Modern Insulators Limited

Technology — Electronic Components · BSE

₹495.00+₹10.10 (+2.08%)

DalalBaazaar Score

72 / 100

🟢 Good

Verdict

REASONABLE

Risk

Low

Driven by micro-cap size, which brings thin liquidity.

In simple words: Strong business and financial position, with both sales and profits growing well. Nothing on this snapshot stands out as an immediate concern — the usual checks on business quality and management still apply.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:00 pm

Understanding the Business

Company site ↗

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

What does this company do?

Modern Insulators Limited manufactures and sells porcelain insulators in India and internationally. It operates through two segments: Insulators and Terry Towels.

IndustryElectronic Components

SectorTechnology

Employees1,540

Annual revenue₹706 Cr

How does it make money?

Turns over ₹706 Cr a year. Of every ₹100 of sales, about ₹11 reaches shareholders as profit, with ₹17 left at the operating level before interest, tax and depreciation. Each of its 1,540 employees supports ₹45.8 lakh of revenue a year, the signature of a people-led business.

Revenue / employee₹45.8 lakh

Who are its competitors?

The closest listed comparisons in its industry are TATA CONSULTANCY SERV LT, INFOSYS LIMITED, HCL TECHNOLOGIES LTD, WIPRO 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 16.7% 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 ROE32.0%

What has been driving growth?

Sales and margins have both contributed to where profit is now. Over 3 years revenue moved +66% while net margin moved +72% 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+66%

Margin effect+72%

DalalBaazaar Score

72/ 100

Good

Weighted across six categories. Every point is explained below.

• P/E of 24.9x is within a normal band
✗ P/E is 32% above its own historical median of 18.9x — expensive by its own standards

Quality vs. Valuation

Company Quality

79/ 100

Good

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

Valuation

43/ 100

Expensive

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

A good business, but the price already reflects that. The quality is real; the question is whether you are overpaying for it today.

Historical Valuation

Current P/E

24.9x

3Y Median

18.9x

40 monthly readings · mean 22.7x · range 10.4x–65.7x

Sector Median

16.5x

median of 4 sector peers

⚠️Current valuation is approximately 32% above its 3y median of 18.9x. 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 51% above the peer median of 16.5x.

vs. its own history

Expensive

18.9x median over 40 months · +32%

vs. sector peers

Expensive

16.5x median of 4 peers · +51%

vs. generic bands

Fair

15x–35x

EV/EBITDA

19.4x

PEG

0.60

What's Good / What's Bad

🟢 What's Going Well6

Margins are improving
EBITDA margin is up from 9.3% to 17.5% over 3 years.
Cash generation is improving
Free cash flow is up 54% over 3 years.
Return on equity is rising
ROE has improved from 7.2% to 14.7%.
Return on capital is rising
ROCE has improved from 6.6% to 16.7%.
Very low debt
Debt/Equity of 0.13x leaves the balance sheet with plenty of headroom.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention0

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

Red Flags

1 item require attention · 1 high

🔴Debt has risen sharplyFinancial
Total debt is up 750% over 3 years, from ₹8 Cr to ₹68 Cr.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Margin expansion has further to run
EBITDA margin has risen from 9.3% to 17.5%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
Self-funding with balance-sheet headroom
Positive free cash flow of ₹26 Cr alongside low debt means growth, buybacks or dividends need no outside money — and a downturn can be absorbed rather than refinanced.
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 32% 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.
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 14% a year✓ 18.5% CAGR
Latest reported year was 33.2%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 15%✓ 17.5%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Free cash flow remains positive✓ ₹26 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 0.6x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 14%✓ 16.7%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

10 / 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

6 good · 5 neutral · 0 weak

Market Cap

₹2,334 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

24.9x

Fair

Fairly valued against the generic band

P/B Ratio

4.30x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹19.87

Profitable

Profitable on a per-share basis

ROE

14.7%

Moderate

Moderate capital efficiency

ROCE

16.7%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

0.13x

Low

Conservative leverage

Revenue Growth (YoY)

33.2%

Healthy

Healthy top-line growth

Profit Growth (YoY)

94.4%

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

₹26 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

Operating Margin

15.6%

Good

Healthy core-business profitability

Net Margin

12.3%

Good

Strong bottom-line conversion

Current Ratio

3.75

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.78

Defensive

Steadier than the market

52W Range Position

81%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

475.2 / 457.4

Bullish alignment (short > long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

58.6

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹424 Cr	₹437 Cr	₹494 Cr	₹706 Cr	+18.5%
EBITDA	₹39 Cr	₹45 Cr	₹48 Cr	₹123 Cr	+46.4%
EBITDA Margin	9.3%	10.2%	9.7%	17.5%	—
PAT (Net Profit)	₹28 Cr	₹36 Cr	₹39 Cr	₹80 Cr	+41.9%
EPS	₹5.93	₹7.65	₹8.18	₹16.92	+41.8%
ROE	7.2%	8.5%	8.3%	14.7%	—
ROCE	6.6%	7.8%	9.3%	16.7%	—
Total Debt	₹8 Cr	₹19 Cr	₹25 Cr	₹68 Cr	+104.1%
Free Cash Flow	₹17 Cr	₹6 Cr	₹21 Cr	₹26 Cr	+15.4%

🟢 Revenue has grown at 18.5% a year over 3 years.

🟢 EBITDA has grown at 46.4% a year over 3 years.

🟢 EBITDA Margin has risen from 9.3% to 17.5% over 3 years (+8.2 pts).

🟢 PAT (Net Profit) has grown at 41.9% a year over 3 years.

🟢 EPS has grown at 41.8% a year over 3 years.

🟢 ROE has risen from 7.2% to 14.7% over 3 years (+7.5 pts).

🟢 ROCE has risen from 6.6% to 16.7% over 3 years (+10.1 pts).

🔴 Total Debt has grown at 104.1% a year over 3 years.

🟢 Free Cash Flow has grown at 15.4% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹762 Cr

Total Liabilities

₹219 Cr

Cash & Equivalents

₹6 Cr

Operating Cash Flow

₹47 Cr

Capex

-₹21 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

62.3%

Corporate Actions

Ex-Dividend Date

02 Sept 1996

Peer Comparison

Company	P/E	ROE
TATA CONSULTANCY SERV LT	17.3x	45.6%
INFOSYS LIMITED	15.8x	32.0%
HCL TECHNOLOGIES LTD	20.4x	24.6%
WIPRO LTD	14.5x	15.9%

Recent News

1 positive5 general

Modern Insulators Lower Circuit Today: Price, Data and Peers

Univest, 15 Oct

Modern Insulators Lower Circuit Streak: Day 2 Price and Data

Univest, 16 Oct

Modern Insulators Q1 Net Profit Surges 80% YoY to ₹29 Crore

Sahi, 10 AugResults

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

Modern Insulators Ltd. Shareholding Pattern – Promoters, FIIs & DIIs

Value Research, 30 Aug

Modern Insulators AGM resolutions pass with high majority support

scanx.trade, 30 Sept

Swiggy IPO: Modern Insulators, Madhuri Dixit pick up stake in food aggregator; check details

Upstox, 16 Feb

Watch Items

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

DalalBaazaar Thesis

StrongBusiness Quality · Financial Health · Growth · Profitability

MiddlingValuation · Risk

Points for each in the Score ↑

Good business, demanding price

The quality is real and the price already reflects it. Buying here is a bet that the business keeps compounding for long enough to grow into the multiple — which good businesses often do, but it removes the margin for error that a lower price would have given you. 1 high-severity red flag sits above this conclusion and should be read first.

All 5 tripwires holding · see Key things to watch ↑