Munjal Showa Limited

Consumer Cyclical — Auto Parts · NSE

₹122.50+₹0.46 (+0.38%)

DalalBaazaar Score

47 / 100

🟡 Moderate

Verdict

CAUTION

Risk

Moderate

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

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, 6:10 pm

Caution warranted. Multiple fundamental metrics — flagged in red below — point to either valuation stretch, leverage risk, or weakening profitability. This doesn't mean avoid the stock outright, but it does mean the burden of proof is on the growth story to justify the current price.

Understanding the Business

Company site ↗

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

What does this company do?

Munjal Showa Limited manufactures and sells auto components for the two-wheeler and four-wheeler industry in India and internationally. Its products include front forks, shock absorbers, struts, gas springs, and window balancers, as well as rear door lifters and rear cushions.

IndustryAuto Parts

SectorConsumer Cyclical

Employees2,299

Annual revenue₹1,309 Cr

How does it make money?

Turns over ₹1,309 Cr a year. Of every ₹100 of sales, about ₹2 reaches shareholders as profit, with ₹2 left at the operating level before interest, tax and depreciation. Each of its 2,299 employees supports ₹56.9 lakh of revenue a year, the signature of a people-led business.

EBITDA margin2.5%

Net margin1.7%

Revenue / employee₹56.9 lakh

Who are its competitors?

The closest listed comparisons in its industry are BOSCH LIMITED, MARUTI SUZUKI INDIA LTD., TVS MOTOR COMPANY LTD, EICHER MOTORS LTD. These are the companies its valuation and returns are measured against elsewhere in this report.

BOSCH LIMITEDP/E 56.9x · ROE 15.9%

MARUTI SUZUKI INDIA LTD.P/E 25.2x · ROE 13.4%

TVS MOTOR COMPANY LTDP/E 56.8x · ROE 35.8%

EICHER MOTORS LTDP/E 34.7x · ROE 23.0%

What is its competitive advantage?Little sign of one

Returns on capital of 4.3% 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.

ROCE4.3%

ROE3.2%

Peer median ROE23.0%

What has been driving growth?

Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved +6% while net margin moved -35% 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+6%

Margin effect-35%

DalalBaazaar Score

47/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ Revenue CAGR of only 2.0% — barely ahead of inflation
✗ Profit has declined at 11.8% a year

Quality vs. Valuation

Company Quality

40/ 100

Weak

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

Valuation

70/ 100

Cheap

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

Optically cheap, but the underlying business scores poorly. Cheap-and-weak is what a value trap looks like from the outside — the low price may be deserved.

Historical Valuation

Current P/E

19.7x

3Y Median

18.9x

40 monthly readings · mean 19.1x · range 14.2x–24.7x

Sector Median

45.7x

median of 4 sector peers

🟡Currently trading close to its 3y median of 18.9x — the market is paying about what it usually pays for this company.

🟢Against its sector it trades 57% below the peer median of 45.7x.

vs. its own history

Fair

18.9x median over 40 months · +4%

vs. sector peers

Cheap

45.7x median of 4 peers · -57%

vs. generic bands

Fair

15x–35x

P/E (Trailing)

19.7x

P/B

0.72x

EV/EBITDA

15.2x

PEG

0.55

Dividend Yield

3.67%

What's Good / What's Bad

🟢 What's Going Well1

Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention2

Free cash flow is negative
The business is not currently covering its capital spending from operations.
Return on capital is falling
ROCE has declined from 6.4% to 4.3% — often a sign of competition or overexpansion.

Red Flags

2 items require attention · 2 watch

🟡Free cash flow is negativeFinancial
Free cash flow was -₹27 Cr in the latest year.
🟡Profit is decliningFinancial
Net profit is down 31% over 3 years.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Cheaper than its peers
It trades 57% 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?

Growth barely outpaces inflation
Revenue compounding at 2.0% 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.
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 0%✓ 2.5%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Free cash flow remains positive✗ -₹27 Cr
Profit that never becomes cash eventually stops being profit.
3Revenue growth stays above 4% a year✗ 2.0% CAGR
Latest reported year was 21.5%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
4ROCE stays above 8%✗ 4.3%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.
5Valuation vs its own median of 18.9x✓ 19.7x today
A re-rating above its own history needs a reason; without one it is just a higher price.

