Modi Naturals Limited

Consumer Defensive — Packaged Foods · NSE

₹369.95−₹4.45 (−1.19%)

DalalBaazaar Score

68 / 100

🟢 Good

Verdict

REASONABLE

Risk

High

Driven by moderate debt load, negative free cash flow, micro-cap size, which brings thin liquidity.

In simple words: Strong business and financial position, with modest growth. 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 Modi Naturals Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Modi Naturals Limited, together with its subsidiary, Modi Biotech Private Limited, engages in the manufacture and marketing of oils and deoiled cakes in India. It operates through Branded Business and Bulk Business segments.

IndustryPackaged Foods

SectorConsumer Defensive

Employees452

Annual revenue₹681 Cr

How does it make money?

Turns over ₹681 Cr a year. Of every ₹100 of sales, about ₹7 reaches shareholders as profit, with ₹11 left at the operating level before interest, tax and depreciation. Each of its 452 employees supports ₹1.51 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹1.51 Cr

Who are its competitors?

The closest listed comparisons in its industry are NESTLE INDIA LIMITED, BRITANNIA INDUSTRIES LTD, TATA CONSUMER PRODUCT LTD, DABUR INDIA LTD. 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 23.1% 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 ROE51.0%

What has been driving growth?

Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved +63% while net margin moved +2787% 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+63%

Margin effect+2787%

DalalBaazaar Score

68/ 100

Good

Weighted across six categories. Every point is explained below.

✓ Beta of 0.16 — historically steadier than the index
✗ Micro Cap: thinner liquidity and sharper drawdowns are normal
✗ 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

70/ 100

Good

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

Valuation

81/ 100

Cheap

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

A good business currently available at an undemanding price — the combination this framework is built to look for.

Historical Valuation

Current P/E

9.3x

1.0Y Median

14.6x

12 monthly readings · mean 13.7x · range 8.9x–19.8x

Sector Median

51.7x

median of 4 sector peers

🟢Current valuation is approximately 36% below its 1.0y median of 14.6x. Cheaper than its own history, which is worth a reason too: the market may be pricing in something the backward-looking numbers do not show.

🟢Against its sector it trades 82% below the peer median of 51.7x.

vs. its own history

Cheap

14.6x median over 12 months · -36%

vs. sector peers

Cheap

51.7x median of 4 peers · -82%

vs. generic bands

Cheap

Below 15x

EV/EBITDA

8.9x

PEG

0.04

What's Good / What's Bad

🟢 What's Going Well4

Margins are improving
EBITDA margin is up from 1.9% to 10.8% over 3 years.
Return on equity is rising
ROE has improved from 1.3% to 29.2%.
Return on capital is rising
ROCE has improved from 2.9% to 23.1%.
High return on capital employed
ROCE of 23.1% is the mark of a business that converts capital into profit efficiently.

🔴 What Needs Attention0

Nothing stands out as clearly deteriorating on the years of data available.

Red Flags

2 items require attention · 1 high · 1 watch

🔴Receivables growing faster than salesFinancial
Receivables up 140% against revenue up 63% — sales are being booked faster than they are collected.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹19 Cr in the latest year.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Capital compounds at a high rate
ROCE of 23.1% 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.
Margin expansion has further to run
EBITDA margin has risen from 1.9% to 10.8%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
Priced below its own history
The stock trades 36% below its own median multiple. If the business performs as it has and simply re-rates back to normal, that gap is return on its own.
Cheaper than its peers
It trades 82% below the sector median. Either the market sees a problem the numbers do not show, or the discount closes.

🔴 Bear CaseWhat could go wrong?

