1. At a Glance
A PSU that’s not a PSU in behavior — MSTC throws out ₹400 Cr+ in net profit while running e-auctions for governments and trading industrial scrap. It’s a dividend-popping, margin-rocking, quietly profitable gem… with a serious debtor problem.
2. Introduction with Hook
You know that shady kabadiwala in every Indian mohalla? Now imagine he went public, digitized, and got the GoI seal of approval.
That’s MSTC.
- FY25 Net Profit: ₹407 Cr
- Dividend Yield: 7.57%
- ROCE: 25.6%
It’s like someone took a rusted iron pipe and turned it into a golden tap of free cash flow.
3. Business Model (WTF Do They Even Do?)
MSTC has two powerful engines:
1. Trading Business (~37% of revenue)
- Buys/imports raw materials like scrap, coke, naphtha, coils
- Acts as facilitator → earns margin per transaction
- Works with steel, petrochemical industries
2. E-Commerce / Auction Business
- Go-to auction house for:
- Coal India
- State disinvestment auctions
- Govt machinery & vehicle disposal
- Forest/agro/mineral product bidding
- Recently expanded into online B2B commerce
MSTC = metal + software + margins
4. Financials Overview
| Year | Revenue (₹ Cr) | Net Profit (₹ Cr) | OPM (%) | EPS (₹) |
|---|---|---|---|---|
| FY21 | ₹780 | ₹113 | -7% | ₹16.05 |
| FY22 | ₹876 | ₹199 | 1% | ₹28.28 |
| FY23 | ₹721 | ₹242 | 27% | ₹34.37 |
| FY24 | ₹751 | ₹204 | 21% | ₹29.03 |
| FY25 | ₹311 | ₹407 | 57% | ₹57.82 |
Yes, revenue is falling, but profits are booming – high-margin, asset-light auction biz in play.
5. Valuation
- P/E: 19.2
- Dividend Yield: 7.57% (juicy)
- Book Value: ₹105 → CMP = 5.1x BV
- Fair Value Range: ₹450 – ₹600
Based on:- 25% ROCE
- 50%+ dividend payout
- Consistent net profit CAGR
- Massive optionality in e-commerce govt auctions
6. What’s Cooking – News, Triggers, Drama
- FSNL stake divested (Ferro Scrap Nigam Ltd) → ₹90 Cr+ gain
- e-Auction contracts with Coal India, Telangana Govt, and others
- Massive other income in FY25: ₹340 Cr
- Dispute win against Standard Chartered Bank: ₹90 Cr refund
- High visibility in disinvestment era: MSTC = execution partner
- Upcoming GovTech boom? MSTC’s platform already handles public auctions
7. Balance Sheet
| Metric | FY25 |
|---|---|
| Equity Capital | ₹70 Cr |
| Reserves | ₹668 Cr |
| Borrowings | ₹145 Cr |
| Total Assets | ₹2,118 Cr |
| Fixed Assets | ₹65 Cr |
| Investments | ₹12 Cr |
| Other Assets | ₹2,042 Cr |
Lean and mean.
Most of the balance sheet is liquid or low-risk working assets.
8. Cash Flow – Sab Number Game Hai
| Year | CFO (₹ Cr) | CFI (₹ Cr) | CFF (₹ Cr) | Net Flow (₹ Cr) |
|---|---|---|---|---|
| FY23 | ₹844 | -₹551 | -₹119 | ₹175 |
| FY24 | -₹312 | -₹244 | -₹96 | -₹653 |
| FY25 | ₹260 | ₹165 | -₹289 | ₹136 |
- Big swings from working capital
- FY24 negative CFO likely from debtor spike
- FY25 bounce-back due to recovery from SCB & auctions
9. Ratios – Sexy or Stressy?
| Metric | FY25 |
|---|---|
| ROCE | 25.6% |
| ROE | 24.2% |
| OPM | 57% |
| Dividend Yield | 7.57% |
| Debtor Days | 363 |
| CCC | 363 days |
| Working Cap | -984 days |
Debtor days = 🚨
But dividend yield = 🔥
This stock is either an operational miracle or a cash-flow illusion. Possibly both.
10. P&L Breakdown – Show Me the Money
| Quarter | Sales (₹ Cr) | OPM (%) | Other Income (₹ Cr) | Net Profit (₹ Cr) | EPS (₹) |
|---|---|---|---|---|---|
| Q1 FY25 | ₹69 | 56% | ₹40 | ₹62 | ₹8.79 |
| Q2 FY25 | ₹72 | 54% | ₹34 | ₹56 | ₹8.01 |
| Q3 FY25 | ₹81 | 58% | ₹291 (!) | ₹251 | ₹35.63 |
| Q4 FY25 | ₹89 | 59% | ₹13 | ₹76 | ₹10.73 |
Q3 was a blowout – mostly thanks to windfall other income.
Core profit? Still consistent.
11. Peer Comparison
| Company | CMP (₹) | ROE (%) | P/E | Div Yield (%) | Sales (₹ Cr) | PAT (₹ Cr) |
|---|---|---|---|---|---|---|
| MSTC | ₹535 | 24.2 | 19.2 | 7.57 | ₹311 | ₹407 |
| MMTC | ₹68 | 5.86 | 104 | 0.00 | ₹3 | ₹87 |
| Redington | ₹310 | 14.3 | 20.8 | 2.19 | ₹99,333 | ₹1,170 |
MSTC = lean, high yield, focused
MMTC = ghost
Redington = operational giant, lower yield
12. Miscellaneous – Shareholding, Promoters
| Category | Jun 2025 |
|---|---|
| Promoters | 64.75% |
| FIIs | 5.37% |
| DIIs | 1.34% |
| Public | 28.54% |
- Promoter holding stable
- FIIs increasing gradually
- Public has grown in last 1 year (profit-following)
13. EduInvesting Verdict™
MSTC is the perfect PSU cocktail:
✅ High dividend
✅ High margins
✅ High RoE
✅ Low drama
✅ Government clients
✅ Digital-first platform business
But beware the 363-day debtor cycle — this ain’t a SaaS company.
That said, the auction business has serious legs. If PSU disinvestment becomes an everyday festival, MSTC could be the main caterer.
Metadata
- Written by: EduInvesting Research Team | Date: 20 July 2025
- Tags: MSTC Ltd, PSU, Scrap Trading, E-Auction, Dividend Stock, Government eCommerce
