MSTC Limited

Industrials — Conglomerates · NSE

₹647.00−₹2.40 (−0.37%)

DalalBaazaar Score

56 / 100

🟡 Moderate

Verdict

NEUTRAL

Risk

Moderate

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, 7:00 pm

Understanding the Business

Company site ↗

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

What does this company do?

MSTC Limited engages in providing e-commerce and scrap recovery services in India. The company operates in two segments, Marketing and E-Commerce. It is involved in e-procurement, e-auction, tender, recycling, and e-sale business, as well as trading business.

IndustryConglomerates

SectorIndustrials

Employees289

Annual revenue₹331 Cr

How does it make money?

Turns over ₹331 Cr a year. Of every ₹100 of sales, about ₹66 reaches shareholders as profit, with ₹91 left at the operating level before interest, tax and depreciation. Each of its 289 employees supports ₹1.15 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹1.15 Cr

Who are its competitors?

The closest listed comparisons in its industry are LARSEN & TOUBRO LTD., SIEMENS LTD, ABB 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?The numbers suggest a real one

ROCE has stayed above 15% in every year available and stands at 31.3%. Returns that high normally get competed away; when they persist, something is protecting them, and its ROE of 24.2% against a peer median of 15.2% is consistent with that. What that something is — brand, scale, switching costs, regulation — the accounts cannot tell you.

Peer median ROE15.2%

What has been driving growth?

Sales and margins have both contributed to where profit is now. Over 3 years revenue moved +14% while net margin moved -21% 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+14%

Margin effect-21%

DalalBaazaar Score

56/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ Revenue CAGR of only 4.4% — barely ahead of inflation
✗ Profit has declined at 3.4% a year
✗ Profit is compounding slower than revenue — margins are being squeezed as the business grows

Quality vs. Valuation

Company Quality

58/ 100

Average

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

Valuation

69/ 100

Cheap

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

19.4x

3Y Median

20.9x

40 monthly readings · mean 18.8x · range 6.3x–34.9x

Sector Median

88.8x

median of 3 sector peers

🟡Currently trading close to its 3y median of 20.9x — the market is paying about what it usually pays for this company.

🟢Against its sector it trades 78% below the peer median of 88.8x.

vs. its own history

Fair

20.9x median over 40 months · -7%

vs. sector peers

Cheap

88.8x median of 3 peers · -78%

vs. generic bands

Fair

15x–35x

EV/EBITDA

13.7x

PEG

0.52

What's Good / What's Bad

🟢 What's Going Well3

High return on capital employed
ROCE of 31.3% is the mark of a business that converts capital into profit efficiently.
Very low debt
Debt/Equity of 0.16x leaves the balance sheet with plenty of headroom.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention2

Return on equity is falling
ROE has dropped from 30.8% to 24.2% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 36.9% to 31.3% — often a sign of competition or overexpansion.

Red Flags

2 items require attention · 1 high · 1 watch

🔴Significant margin compressionFinancial
EBITDA margin has fallen 55.5 points, from 146.9% to 91.4%.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹50 Cr in the latest year.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Capital compounds at a high rate
ROCE of 31.3% 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.
Cheaper than its peers
It trades 78% 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 146.9% to 91.4%. If the trend continues, profit falls even on flat sales — and margin decline rarely reverses quickly.
Growth barely outpaces inflation
Revenue compounding at 4.4% a year is close to the rate prices rise, so the business is gaining little ground in real terms. That leaves the share price dependent on a re-rating rather than on earnings growth.
Returns on shareholder capital are falling
ROE has dropped from 30.8% to 24.2%. 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.

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

1EBITDA margin holds above 89%✓ 91.4%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Free cash flow remains positive✗ -₹50 Cr
Profit that never becomes cash eventually stops being profit.
3Revenue growth stays above 4% a year✓ 4.4% CAGR
Latest reported year was 21.7%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
4Debt / EBITDA stays below 2x✓ 0.5x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 28%✓ 31.3%
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

7 good · 2 neutral · 2 weak

Market Cap

₹4,555 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

19.4x

Fair

Fairly valued against the generic band

P/B Ratio

5.04x

Rich

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

EPS (TTM)

₹33.29

Profitable

Profitable on a per-share basis

ROE

24.2%

Strong

Strong capital efficiency

ROCE

31.3%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

0.16x

Low

Conservative leverage

Revenue Growth (YoY)

