1. At a Glance
Once a humble rice processor, Mishtann Foods exploded its revenue by 158% in two years. But wait—there’s salt, scandals, and SEBI in the kitchen too.
2. Introduction with Hook
Imagine a small-town cook suddenly managing a Michelin-starred restaurant. That’s Mishtann for you. From humble beginnings in Gujarat to global rice export dreams and a Himalayan pink salt pivot, everything smells aromatic—until SEBI walked in, sniffed around, and found Rs. 49.9 crore “misplaced.”
- 158% revenue growth in 2 years.
- 307 debtor days (yes, you read that right).
- SEBI ban on promoters + auditor resignation = investor heartburn.
3. Business Model (WTF Do They Even Do?)
Mishtann is in the FMCG game via staples—rice, salt, wheat, pulses—sold across premium (Snowflake), mid-range (Jasper), and economy brands (Rozana).
They claim pan-India reach with ambitions in export, including “value-added” salts (rock, crystal, Himalayan pink).
But don’t let the pink Himalayan fluff fool you—the real spice is in financial engineering.
4. Financials Overview
Topline Talk:
- FY23 Sales: ₹1,288 Cr → FY25 Sales: ₹1,375 Cr
- FY23 PAT: ₹346 Cr → FY25 PAT: ₹333 Cr
- OPM: FY23 – 28%, FY25 – 25%
- RoE: 44.1%, RoCE: 42.2%
- P/E: 2.22 (insanely cheap… but why?)
Concern Points:
- High receivables: 307 debtor days
- Cash from ops: Negative (₹-49 Cr)
- Zero dividend despite rising PAT
- Promoters offloading stake: From 49.82% → 43.48%
5. Valuation
At ₹6.88, the stock trades at 0.77x book and just 2.2x earnings.
Cheap? Yes.
Deserved? Maybe.
Valuation ranges based on:
| Method | FV Range |
|---|---|
| DCF (Aggressive) | ₹12–₹14 |
| P/E of 10x (clean FMCG avg) | ₹30+ |
| Industry PE median (~76x) | ₹230 (LOL, unrealistic) |
| With Risk Discount (SEBI drama) | ₹6–₹9 fair range |
EduVerdict Valuation Band: ₹6 to ₹14
(Yes, we’re keeping it tight until SEBI calms down)
6. What’s Cooking – News, Triggers, Drama
- SEBI slammed company for misuse of ₹49.9 Cr rights issue
- Statutory Auditor and Company Secretary—both quit
- Promoters banned, appealed decision
- Receivables ballooned, rights issue smells “off”
- Himalayan salt was supposed to be cool. Now it’s spicy.
7. Balance Sheet
| FY | Equity | Reserves | Borrowings | Total Assets |
|---|---|---|---|---|
| FY23 | ₹100 Cr | ₹50 Cr | ₹60 Cr | ₹258 Cr |
| FY24 | ₹103 Cr | ₹448 Cr | ₹47 Cr | ₹646 Cr |
| FY25 | ₹108 Cr | ₹853 Cr | ₹47 Cr | ₹1,182 Cr |
Highlights:
- Borrowings steady, equity and reserves ballooned
- Majority assets = trade receivables
- Zero growth in fixed assets = serious red flag
8. Cash Flow – Sab Number Game Hai
| FY | CFO | CFI | CFF | Net Cash |
|---|---|---|---|---|
| FY23 | ₹-3 Cr | ₹0 Cr | ₹2 Cr | ₹0 Cr |
| FY24 | ₹-54 Cr | ₹0 Cr | ₹54 Cr | ₹0 Cr |
| FY25 | ₹-49 Cr | ₹0 Cr | ₹48 Cr | ₹-0 Cr |
Takeaway:
No real internal cash generation. All smoke (salt) and mirrors (receivables).
9. Ratios – Sexy or Stressy?
| Metric | FY23 | FY24 | FY25 |
|---|---|---|---|
| ROE % | 48% | 89% | 44% |
| ROCE % | 20% | 89% | 42% |
| Inventory Days | 18 | 12 | 1 |
| Debtor Days | 124 | 168 | 307 |
| Cash Conv. Cycle | 140 | 178 | 254 |
Summary:
307 debtor days? That’s a Netflix subscription’s worth of credit cycle.
10. P&L Breakdown – Show Me the Money
| FY | Revenue | Expenses | OPM % | PAT | EPS |
|---|---|---|---|---|---|
| FY23 | ₹1,288 Cr | ₹929 Cr | 28% | ₹346 Cr | ₹3.26 |
| FY24 | ₹1,375 Cr | ₹1,036 Cr | 25% | ₹333 Cr | ₹3.09 |
| FY25 | ₹1,375 Cr | ₹1,036 Cr | 25% | ₹333 Cr | ₹3.09 |
Good margins, consistent PAT. But with accounting fog all around, the numbers are only as trustworthy as the auditor—who has resigned.
11. Peer Comparison
| Company | MCap (₹Cr) | P/E | ROE % | OPM % | Sales (₹Cr) |
|---|---|---|---|---|---|
| Nestle | ₹2,35,878 | 76.2 | 83.0 | 23.6 | ₹20,201 |
| Britannia | ₹1,40,005 | 63.8 | 52.9 | 17.7 | ₹17,942 |
| Bikaji | ₹18,758 | 96.5 | 14.9 | 12.5 | ₹2,621 |
| Mishtann | ₹741 | 2.22 | 44.1 | 24.6 | ₹1,375 |
Conclusion: Mishtann looks like the “value buy”—until you add “SEBI” to the formula.
12. Miscellaneous – Shareholding, Promoters
| Date | Promoter % | FII % | Public % |
|---|---|---|---|
| Jun ‘22 | 49.28% | 0.00% | 50.72% |
| Mar ‘25 | 43.48% | 1.37% | 55.15% |
Red Flags:
- Promoters steadily reducing stake
- Retail frenzy: from 49K shareholders → 4.7 Lakh+
- SEBI ban + auditor exits = not minor
13. EduInvesting Verdict™
Mishtann is the kind of small-cap rags-to-riches FMCG story that gives multibagger dreams to retail investors. But the reality is a cocktail of debtors galore, SEBI drama, and audit resignations. Sure, the margins are juicy and the valuation tempting, but when cash flows are negative and auditors ghost you—it’s time to stop romanticizing the rice.
The fair value range is ₹6 to ₹14, but that only applies if governance improves and books clean up. Until then, Mishtann might be less of a gourmet FMCG pick and more of a courtroom thriller in the making.
Metadata
– Written by EduInvesting Research Team | 18 July 2025
– Tags: Mishtann Foods, FMCG, SEBI, Rice Exporters, Valuation, Auditor Resignation, High Debtor Days, Small Cap Watchlist, FMCG Governance Issues, EduSatire
