🟢 1. At a Glance
Midwest Gold Ltd started life as a granite processor, dabbled in gold mining, lost a CFO, acquired a new subsidiary, and posted a net profit of -₹6.8 Cr on ₹0.78 Cr sales in FY25. Yet the stock is up 2,373% in 1 year, with zero dividends, -544% operating margin, and massive equity dilution.
Clearly, logic took a sabbatical.
🎬 2. Introduction with Hook
You’ve heard of gold rushes.
You’ve heard of meme stocks.
Midwest Gold is both. Except:
- Its quarterly revenue = your local mithai shop
- Its losses are bigger than its topline
- And it has a market cap of ₹1,169 Cr
How?
Through a potent mix of hype, silence, regulatory filings, and a new love story with a mysterious entity called “Midwest Energy.”
Let’s start digging.
🪨 3. Business Model – WTF Do They Even Do?
Midwest Gold has tried it all:
- 🪨 Legacy Business: Granite, marble, and stone processing
- 🥇 Rebranding: Changed name from Nova Granites to include “Gold” (classic SME energy)
- ⛏️ Gold Mining Attempt: Apparently active, but zero mining revenue shown
- 🧃 Now? Acquiring a 97.4% stake in Midwest Energy Pvt Ltd, purpose unknown
As per their own notes: “Evaluating business opportunities to turnaround operations.”
Translation: “We don’t really know yet.”
📉 4. Financials Overview – Profit, Margins, ROE, Growth
| Metric | FY25 |
|---|---|
| Revenue (₹ Cr) | 0.78 |
| Operating Profit | -4.25 |
| OPM % | -544.87% ❌ |
| Net Profit (₹ Cr) | -6.84 |
| EPS (₹) | -5.07 |
Yes, they lost 6.8 Cr on revenue of 78 lakhs. That’s an 8.7X loss multiplier.
💰 5. Valuation – Is It Cheap, Meh, or Crack?
- 📌 CMP: ₹1,058
- 📌 Market Cap: ₹1,169 Cr
- 📌 P/E: Not applicable (no earnings)
- 📌 Book Value: Not disclosed
- 📌 ROE: Also MIA
🧮 Fair Value Range (EduCalc™):
| Scenario | Value ₹ |
|---|---|
| Actual business fair value | ₹10 – ₹25 (based on ₹1 Cr sales & -₹7 Cr loss) |
| Speculation bubble zone | ₹100+ |
| 🚨 Current price = 🚀 Pure hype |
🧨 6. What’s Cooking – News, Triggers, Drama
- 🆕 Acquisition: Midwest Gold acquired 97.4% of Midwest Energy Pvt Ltd (Jan 2025)
- 🧾 Preferential Allotments: Massive equity issue approved to fund this deal
- 📉 CFO Resignation: CFO quit in April 2025, new CFO + director appointed same day
- 📈 Stock up 23x in 1 year
- 🤔 Still no concrete business plan published
Plot: The company went full SME-Soap — gold label, energy pivot, CFO exit, and market cap explosion.
💀 7. Balance Sheet – How Much Debt, How Many Dreams?
| Metric | FY25 |
|---|---|
| Cash from Ops | -₹333 Cr ❌ |
| Cash from Investing | -₹839 Cr ❌ |
| Cash from Financing | ₹1,563 Cr ✅ |
| Net Cash Flow | ₹390 Cr |
They raised ₹1,500+ Cr and burned most of it. Assets and actual numbers not even disclosed in full. No CWIP breakdown. No project updates.
TL;DR: SME shell + cash infusion = 🚩
💵 8. Cash Flow – Sab Number Game Hai
Let’s summarize this madness:
- Raised ₹1,500+ Cr via preferential equity and other means
- Burned ₹1,200+ Cr in ops + investments
- Still showed a “net positive cash flow” on paper
On the ground: No new revenue, no new margin, no clarity.
📐 9. Ratios – Sexy or Stressy?
| Metric | FY25 |
|---|---|
| OPM % | -544% |
| Interest Coverage | LOW |
| ROCE, ROE | NA |
| Promoter Holding | Down 8.88% |
| FII Entry | 6.6% (recent) |
Yes — foreign investors entered just as promoters diluted. Classic SME playbook.
📊 10. P&L Breakdown – Show Me the Money
- Revenue: ₹0.78 Cr
- Operating Loss: ₹4.25 Cr
- Net Loss: ₹6.84 Cr
- Other Income: ₹0.36 Cr
- Interest: ₹2.37 Cr
- EPS: -₹5.07
It’s not just bad. It’s almost performance art.
🥊 11. Peer Comparison – Who Else in the Game?
| Peer | Sales (Cr) | Profit (Cr) | MCap (₹ Cr) | P/E |
|---|---|---|---|---|
| Ramco Industries | ₹1,658 | ₹180.9 | ₹2,448 | 13.5x |
| Everest Industries | ₹1,722 | -₹11.8 | ₹878 | – |
| Midwest Gold | ₹0.78 | -₹6.8 | ₹1,169 | 🚀 |
This is not a comparison. It’s a crime scene.
🧬 12. Miscellaneous – Shareholding, Promoters
| Shareholder | Dec ’24 | Mar ’25 |
|---|---|---|
| Promoters | 72.03% | 63.15% 🔻 |
| FIIs | 0% | 6.62% 🔼 |
| DIIs | 0.63% | 1.86% 🔼 |
| Public | 27.32% | 28.37% 🔼 |
So everyone’s getting in… except the company itself. That says a lot.
🧑⚖️ 13. EduInvesting Verdict™
Midwest Gold Ltd is a full-blown SME spectacle:
✅ Acquisitions, energy pivot, rising FII interest
❌ No core business traction
❌ No clarity on Midwest Energy deal outcomes
❌ CFO quit, margins negative, ROE invisible
❌ Massive preferential allotments = equity dilution tsunami
🎯 Fair Value?
On financials = ₹15
On fantasy = ₹1,058 apparently
Final Take:
“When the granite is hollow and the gold is just in the name… welcome to SME Vegas.”
✍️ Written by Prashant | 📅 10 July 2025
Tags: midwest gold, granite stocks, sme bubble, negative margins, midwest energy acquisition, gold mining india, preferential allotment, suspicious sme rally, fair value midwest gold, loss-making companies multibagger