21.7%

Healthy

Healthy top-line growth

Profit Growth (YoY)

37.6%

Healthy

Profits growing at a healthy clip

Dividend Yield

2.43%

Healthy

Meaningful cash return while you hold the stock

Free Cash Flow

-₹50 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

Operating Margin

58.1%

Good

Healthy core-business profitability

Net Margin

60.6%

Good

Strong bottom-line conversion

Current Ratio

1.49

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.60

Defensive

Steadier than the market

52W Range Position

64%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

702.4 / 697.7

Bullish alignment (short > long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

21.1

Oversold zone

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹291 Cr	₹282 Cr	₹283 Cr	₹331 Cr	+4.4%
EBITDA	₹428 Cr	₹388 Cr	₹254 Cr	₹303 Cr	-10.9%
EBITDA Margin	146.9%	137.5%	89.8%	91.4%	—
PAT (Net Profit)	₹242 Cr	₹165 Cr	₹407 Cr	₹218 Cr	-3.4%
EPS	₹34.37	₹23.44	₹57.82	₹31.03	-3.4%
ROE	30.8%	25.5%	55.1%	24.2%	—
ROCE	36.9%	40.9%	66.1%	31.3%	—
Total Debt	₹145 Cr	₹145 Cr	₹145 Cr	₹145 Cr	+0.1%
Free Cash Flow	₹810 Cr	-₹390 Cr	₹236 Cr	-₹50 Cr	—

🟢 Revenue has grown at 4.4% a year over 3 years.

🔴 EBITDA has shrunk at 10.9% a year over 3 years.

🔴 EBITDA Margin has fallen from 146.9% to 91.4% over 3 years (-55.5 pts).

🔴 PAT (Net Profit) has shrunk at 3.4% a year over 3 years.

🔴 EPS has shrunk at 3.4% a year over 3 years.

🔴 ROE has fallen from 30.8% to 24.2% over 3 years (-6.6 pts).

🔴 ROCE has fallen from 36.9% to 31.3% over 3 years (-5.6 pts).

🟡 Total Debt has been broadly flat over 3 years (0.1% a year).

🔴 Free Cash Flow has turned negative, from ₹810 Cr to -₹50 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹2,011 Cr

Total Liabilities

₹1,107 Cr

Cash & Equivalents

₹554 Cr

Operating Cash Flow

-₹28 Cr

Capex

-₹22 Cr

Shareholding (proxy)

Institutional Holding

3.6%

Insider Holding

64.7%

Corporate Actions

Dividend Rate

₹15.7

Ex-Dividend Date

17 Sept 2026

Peer Comparison

Company	P/E	ROE
LARSEN & TOUBRO LTD.	30.1x	15.2%
SIEMENS LTD	88.8x	10.5%
ABB INDIA LIMITED	92.6x	19.1%

Recent News

2 positive2 mixed2 general

Why MSTC Share Price is Rising

Equitymaster, 30 Jun

MSTC share price zooms 17% as Cabinet clears vehicle scrappage scheme

Business Standard, 04 Jun

MSTC shares surge 7% on scrappage incentives in new Delhi EV policy 2026, extend one-month rally to 57%

Moneycontrol.com, 29 JunPrice 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.

MSTC Shares Surge 17% After Government's Scheme For Upgrading Old Trucks, Buses In Delhi — Here's Why

NDTV Profit, 04 JunPrice 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.

MSTC (NSE:MSTCLTD) Has Announced A Dividend Of ₹7.60

Simply Wall Street, 16 FebCapital return

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

MSTC Q1FY27 profit rises 31% to ₹582M; exits legacy trading segment

scanx.trade, 14 AugResults

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

Watch Items

Cross-check against the company's latest quarterly filing / investor presentation before acting.
RSI is in oversold territory — could mean either a bargain or a stock still falling for good reason. Check the 'why' before assuming reversal.

DalalBaazaar Thesis

StrongBusiness Quality · Profitability

MiddlingFinancial Health · Valuation

WeakGrowth · Risk

Points for each in the Score ↑

Unremarkable in both directions

A reasonable business at a reasonable price. Nothing here is alarming and nothing is compelling, which usually means the decision rests on things this data cannot see — the industry's direction, management's intent, and what else is available to you. 1 high-severity red flag sits above this conclusion and should be read first.

1 of 5 tripwires tripped — Free cash flow remains positive · see Key things to watch ↑