Marsons Limited

Industrials — Electrical Equipment & Parts · NSE

₹123.00−₹5.64 (−4.38%)

DalalBaazaar Score

58 / 100

🟡 Moderate

Verdict

CAUTION

Risk

High

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, 7:02 pm

Understanding the Business

Company site ↗

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

What does this company do?

Marsons Limited engages in manufacturing and selling of power and distribution transformers in India.

IndustryElectrical Equipment & Parts

SectorIndustrials

Employees35

Annual revenue₹243 Cr

How does it make money?

Turns over ₹243 Cr a year. Of every ₹100 of sales, about ₹19 reaches shareholders as profit, with ₹17 left at the operating level before interest, tax and depreciation. Each of its 35 employees supports ₹6.95 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹6.95 Cr

Who are its competitors?

The closest listed comparisons in its industry are SIEMENS LTD, ABB INDIA LIMITED, HAVELLS INDIA 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 19.9% 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 ROE17.1%

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 +5233% while net margin moved -73% 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+5233%

Margin effect-73%

DalalBaazaar Score

58/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ P/E of 48.0x is demanding — it needs sustained high growth to justify
✗ P/B of 9.76x is a steep premium to book

Quality vs. Valuation

Company Quality

68/ 100

Good

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

Valuation

56/ 100

Fair

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

48.0x

Sector Median

88.8x

median of 3 sector peers

🟢Against its sector it trades 46% below the peer median of 88.8x.

vs. its own history

Not enough price and earnings history

vs. sector peers

Cheap

88.8x median of 3 peers · -46%

vs. generic bands

Expensive

Above 35x

EV/EBITDA

49.7x

PEG

0.34

What's Good / What's Bad

🟢 What's Going Well2

Debt is being paid down
Total debt is down 95% over 3 years.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention2

Return on equity is falling
ROE has dropped from 108.2% to 21.3% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 36.7% to 19.9% — often a sign of competition or overexpansion.

Red Flags

4 items require attention · 3 high · 1 watch

🔴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.
🔴Significant margin compressionFinancial
EBITDA margin has fallen 8.7 points, from 26.2% to 17.4%.
🔴Inventory building faster than salesFinancial
Inventory up 30131% against revenue up 5233% — stock may not be moving.
🟡Shareholders have been dilutedOwnership
Shares outstanding are up 38% over 3 years — each existing share owns a smaller slice of the company.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Capital compounds at a high rate
ROCE of 19.9% means each rupee reinvested earns well above what capital costs. If the company can keep deploying at this rate, growth creates value rather than just consuming cash.
Deleveraging frees up earnings
Debt is down 95% over 3 years. Every rupee of interest not paid drops to the bottom line, so profit can grow even if revenue does not.
Cheaper than its peers
It trades 46% below the sector median. Either the market sees a problem the numbers do not show, or the discount closes.
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 26.2% to 17.4%. If the trend continues, profit falls even on flat sales — and margin decline rarely reverses quickly.
Returns on shareholder capital are falling
ROE has dropped from 108.2% to 21.3%. 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.
Several serious flags at once
3 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

1Revenue growth stays above 207% a year✓ 276.4% CAGR
Latest reported year was 4.8%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 15%✓ 17.4%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Free cash flow remains positive✗ -₹0 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 0.0x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 17%✓ 19.9%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

8 / 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

4 good · 3 neutral · 4 weak

Market Cap

₹2,117 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

48.0x

Expensive

Expensive — verify against sector peers

P/B Ratio

9.76x

Rich

Steep premium to book — needs high, durable returns to justify

EPS (TTM)

₹2.56

Profitable

Profitable on a per-share basis

ROE

21.3%

Strong

Strong capital efficiency

ROCE

19.9%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

0.32x

Low

Conservative leverage

Revenue Growth (YoY)

4.8%

Modest

Modest growth

Profit Growth (YoY)

-27.7%

Falling

Profits are shrinking

Dividend Yield

None

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

Free Cash Flow

-₹0 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

Operating Margin

14.2%

Average

Average margins

Net Margin

17.9%

Good

Strong bottom-line conversion

Current Ratio

2.66

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.90

Market-like

Moves roughly in line with the market

52W Range Position

30%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

124.6 / 120.9

Bullish alignment (short > long)

RSI (14)

49.8

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹5 Cr	₹5 Cr	₹167 Cr	₹243 Cr	+276.4%
EBITDA	₹1 Cr	₹1 Cr	₹25 Cr	₹42 Cr	+228.8%
EBITDA Margin	26.2%	25.9%	15.2%	17.4%	—
PAT (Net Profit)	₹3 Cr	₹1 Cr	₹28 Cr	₹46 Cr	+142.1%
EPS	₹0.26	₹0.05	₹1.64	₹2.69	+117.9%
ROE	108.2%	4.4%	22.9%	21.3%	—
ROCE	36.7%	4.4%	23.0%	19.9%	—
Total Debt	₹15 Cr	₹9 Cr	₹3 Cr	₹1 Cr	-63.6%
Free Cash Flow	₹0 Cr	-₹4 Cr	-₹39 Cr	-₹0 Cr	—

🟢 Revenue has grown at 276.4% a year over 3 years.

🟢 EBITDA has grown at 228.8% a year over 3 years.

🔴 EBITDA Margin has fallen from 26.2% to 17.4% over 3 years (-8.7 pts).

🟢 PAT (Net Profit) has grown at 142.1% a year over 3 years.

🟢 EPS has grown at 117.9% a year over 3 years.

🔴 ROE has fallen from 108.2% to 21.3% over 3 years (-86.9 pts).

🔴 ROCE has fallen from 36.7% to 19.9% over 3 years (-16.8 pts).

🟢 Total Debt has shrunk at 63.6% a year over 3 years.

🔴 Free Cash Flow has turned negative, from ₹0 Cr to -₹0 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹291 Cr

Total Liabilities

₹73 Cr

Cash & Equivalents

₹8 Cr

Operating Cash Flow

₹2 Cr

Capex

-₹2 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

68.8%

Peer Comparison

Company	P/E	ROE
SIEMENS LTD	88.8x	10.5%
ABB INDIA LIMITED	92.6x	19.1%
HAVELLS INDIA LIMITED	43.5x	17.1%

Recent News

2 mixed4 general

MARSONS Stock Price and Chart — NSE:MARSONS

TradingView, 13 Mar

Marsons share price rallies 15% today | What's behind the jump? Check share performance

Livemint, 07 OctPrice move

🟡Mixed / dependsA price move, which is not by itself a change in the business. Worth finding the cause before reading it as either good or bad.

Marsons Ltd. Share Price: Price, Valuation, Sector View

Univest, 07 Aug

Marsons' (NSE:MARSONS) Earnings Are Of Questionable Quality

Simply Wall Street, 30 MayResults

🟡Mixed / dependsA results event. The figures on this page update once the new statements reach the data feed, which usually lags the announcement.

Marsons Wins ₹17.94 Crore Transformer Order

HDFC Sky, 03 Jul

Marsons jumps 12% on bagging ₹9.48 crore order from West Bengal utility

Business Standard, 09 Jun

Watch Items

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

DalalBaazaar Thesis

StrongBusiness Quality · Financial Health · Profitability

MiddlingGrowth

WeakValuation · Risk

Points for each in the Score ↑

Good business at a fair price

A sound business at a reasonable valuation. Suitable for a long-term holding, with the valuation and the direction of margins worth watching rather than the business itself. 3 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 ↑