Sales are being booked faster than collected
Receivables are up 140% against revenue up 63%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
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 13% a year✓ 17.7% CAGR
Latest reported year was 0.4%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 9%✓ 10.8%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Debt / EBITDA stays below 2x✗ 2.2x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
4Free cash flow remains positive✗ -₹19 Cr
Profit that never becomes cash eventually stops being profit.
5ROCE stays above 20%✓ 23.1%
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

5 good · 5 neutral · 1 weak

Market Cap

₹492 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

9.3x

Cheap

Cheap against the generic band

P/B Ratio

2.86x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹39.58

Profitable

Profitable on a per-share basis

ROE

29.2%

Strong

Strong capital efficiency

ROCE

23.1%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

0.94x

Moderate

Moderate leverage

Revenue Growth (YoY)

0.4%

Modest

Modest growth

Profit Growth (YoY)

19.9%

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

-₹19 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

Operating Margin

12.4%

Average

Average margins

Net Margin

7.3%

Average

Average bottom-line conversion

Current Ratio

1.66

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.16

Defensive

Steadier than the market

52W Range Position

43%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

334.2 / 349.7

Bearish alignment (short < long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

62.0

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹418 Cr	₹395 Cr	₹638 Cr	₹681 Cr	+17.7%
EBITDA	₹8 Cr	₹9 Cr	₹56 Cr	₹73 Cr	+110.5%
EBITDA Margin	1.9%	2.4%	8.8%	10.8%	—
PAT (Net Profit)	₹1 Cr	-₹1 Cr	₹31 Cr	₹50 Cr	+261.0%
EPS	₹0.84	₹-1.09	₹23.32	₹37.79	+255.1%
ROE	1.3%	-1.5%	25.5%	29.2%	—
ROCE	2.9%	2.7%	24.2%	23.1%	—
Total Debt	₹143 Cr	₹170 Cr	₹149 Cr	₹161 Cr	+4.2%
Free Cash Flow	-₹100 Cr	-₹41 Cr	₹21 Cr	-₹19 Cr	—

🟢 Revenue has grown at 17.7% a year over 3 years.

🟢 EBITDA has grown at 110.5% a year over 3 years.

🟢 EBITDA Margin has risen from 1.9% to 10.8% over 3 years (+8.9 pts).

🟢 PAT (Net Profit) has grown at 261.0% a year over 3 years.

🟢 EPS has grown at 255.1% a year over 3 years.

🟢 ROE has risen from 1.3% to 29.2% over 3 years (+27.9 pts).

🟢 ROCE has risen from 2.9% to 23.1% over 3 years (+20.3 pts).

🔴 Total Debt has grown at 4.2% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹407 Cr

Total Liabilities

₹234 Cr

Cash & Equivalents

₹2 Cr

Operating Cash Flow

₹61 Cr

Capex

-₹80 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

76.2%

Peer Comparison

Company	P/E	ROE
NESTLE INDIA LIMITED	59.8x	79.9%
BRITANNIA INDUSTRIES LTD	44.1x	51.0%
TATA CONSUMER PRODUCT LTD	59.3x	7.5%
DABUR INDIA LTD	34.7x	17.2%

Recent News

1 positive2 mixed3 general

Modi Naturals Share Price News: Price Action and Ratios

Univest, 15 Oct

Modi Naturals Share Price Jumps as Momentum Improves

Kalkine India, 15 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.

Price Band Hitters Today, October 15, 2026 at 12:00 PM

HDFC Sky, 15 Oct

Modi Naturals FY26 Net Profit Jumps 62% to ₹50.3 Cr

scanx.trade, 13 OctResults

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

Momentum Stocks: Modi Naturals, Godavari Biorefineries, Shoppers Stop rise up to 16% on sheer momentum

Moneycontrol.com, 15 Oct

Additional Considerations Required While Assessing Modi Naturals' (NSE:MODINATUR) Strong Earnings

Simply Wall Street, 21 MayResults

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

Watch Items

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

DalalBaazaar Thesis

StrongFinancial Health · Growth · Profitability · Valuation

MiddlingBusiness Quality

WeakRisk

Points for each in the Score ↑

Attractive on both counts

A good business currently available at an undemanding price — the combination this framework exists to look for. The work left is qualitative: whether the advantage the numbers imply is one you can identify and expect to last. 1 high-severity red flag sits above this conclusion and should be read first.

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