Misquita Engineering Limited

Industrials — Metal Fabrication · BSE

₹62.95+₹8.45 (+15.50%)

DalalBaazaar Score

41 / 100

🟡 Moderate

Verdict

CAUTION

Risk

Moderate

Driven by negative free cash flow, micro-cap size, which brings thin liquidity, a very high earnings multiple, which leaves little margin for disappointment.

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

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:49 pm

Understanding the Business

Company site ↗

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

What does this company do?

Misquita Engineering Limited supplies components for front-loading washing machines in India.

IndustryMetal Fabrication

SectorIndustrials

Employees5

Annual revenue₹18 Cr

How does it make money?

Turns over ₹18 Cr a year. Of every ₹100 of sales, about ₹1 reaches shareholders as profit, with ₹3 left at the operating level before interest, tax and depreciation. Each of its 5 employees supports ₹3.60 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹3.60 Cr

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?Little sign of one

Returns on capital of 3.0% 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.

Peer median ROE18.7%

What has been driving growth?

Sales and margins have both contributed to where profit is now. Over 3 years revenue moved +84% 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+84%

Margin effect-73%

DalalBaazaar Score

41/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ ROCE of 3.0% is below 10% — capital is not working hard
✗ ROCE has fallen by 7.8 points — returns are eroding
✗ EBITDA margin of 3.2% is thin — little cushion if costs rise
✗ Net margin of 1.3% is slim
• Revenue has compounded at 22.5% a year, which is the base these returns are earned on

Quality vs. Valuation

Company Quality

42/ 100

Weak

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

Valuation

26/ 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.

Historical Valuation

Current P/E

125.9x

3Y Median

88.8x

40 monthly readings · mean 108.0x · range 22.5x–248.0x

Sector Median

12.2x

median of 4 sector peers

⚠️Current valuation is approximately 42% above its 3y median of 88.8x. 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 935% above the peer median of 12.2x.

vs. its own history

Expensive

88.8x median over 40 months · +42%

vs. sector peers

Expensive

12.2x median of 4 peers · +935%

vs. generic bands

Expensive

Above 35x

EV/EBITDA

55.2x

PEG

—

What's Good / What's Bad

🟢 What's Going Well1

Very low debt
Debt/Equity of 0.17x leaves the balance sheet with plenty of headroom.

🔴 What Needs Attention2

Return on equity is falling
ROE has dropped from 7.2% to 1.6% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 10.9% to 3.0% — often a sign of competition or overexpansion.

Red Flags

8 items require attention · 4 high · 4 watch

🔴Debt has risen sharplyFinancial
Total debt is up 53% over 3 years, from ₹2 Cr to ₹3 Cr.
🔴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.
🔴Receivables growing faster than salesFinancial
Receivables up 468% against revenue up 84% — sales are being booked faster than they are collected.
🟡Interest coverage is deterioratingFinancial
Cover has fallen from 5.1x to 3.2x.
🟡Profit is decliningFinancial
Net profit is down 50% over 3 years.
🟡Margins are compressingFinancial
EBITDA margin is down 4.3 points over 3 years.
🟡Shareholders have been dilutedOwnership
Shares outstanding are up 74% over 3 years — each existing share owns a smaller slice of the company.

Investment Thesis

🟢 Bull CaseWhat could make this work?

No clear supporting case emerges from the available numbers.

🔴 Bear CaseWhat could go wrong?

Margins are being competed away
EBITDA margin has fallen from 7.6% to 3.2%. If the trend continues, profit falls even on flat sales — and margin decline rarely reverses quickly.
The debt load needs earnings to hold up
Debt is 4.4x EBITDA. At that level a downturn in earnings turns a manageable balance sheet into a refinancing problem, and lenders get paid before shareholders.
Sales are being booked faster than collected
Receivables are up 468% against revenue up 84%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
The price already assumes success
The stock trades 42% 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.
Returns on shareholder capital are falling
ROE has dropped from 7.2% to 1.6%. 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.

