Mishra Dhatu Nigam May Be Overvalued By Over 50%: SEBI RA A&Y Market Research

2025-06-10 06:10:47

(MENAFN- AsiaNet News)

Mishra Dhatu Nigam Ltd (MIDHANI) is trading at elevated valuation levels, with an estimated intrinsic value of ₹212–₹223, suggesting it may be overvalued by approximately 50% or more, SEBI-registered analyst A and Y Market Research said.

At the time of writing, MIDHANI shares were trading at ₹442.50, up 5.33% for the day.

According to the analyst, the stock's price-to-earnings (P/E) ratio is around 70–74 times, with a price-to-book (P/B) ratio between 5.5–5.9 times and enterprise value to earnings before interest, taxes, depreciation, and amortization (EV/EBITDA) in the range of 20–32 times.

MIDHANI maintains a net profit margin of approximately 10%, with return ratios including return on equity (ROE) at 7–8%, return on assets (ROA) at 3.7%, and return on capital employed (ROCE) at 10.6%, which A and Y Market Research described as“below industry standards.”

The analyst noted that revenue growth has been moderate, citing a five-year compound annual growth rate (CAGR) of about 8.5% and annual revenue increases between 0–8%.

However, the March 2025 quarter showed a sharp improvement, with a 72% sequential revenue increase and a 120% rise in net profit, potentially due to fresh defense and aerospace orders.

While the company carries minimal leverage with a debt-to-equity ratio of approximately 0.03, the analyst said sustained improvement in return on capital employed and earnings growth would be necessary to justify current valuations.

Technically, the stock faces resistance near ₹444, and declining trading volume suggests buyer exhaustion.

A and Y Market Research identified the ₹322–₹332 range as a potential support zone, noting it previously acted as resistance.

The analyst said a retest of this level could offer a bounce, with target levels at ₹445, ₹496, and ₹550.

On Stocktwits, retail sentiment was 'bearish' amid 'normal' message volume.

The stock has risen 28.9% so far in 2025.

For updates and corrections, email newsroom[at]stocktwits[dot]com.

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