At a Glance
Menon Pistons Ltd just fired up the cylinders this quarter – Q1 FY26 PAT came in at ₹7.77 Cr, up nearly 10% YoY, with revenue at ₹80.3 Cr. The stock zoomed 11.6% as if investors suddenly remembered this company exists. OPM stayed around 16.8% (steady), ROCE at 21.6% keeps it respectable. At a market cap of ₹346 Cr and P/E of 14, this auto component maker looks like a pocket rocket in a market dominated by Bosch and Bharat Forge.
Introduction
Menon Pistons has been around since 1971, quietly churning out pistons and pins for diesel engines, passenger cars, and heavy machinery while big names hogged the limelight. The company supplies to multiple industries – automotive, power generation, compressors, earthmovers – basically anywhere something goes “vroom”.
Despite its size, Menon Pistons has a knack for consistent profitability. Sales have grown at a modest 6% CAGR, profits at 8% over three years, and dividends flow steadily (1.47% yield). It’s like that reliable friend – not flashy, but always shows up when needed.
Q1 FY26 shows the company is holding ground, improving margins, and slowly attracting market attention.
Business Model (WTF Do They Even Do?)
Menon Pistons manufactures:
- Aluminium Alloy Pistons – lightweight, used in cars and LCVs.
- Forged Steel Pistons – heavy-duty engines, earthmovers, trucks.
- Piston Pins – essential parts in engine assemblies.
Revenue sources:
- OEMs (Original Equipment Manufacturers): Large part of sales.
- Aftermarket & Exports: Steadily growing.
The business is cyclical, tied to auto demand, but its diversified applications reduce risk.
Financials Overview
Q1 FY26 Numbers:
- Revenue: ₹80.3 Cr (+15.7% QoQ)
- EBITDA: ₹13.5 Cr (16.8% margin)
- PAT: ₹7.8 Cr (EPS ₹1.52)
FY25 Performance:
- Revenue: ₹254 Cr
- PAT: ₹24 Cr
- ROE: 16.1%
Commentary: Consistent margins around 17–18% reflect operational discipline. Growth is steady, not spectacular, but profitability is solid for a small-cap.
Valuation
- P/E Method
- EPS (TTM): ₹4.81
- Industry P/E: ~18
- Fair Price = ₹4.81 × 18 = ₹87
- EV/EBITDA
- EV ≈ ₹346 Cr + ₹17 Cr (debt) – minimal cash ≈ ₹363 Cr
- EBITDA (TTM): ₹45 Cr
- EV/EBITDA ≈ 8x
- Fair Price ~ ₹80–90
- DCF (Conservative)
- Assume 6% growth, 12% discount rate → value ₹75–85
🎯 Fair Value Range: ₹75 – ₹90
At ₹67.8, the stock trades below fair value, giving room for upside.
What’s Cooking – News, Triggers, Drama
- Q1 FY26 Beat: Revenue up 15.7%, PAT up 9.9%.
- CARE Ratings: Reaffirmed A-/A2+ (stable).
- Export Orders: New clients in diesel engine segment rumored.
- Risks: Raw material cost swings, slowdown in auto demand.
Balance Sheet
| (₹ Cr) | Mar 2025 |
|---|---|
| Assets | 214 |
| Liabilities | 57 |
| Net Worth | 157 |
| Borrowings | 17 |
Remarks: Low debt, high reserves – the balance sheet is as solid as their steel pistons.
Cash Flow – Sab Number Game Hai
| (₹ Cr) | Mar 2023 | Mar 2024 | Mar 2025 |
|---|---|---|---|
| Operating | 49 | 24 | 39 |
| Investing | -24 | -22 | -25 |
| Financing | -25 | 0 | -14 |
Remarks: Positive operating cash flows, modest capex, low financing needs. Cash game under control.
Ratios – Sexy or Stressy?
| Metric | Value |
|---|---|
| ROE | 16.1% |
| ROCE | 21.6% |
| P/E | 14.1x |
| PAT Margin | 9.4% |
| D/E | 0.11 |
Remarks: Ratios lean “sexy” for a small-cap, with low debt and solid returns.
P&L Breakdown – Show Me the Money
| (₹ Cr) | FY23 | FY24 | FY25 |
|---|---|---|---|
| Revenue | 251 | 258 | 254 |
| EBITDA | 44 | 48 | 45 |
| PAT | 23 | 26 | 24 |
Remarks: Flat FY25 due to auto slowdown, but Q1 FY26 suggests recovery.
Peer Comparison
| Company | Revenue (₹ Cr) | PAT (₹ Cr) | P/E |
|---|---|---|---|
| Bosch | 18,087 | 2,012 | 58.4 |
| Schaeffler India | 8,547 | 1,058 | 60.0 |
| Uno Minda | 16,775 | 934 | 65.9 |
| Menon Pistons | 265 | 25 | 14.1 |
Remarks: Menon trades at a deep discount to peers. Undervalued? Quite possibly.
Miscellaneous – Shareholding, Promoters
- Promoters: 74.37% (very high, stable control)
- FIIs: 0.03% (non-existent)
- Public: 25.61%
Sarcastic Take: FIIs ignoring Menon? Great, more room for retail investors to grab the pistons.
EduInvesting Verdict™
Menon Pistons is the quiet achiever of the auto components space. It doesn’t shout, doesn’t hype, but delivers steady profits and dividends. At P/E 14, it’s undervalued relative to industry giants. Q1 FY26 growth is promising, and the company has room to surprise if auto demand picks up.
SWOT Quickie:
- Strengths: Low debt, strong margins, high promoter holding.
- Weaknesses: Small scale, low liquidity.
- Opportunities: Export growth, OEM orders.
- Threats: Auto industry cyclicality, raw material costs.
Final Word: Menon Pistons is like a diesel engine – slow to heat, but once running, it’s unstoppable. For patient investors, this small-cap could turn into a torque monster.
Written by EduInvesting Team | 30 July 2025
SEO Tags: Menon Pistons, Auto Components Stocks, Q1 FY26 Results, Small Cap Analysis
