Munjal Showa Ltd Q2 FY26 – The Shock Absorber That Needs a Shock Therapy!
1. At a Glance
Picture this: a Hero Group company that built India’s first love affair with motorcycle suspension is now trading at ₹128, about 23% below its 52-week high, and delivering a P/E of 19.8x while showing a return on equity that could barely fund a tea break at a Gurgaon dhaba – just 0.7%. Yes, we’re talking about Munjal Showa Ltd (MSL), the auto-component veteran that makes shock absorbers for Hero MotoCorp, Honda, and Maruti Suzuki.
With a market cap of ₹513 crore, zero debt, and a generous dividend yield of 3.5%, the company seems like that old Hero Splendor: still running, just not exciting anyone. The September 2025 quarter clocked ₹333 crore in revenue (up 4.69% QoQ) and a PAT of ₹2.73 crore (down sharply 67% QoQ). It’s the kind of “bounce” that even a worn-out shock absorber would be embarrassed by.
On the bright side, this small-cap refuses to borrow a rupee, sits on a pile of cash reserves worth ₹666 crore, and continues paying out more than 59% of profits as dividends — basically, returning more cash to shareholders than it seems to make in operational excitement.
Can this Hero sidekick ever rediscover its rhythm? Let’s dig in.
2. Introduction
Munjal Showa has been around since 1985, when cassette players were the iPods of India. Back then, Hero Honda was the icon, and Munjal Showa was its silent partner ensuring your rear wheel didn’t bounce off every pothole in Delhi.
Fast forward to 2025, and the company is still doing the same thing — manufacturing shock absorbers, struts, and gas springs. The catch? The Indian automobile industry moved to turbocharged EVs, high-end suspension tech, and digitally tuned dampers. Munjal Showa, meanwhile, looks like it’s still fine-tuning the carburetor.
Its dependence on Hero MotoCorp (83% of total revenue) has turned into both a blessing and a curse. Hero sells millions of bikes, but margins are razor thin and pricing power belongs to the OEM, not the supplier.
Despite the limited glamour, there’s something intriguing here — a debt-free balance sheet, steady dividends, and a legacy of engineering reliability. But the story now sounds like “Hero’s old faithful friend” rather than “rising auto innovator.”
Still, when you’ve been part of every Hero Splendor, Passion, and Maestro on Indian roads, you deserve a second look — even if your growth chart feels like a flat highway.
3. Business Model – WTF Do They Even Do?
Munjal Showa’s entire business revolves around one simple thing: absorbing shocks, literally. The company manufactures front forks, rear cushions, struts, gas springs, and window balancers — all parts that keep your vehicle from rattling like a maraca.
They operate under one business segment — Shock Absorbers — which serves both 2-wheelers and 4-wheelers.
2W portfolio: front and rear suspension units for Hero Splendor, HF Deluxe, Passion, Maestro, and even some Honda models.
4W portfolio: struts and gas springs for Maruti Suzuki and Honda City.
The company’s technical collaboration with Hitachi Japan gives it access to design support and high-end suspension tech. That said, its product catalogue hasn’t seen much radical diversification.
MSL has three manufacturing plants — at Gurugram, Manesar, and Haridwar, all strategically close to Hero and Maruti facilities. Exports are minimal because its Japanese partner Showa (now part of Hitachi Astemo) already caters to overseas OEMs.
In short, Munjal Showa is that dependable OEM supplier who has stuck to the same job description for 40 years — no pivots, no drama, no debt, and no startup flair.
But hey, you can’t crash if you never accelerate.
4. Financials Overview
Lock: Quarterly Results (Sep 2025) – all calculations based on the latest quarter.
Metric (₹ Cr)
Latest Qtr (Sep 25)
YoY Qtr (Sep 24)
Prev Qtr (Jun 25)
YoY %
QoQ %
Revenue
333
317
286
5.0%
16.4%
EBITDA
3.13
-5.23
1.57
NA
99.4%
PAT
2.73
2.05
8.28
33.2%
-67.0%
EPS (₹)
0.68
0.51
2.07
33.3%
-67.1%
Commentary: The company’s quarterly performance looks like a trampoline — a mix of small jumps and bigger falls. Sales growth is steady but uninspiring. Operating profit margins are wafer-thin at 0.9%, which means almost every rupee earned goes to raw materials and labour.
PAT dropped from ₹8.28 crore in June 2025 to ₹2.73 crore in September 2025 — that’s what happens when “other income” plays a starring role. EPS annualized (₹0.68 × 4 = ₹2.72) gives a forward P/E of 47x, which is frankly absurd unless the market expects a miracle or a Hero dividend bump.
5. Valuation Discussion – Fair Value Range (Educational Only)
a) P/E Method: Industry P/E = 31.8x Company EPS (TTM) = ₹6.48 Fair Value Range = ₹6.48 × (20x to 30x) = ₹129.6 – ₹194.4
c) DCF (using historical FCF ~₹11–₹37 crore, growth ~3%) Present Value = ₹130–₹160
👉 Educational Fair Value Range: ₹130 – ₹160 per share. (This fair value range is for educational purposes only and is not investment advice.)
6. What’s Cooking – News, Triggers, Drama
2025 has been a soap opera year for Munjal Showa. Here’s the spicy recap:
Tax Troubles: Between March and October 2024, the company got slapped with multiple tax demand notices totalling over ₹90 crore — probably the only “growth” it showed that year.
Resignations Galore: From the Joint Managing Director Yasuhiro Ashiki to the Company Secretary Neha Bansal, the HR department saw more exits than a mall during Diwali sales.
CRISIL Downgrades: In Aug 2025, CRISIL downgraded the company’s long-term rating to A-/Stable and withdrew its commercial paper program.
Leadership Shuffle: In November 2025, MSL appointed CS Ravinder Sharma and Vipin Yadav (VP Operations). Fresh faces, old problems.
Hero Dependence: Still 83% of revenue comes from Hero MotoCorp. Basically, if Hero sneezes, MSL catches a financial cold.
The company seems to be stuck in “boring but safe” mode — no debt, no expansion, no exports boom, just mild vibrations in earnings.