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

1Revenue growth stays above 17% a year✓ 22.5% CAGR
Latest reported year was 41.4%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 1%✓ 3.2%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Debt / EBITDA falls below 3x✗ 4.4x
Already stretched, so this is a reduction target rather than a level to hold. Around 3x is where lenders typically start attaching conditions.
4Free cash flow remains positive✗ -₹3 Cr
Profit that never becomes cash eventually stops being profit.
5Interest cover stays above 3x✓ 3.2x
How much operating profit can fall before interest stops being comfortably covered.

Investment Checklist

5 / 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

₹30 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

125.9x

Expensive

Expensive — verify against sector peers

P/B Ratio

2.04x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹0.5

Profitable

Profitable on a per-share basis

ROE

1.7%

Weak

Weak capital efficiency

ROCE

3.0%

Weak

Low return on total capital employed

Debt/Equity

0.17x

Low

Conservative leverage

Revenue Growth (YoY)

41.4%

Healthy

Healthy top-line growth

Profit Growth (YoY)

1880.0%

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

-₹3 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

ROA

1.5%

Weak

Assets generate little profit

Operating Margin

2.0%

Weak

Thin margins leave little room for error

Net Margin

1.3%

Weak

Very little revenue reaches the bottom line

Current Ratio

2.43

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.21

Defensive

Steadier than the market

52W Range Position

14%

Near low

Near its 52-week low

Technical Snapshot

SMA 20 / SMA 50

56.1 / 60.3

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

80.3

Overbought zone

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹10 Cr	₹10 Cr	₹12 Cr	₹18 Cr	+22.5%
EBITDA	₹1 Cr	-₹0 Cr	₹0 Cr	₹1 Cr	-7.9%
EBITDA Margin	7.6%	-0.7%	2.9%	3.2%	—
PAT (Net Profit)	₹0 Cr	-₹0 Cr	₹0 Cr	₹0 Cr	-20.4%
EPS	₹1.69	₹-1.04	₹0.5	—	—
ROE	7.2%	-2.7%	1.6%	1.6%	—
ROCE	10.9%	-1.6%	1.6%	3.0%	—
Total Debt	₹2 Cr	₹1 Cr	₹1 Cr	₹3 Cr	+15.3%
Free Cash Flow	₹1 Cr	-₹3 Cr	-₹3 Cr	-₹3 Cr	—

🟢 Revenue has grown at 22.5% a year over 3 years.

🔴 EBITDA has shrunk at 7.9% a year over 3 years.

🔴 EBITDA Margin has fallen from 7.6% to 3.2% over 3 years (-4.3 pts).

🔴 PAT (Net Profit) has shrunk at 20.4% a year over 3 years.

🔴 ROE has fallen from 7.2% to 1.6% over 3 years (-5.6 pts).

🔴 ROCE has fallen from 10.9% to 3.0% over 3 years (-7.8 pts).

🔴 Total Debt has grown at 15.3% a year over 3 years.

🔴 Free Cash Flow has turned negative, from ₹1 Cr to -₹3 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹22 Cr

Total Liabilities

₹7 Cr

Cash & Equivalents

₹0 Cr

Operating Cash Flow

-₹3 Cr

Capex

-₹0 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

80.8%

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

1 mixed1 negative4 general

Misquita Engineering discloses AGM voting results, all resolutions pass

scanx.trade, 30 SeptResults

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

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Equitymaster, 08 Oct

Goa’s iconic Tito’s planning a stock market foray via stake sale

Gomantak Times, 02 FebOwnership

🔴Potentially negativePromoter selling or pledging is a signal worth understanding, though the reason is often personal rather than about the business.

Kotak Mahindra Bank Announces Senior Management Changes in Technology Leadership

scanx.trade, 09 Feb

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Simply Wall Street, 22 Oct

Watch Items

Cross-check against the company's latest quarterly filing / investor presentation before acting.
RSI is in overbought territory — momentum entries here carry more short-term pullback risk.

DalalBaazaar Thesis

MiddlingFinancial Health · Growth

WeakBusiness Quality · Profitability · Valuation · Risk

Points for each in the Score ↑

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.

2 of 5 tripwires tripped — Debt / EBITDA falls below 3x; Free cash flow remains positive · see Key things to watch ↑