Modison Reports Strong Sales Growth Amid Long-Term Profitability Concerns

Modison, a microcap company in the capital goods sector, has recently undergone an adjustment in evaluation, reflecting a nuanced view of its financial standing. The company reported positive financial performance for the third quarter of FY24-25, with notable growth in key metrics. For instance, the net sales for the first nine months reached Rs 360.17 crore, marking a growth of 23.78%. Additionally, the profit after tax for the half-year period stood at Rs 12.16 crore, showcasing a significant increase of 44.47%.
Despite these positive indicators, the long-term growth trajectory appears constrained, as evidenced by an operating profit growth rate of just 0.30% over the past five years. The stock is currently positioned within a mildly bearish technical range, having experienced a decline of 4.21% since February 21, 2025.

On a more favorable note, Modison demonstrates a strong capacity to manage its debt, reflected in a low Debt to EBITDA ratio of 0.63 times. The return on capital employed (ROCE) is also noteworthy, with a current figure of 11.7, suggesting a fair valuation relative to its enterprise value to capital employed ratio of 1.9.

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