At a Glance
Munjal Showa, Hero Group’s suspension specialist, delivered Q1 FY26 revenue ₹286 Cr (down 8% YoY) and PAT ₹8.3 Cr (EPS ₹2.07). The company trades at P/E 22x, below book value (0.82x), yet investors yawn harder than at a 3-hour AGM. Dividend yield? A juicy 3.3%. Growth? As exciting as watching paint dry. But hey, it’s debt-free, so there’s that.
Introduction
Once a respected OEM supplier with Hitachi tech, Munjal Showa has now become the corporate equivalent of a retired athlete—surviving on dividends and legacy orders. The market cap sits at a modest ₹551 Cr, while revenue hasn’t grown meaningfully in years. Despite strong parentage, the company’s ROE <1% signals it’s just cruising in neutral.
Business Model (WTF Do They Even Do?)
- Products: Front forks, shock absorbers, struts, gas springs, and window balancers.
- Clients: Primarily Hero MotoCorp and other two-wheeler OEMs.
- Edge: Tie-up with Hitachi Japan ensures decent quality.
- Problem: Dependence on a stagnant two-wheeler market + lack of EV-ready components.
Financials Overview
Q1 FY26
- Revenue: ₹286 Cr (vs ₹310 Cr LY)
- EBITDA: ₹1.6 Cr (OPM a miserable 0.55%)
- PAT: ₹8.3 Cr (helped by other income ₹11 Cr)
- EPS: ₹2.07
FY25
- Revenue: ₹1,250 Cr
- PAT: ₹29 Cr
- Margins: OPM 1%, ROCE 0.3% (ouch)
Comment: Operating business barely profitable; other income props up net profit.
Valuation
- CMP: ₹138
- P/E: 21.8x
- Book Value: ₹169
- Fair Value Range: ₹100–₹120 (due to poor fundamentals despite good yield)
What’s Cooking – News, Triggers, Drama
- No growth triggers.
- Dividend: Maintains >3%
