Modison Limited

Industrials — Electrical Equipment & Parts · NSE

₹499.25−₹26.25 (−5.00%)

DalalBaazaar Score

71 / 100

🟢 Good

Verdict

REASONABLE

Risk

High

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

In simple words: Strong business and financial position, 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, 8:28 pm

Understanding the Business

Company site ↗

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

What does this company do?

Modison Limited, together with its subsidiaries, manufactures and sells electrical contacts for low, medium, and high voltage switchgear industries in India and internationally.

IndustryElectrical Equipment & Parts

SectorIndustrials

Employees288

Annual revenue₹710 Cr

How does it make money?

Turns over ₹710 Cr a year. Of every ₹100 of sales, about ₹10 reaches shareholders as profit, with ₹17 left at the operating level before interest, tax and depreciation. Each of its 288 employees supports ₹2.46 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹2.46 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 37.0% 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?

Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved +112% while net margin moved +206% 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+112%

Margin effect+206%

DalalBaazaar Score

71/ 100

Good

Weighted across six categories. Every point is explained below.

• Beta of 1.18 — moves roughly with the market
✗ 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

79/ 100

Good

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

Valuation

75/ 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

16.0x

3Y Median

25.1x

40 monthly readings · mean 27.0x · range 15.2x–46.7x

Sector Median

88.8x

median of 3 sector peers

🟢Current valuation is approximately 36% below its 3y median of 25.1x. 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 88.8x.

vs. its own history

Cheap

25.1x median over 40 months · -36%

vs. sector peers

Cheap

88.8x median of 3 peers · -82%

vs. generic bands

Fair

15x–35x

EV/EBITDA

14.8x

PEG

0.18

What's Good / What's Bad

🟢 What's Going Well5

Margins are improving
EBITDA margin is up from 7.7% to 17.1% over 3 years.
Return on equity is rising
ROE has improved from 6.0% to 26.4%.
Return on capital is rising
ROCE has improved from 8.6% to 37.0%.
High return on capital employed
ROCE of 37.0% is the mark of a business that converts capital into profit efficiently.
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

5 items require attention · 5 high

🔴Debt has risen sharplyFinancial
Total debt is up 3388% over 3 years, from ₹5 Cr to ₹174 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 203% against revenue up 112% — sales are being booked faster than they are collected.
🔴Inventory building faster than salesFinancial
Inventory up 180% against revenue up 112% — stock may not be moving.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Capital compounds at a high rate
ROCE of 37.0% 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 7.7% to 17.1%. 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.
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?

Sales are being booked faster than collected
Receivables are up 203% against revenue up 112%. 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.
Several serious flags at once
5 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 21% a year✓ 28.5% CAGR
Latest reported year was 101.6%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 15%✓ 17.1%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Free cash flow remains positive✗ -₹79 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 1.4x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 34%✓ 37.0%
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

5 good · 4 neutral · 2 weak

Market Cap

₹1,620 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

16.0x

Fair

Fairly valued against the generic band

P/B Ratio

5.90x

Rich

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

EPS (TTM)

₹31.29

Profitable

Profitable on a per-share basis

ROE

26.4%

Strong

Strong capital efficiency

ROCE

37.0%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

0.64x

Moderate

Moderate leverage

Revenue Growth (YoY)

101.6%

Healthy

Healthy top-line growth

Profit Growth (YoY)

604.7%

Healthy

Profits growing at a healthy clip

Dividend Yield

1.60%

Modest

Small cash return — most of the return has to come from the price

Free Cash Flow

-₹79 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

Operating Margin

17.7%

Good

Healthy core-business profitability

Net Margin

12.0%

Good

Strong bottom-line conversion

Current Ratio

1.81

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

1.18

Market-like

Moves roughly in line with the market

52W Range Position

89%

Near high

Near its 52-week high

Technical Snapshot

SMA 20 / SMA 50

477.5 / 438.8

Bullish alignment (short > long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

60.4

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹334 Cr	₹404 Cr	₹489 Cr	₹710 Cr	+28.5%
EBITDA	₹26 Cr	₹33 Cr	₹47 Cr	₹122 Cr	+67.7%
EBITDA Margin	7.7%	8.1%	9.5%	17.1%	—
PAT (Net Profit)	₹11 Cr	₹21 Cr	₹25 Cr	₹73 Cr	+86.5%
EPS	₹3.44	₹6.58	₹7.61	₹22.35	+86.6%
ROE	6.0%	10.5%	11.4%	26.4%	—
ROCE	8.6%	15.2%	17.3%	37.0%	—
Total Debt	₹5 Cr	₹32 Cr	₹73 Cr	₹174 Cr	+226.7%
Free Cash Flow	₹10 Cr	-₹15 Cr	-₹32 Cr	-₹79 Cr	—

🟢 Revenue has grown at 28.5% a year over 3 years.

🟢 EBITDA has grown at 67.7% a year over 3 years.

🟢 EBITDA Margin has risen from 7.7% to 17.1% over 3 years (+9.4 pts).

🟢 PAT (Net Profit) has grown at 86.5% a year over 3 years.

🟢 EPS has grown at 86.6% a year over 3 years.

🟢 ROE has risen from 6.0% to 26.4% over 3 years (+20.4 pts).

🟢 ROCE has risen from 8.6% to 37.0% over 3 years (+28.4 pts).

🔴 Total Debt has grown at 226.7% a year over 3 years.

🔴 Free Cash Flow has turned negative, from ₹10 Cr to -₹79 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹503 Cr

Total Liabilities

₹228 Cr

Cash & Equivalents

₹0 Cr

Operating Cash Flow

-₹64 Cr

Capex

-₹15 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

68.2%

Corporate Actions

Dividend Rate

₹8

Ex-Dividend Date

23 Oct 2026

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 positive3 mixed1 general

Modison Declares ₹4 Interim Dividend; Shares Fall 5%

HDFC Sky, 16 OctCapital return

🟢Potentially positiveCash or shares returned to holders. A buyback is only good value if the shares were cheap when bought.

Modison Lower Circuit Today: Price, Data and Peers

Univest, 15 Oct

Modison Q2 Profit Doubles to Rs 23.3 Crore on Higher Sales

Equitypandit, 16 OctResults

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

Stock split, bonus, dividend, buyback record date in 19-25Oct week: Angel One, JSW, IRFC, Tech Mahindra, Modison, others

Livemint, 18 OctCapital return

🟢Potentially positiveCash or shares returned to holders. A buyback is only good value if the shares were cheap when bought.

Modison's (NSE:MODISONLTD) Promising Earnings May Rest On Soft Foundations

Simply Wall Street, 29 MayResults

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

MODISON Share Price Target 2027 to 2030: Analyst Outlook

Univest, 18 AugAnalyst view

🟡Mixed / dependsBroker commentary — an opinion about the price rather than new information about the business.

Watch Items

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

DalalBaazaar Thesis

StrongBusiness Quality · Growth · Profitability

MiddlingFinancial Health · Valuation

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. 5 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 ↑