Investment Checklist

5 / 10 checks passed

✗ Strong return on equity (ROE ≥ 15%)
✗ Strong return on capital employed (ROCE ≥ 15%)
✗ Healthy net margin (≥ 10%)
✗ Generates positive free cash flow
✓ 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 · 3 neutral · 3 weak

Market Cap

₹490 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

19.7x

Fair

Fairly valued against the generic band

P/B Ratio

0.72x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹6.21

Profitable

Profitable on a per-share basis

ROE

3.2%

Weak

Weak capital efficiency

ROCE

4.3%

Weak

Low return on total capital employed

Debt/Equity

Not available

No data

Source didn't return this field

Revenue Growth (YoY)

21.5%

Healthy

Healthy top-line growth

Profit Growth (YoY)

35.7%

Healthy

Profits growing at a healthy clip

Dividend Yield

3.67%

Healthy

Meaningful cash return while you hold the stock

Free Cash Flow

-₹27 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

CMP

₹122.5

Operating Margin

-0.1%

Weak

Thin margins leave little room for error

Net Margin

1.8%

Weak

Very little revenue reaches the bottom line

Current Ratio

3.72

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.36

Defensive

Steadier than the market

52W Range Position

33%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

125.5 / 129.0

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

36.8

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹1,235 Cr	₹1,168 Cr	₹1,245 Cr	₹1,309 Cr	+2.0%
EBITDA	₹40 Cr	₹21 Cr	₹29 Cr	₹32 Cr	-6.9%
EBITDA Margin	3.2%	1.8%	2.4%	2.5%	—
PAT (Net Profit)	₹32 Cr	₹31 Cr	₹29 Cr	₹22 Cr	-11.8%
EPS	₹7.98	₹7.69	₹7.22	₹5.47	-11.8%
ROE	4.9%	4.6%	4.3%	3.2%	—
ROCE	6.4%	5.4%	5.1%	4.3%	—
Free Cash Flow	-₹6 Cr	₹7 Cr	₹30 Cr	-₹27 Cr	—

🟡 Revenue has been broadly flat over 3 years (2.0% a year).

🔴 EBITDA has shrunk at 6.9% a year over 3 years.

🟡 EBITDA Margin has held roughly flat at 2.5% over 3 years.

🔴 PAT (Net Profit) has shrunk at 11.8% a year over 3 years.

🔴 EPS has shrunk at 11.8% a year over 3 years.

🔴 ROE has fallen from 4.9% to 3.2% over 3 years (-1.7 pts).

🔴 ROCE has fallen from 6.4% to 4.3% over 3 years (-2.1 pts).

Balance Sheet & Cash Flow — FY2026

Total Assets

₹865 Cr

Total Liabilities

₹187 Cr

Total Debt

—

Cash & Equivalents

₹1 Cr

Operating Cash Flow

-₹21 Cr

Capex

-₹7 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

67.0%

Corporate Actions

Dividend Rate

₹4.5

Ex-Dividend Date

05 Aug 2026

Peer Comparison

Company	P/E	ROE
BOSCH LIMITED	56.9x	15.9%
MARUTI SUZUKI INDIA LTD.	25.2x	13.4%
TVS MOTOR COMPANY LTD	56.8x	35.8%
EICHER MOTORS LTD	34.7x	23.0%

Recent News

2 positive2 mixed2 general

Compare with Munjal Showa

Equitymaster, 16 Oct

Munjal Showa Share Price Target 2026: Bull Case Rs 165, Bear Case

Univest, 01 JulAnalyst view

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

Munjal Showa fixes record date for final dividend

scanx.trade, 02 JunCapital return

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

Munjal Showa Q4 Net Loss Narrows to ₹10 L as Revenue Grows 16.6% to ₹350 Crore

Sahi, 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.

Munjal Showa standalone net profit rises 35.63% in the June 2026 quarter

Business Standard, 03 AugResults

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

Is Munjal Showa the Best Stock in Its Sector? A Look at the Numbers

Univest, 01 Oct

Watch Items

Cross-check against the company's latest quarterly filing / investor presentation before acting.
1 metric couldn't be retrieved for this stock — this is more common for smaller or thinly-covered listings.

DalalBaazaar Thesis

🔴Business QualityWeak7.5/20

🟢Financial HealthStrong13.2/20

🔴GrowthWeak5/20

🔴ProfitabilityWeak4.5/15

🟢ValuationAttractive10.9/15

🟡RiskModerate5.4/10

Cheap, but for a reason

The low price is the whole case here, and the business underneath scores poorly. Cheap-and-weak is what a value trap looks like from the outside — it needs a specific reason the numbers are about to improve, not just the observation that they are low.

This thesis breaks if

✓EBITDA margin holds above 0%2.5%
✗Free cash flow remains positive-₹27 Cr
✗Revenue growth stays above 4% a year2.0% CAGR
✗ROCE stays above 8%4.3%
✓Valuation vs its own median of 18.9x19.7x today