

Not enough price and earnings history

vs. sector peers

Not enough peers with a usable P/E

vs. generic bands

No P/E available

P/E (Trailing)

—

P/B

—

EV/EBITDA

28.8x

PEG

—

Dividend Yield

None

What's Good / What's Bad

🟢 What's Going Well1

Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention6

Margins are compressing
EBITDA margin has slipped from 7.1% to 3.6% over 3 years.
Debt is rising
Total debt is up 160% over 3 years — worth checking what it funded.
Free cash flow is negative
The business is not currently covering its capital spending from operations.
Return on equity is falling
ROE has dropped from 27.2% to 1.0% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 33.4% to 2.0% — often a sign of competition or overexpansion.
Inventory building faster than sales
Inventory is up 110% against revenue growth of 70% — stock may not be moving.

Red Flags

9 items require attention · 4 high · 5 watch

🔴Debt has risen sharplyFinancial
Total debt is up 160% over 3 years, from ₹3 Cr to ₹8 Cr.
🔴High leverageFinancial
Debt/Equity of 9.75x — earnings must service borrowings before shareholders see anything.
🔴Free cash flow negative for 3 yearsFinancial
The business has not covered its capital spending from operations for several years running, which has to be funded externally.
🔴Profit up while operating cash flow fallsFinancial
Reported profit rose but cash generated by operations declined — worth checking whether earnings are being supported by non-cash items or working capital.
🟡Interest coverage is deterioratingFinancial
Cover has fallen from 5.5x to 3.3x.
🟡Profit is decliningFinancial
Net profit is down 66% over 3 years.
🟡Margins are compressingFinancial
EBITDA margin is down 3.4 points over 3 years.
🟡Inventory building faster than salesFinancial
Inventory up 110% against revenue up 70% — stock may not be moving.
🟡Shareholders have been dilutedOwnership
Shares outstanding are up 65% over 3 years — each existing share owns a smaller slice of the company.

Investment Thesis

🟢 Bull CaseWhat could make this work?

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?

Margins are being competed away
EBITDA margin has fallen from 7.1% to 3.6%. If the trend continues, profit falls even on flat sales — and margin decline rarely reverses quickly.
Leverage amplifies any setback
Debt/Equity of 9.75x. Interest is payable whether or not the business has a good year.
Returns on shareholder capital are falling
ROE has dropped from 27.2% to 1.0%. 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.
Earnings are hard to forecast
Profit has swung sharply from year to year, so any single year — good or bad — is a weak guide to the next. Cyclical earnings deserve lower multiples for that reason.
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.

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

1Revenue growth stays above 15% a year✓ 19.4% CAGR
Latest reported year was 61.1%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 2%✓ 3.6%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Debt / EBITDA stays below 2x✗ 2.1x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
4Free cash flow remains positive✗ -₹16 Cr
Profit that never becomes cash eventually stops being profit.
5Interest cover stays above 3x✓ 3.3x
How much operating profit can fall before interest stops being comfortably covered.

Investment Checklist

3 / 9 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
✗ Short-term technical trend isn't bearish

Price history

Quick Metrics

2 good · 5 neutral · 4 weak

Market Cap

₹120 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

Not available

No data

Source didn't return this field

P/B Ratio

Not available

No data

Source didn't return this field

EPS (TTM)

Not available

No data

Source didn't return this field

ROE

1.0%

Weak

Weak capital efficiency

ROCE

2.0%

Weak

Low return on total capital employed

Debt/Equity

9.75x

High

High leverage

Revenue Growth (YoY)

61.1%

Healthy

Healthy top-line growth

Profit Growth (YoY)

95.7%

Healthy

Profits growing at a healthy clip

Dividend Yield

None

No dividend yield reported — usually means no payout, but verify if one was recently initiated

Free Cash Flow

-₹16 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

CMP

₹93

Gross Margin

28.6%

Proxy

Operating margin unavailable — showing gross margin instead

Net Margin

0.8%

Weak

Very little revenue reaches the bottom line

Current Ratio

1.68

Comfortable

Healthy short-term liquidity

Technical Snapshot

SMA 20 / SMA 50

181.4 / 183.0

Bearish alignment (short < long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

62.4

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹64 Cr	₹68 Cr	₹67 Cr	₹109 Cr	+19.4%
EBITDA	₹5 Cr	₹5 Cr	₹2 Cr	₹4 Cr	-4.2%
EBITDA Margin	7.1%	7.2%	2.6%	3.6%	—
PAT (Net Profit)	₹3 Cr	₹3 Cr	₹0 Cr	₹1 Cr	-30.3%
EPS	₹3.21	₹3.85	₹0.55	—	—
ROE	27.2%	11.5%	1.8%	1.0%	—
ROCE	33.4%	16.4%	2.9%	2.0%	—
Total Debt	₹3 Cr	₹1 Cr	₹11 Cr	₹8 Cr	+37.5%
Free Cash Flow	₹1 Cr	-₹0 Cr	-₹10 Cr	-₹16 Cr	—

🟢 Revenue has grown at 19.4% a year over 3 years.

🔴 EBITDA has shrunk at 4.2% a year over 3 years.

🔴 EBITDA Margin has fallen from 7.1% to 3.6% over 3 years (-3.4 pts).

🔴 PAT (Net Profit) has shrunk at 30.3% a year over 3 years.

🔴 ROE has fallen from 27.2% to 1.0% over 3 years (-26.2 pts).

🔴 ROCE has fallen from 33.4% to 2.0% over 3 years (-31.4 pts).

🔴 Total Debt has grown at 37.5% a year over 3 years.

🔴 Free Cash Flow has turned negative, from ₹1 Cr to -₹16 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹111 Cr

Total Liabilities

₹25 Cr

Total Debt

₹8 Cr

Cash & Equivalents

₹15 Cr

Operating Cash Flow

-₹16 Cr

Capex

—

Recent News

6 general

Magson Retail promoter seeks reclassification to public category

scanx.trade, 28 Jun

Bulk and block deals: SBI Funds Management picks up 1.64% stake in Knowledge Marine & Engineering...

Moneycontrol.com, 19 Jun

Promoters seek pre-clearance to sell Magson shares worth INR 157.75 each

scanx.trade, 20 Jun

Magson Retail & Distribution Ltd. Share Price Live Today

CNBC TV18, 06 Aug

MAGSON Stock Price and Chart — NSE:MAGSON

TradingView, 20 Jul

MAGSON RETAIL AND DIST L Share Price

Upstox, 27 Mar

Watch Items

Cross-check against the company's latest quarterly filing / investor presentation before acting.
Sector/industry classification unavailable — verify manually for peer comparison.
3 metrics couldn't be retrieved for this stock — this is more common for smaller or thinly-covered listings.

DalalBaazaar Thesis

🔴Business QualityWeak5.9/20

🔴Financial HealthStretched8.7/20

🟡GrowthModest9.3/20

🔴ProfitabilityWeak4.6/15

🟡ValuationFair7.5/15

🔴RiskHigh2.5/10

Weak on the fundamentals

Poor scores on business quality without a price low enough to compensate. There is no obvious argument for owning this over a stronger company at a similar valuation. 4 high-severity red flags sit above this conclusion and should be read first.

This thesis breaks if

✓Revenue growth stays above 15% a year19.4% CAGR
✓EBITDA margin holds above 2%3.6%
✗Debt / EBITDA stays below 2x2.1x
✗Free cash flow remains positive-₹16 Cr
✓Interest cover stays above 3x3.3x