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Check Before You Invest : Midwest Energy Ltd

BSE: 526570 NSE: ISIN: INE519N01014
  |   Sector:  Construction & Infrastructure   |   Industry:  Ceramics/Marble/Granite/Sanitaryware

Snapshot

Q.1 Which industry/sub-sector does Midwest Energy Ltd belong to?
Midwest Energy Ltd belongs to the Construction & Infrastructure sector, operating specifically within the Ceramics/Marble/Granite/Sanitaryware segment.
Q.2 Is Midwest Energy Ltd a good quality company?
Midwest Energy Ltd is a weak quality company, based on a inconsistent multi-year financial track record.

This assessment is based on company’s performance on Revenue growth, ROCE, Equity and Assets, key margin ratios, cash conversion cycle, and debt to cash flow from operations and how it compares with its long term averages.

Q.3 Is Midwest Energy Ltd undervalued or overvalued?
Midwest Energy Ltd appears Undervalued, as its key valuation ratios are lower than their past averages.

Based on the industry it operates in, the relevant valuation ratios include one of the following, P/E, P/BV, P/Sales, EV/EBITDA or a combination of two or more.

Valuation Ratios Current 5-year
Historic Median
Price to Earnings 1784.36 -
Price to Book 11.77 -0.52
Price to Sales 203.86 33.93
EV to EBITDA 890.7 -23.68
Q.4 Is Midwest Energy Ltd a good buy now?
Midwest Energy Ltd is not a good buy now, based on weak price trend analysis suggesting prices may fall. However, you need to check its quality and valuation before making a decision

Performance Analysis

We have analysed the performance of the company on the following:

  • How has it performed on generating Profits?

    By checking its Revenue growth, Gross, Operating and Net Margins compared to its last 5-year median.

  • How efficiently has it utilized Capital?

    By checking its ROCE, ROA, ROE and its Cash Conversion Cycle.

  • How is it managing its Debt?

    By checking its Debt to Equity and Cash Flow from Operations.

A: What are the trends in revenue and profit margins?

Q.1 Revenue growth of Midwest Energy Ltd?
Midwest Energy Ltd revenue growth is -57.1% for FY-2025, which is below its 5-year CAGR of -4.95%, indicating slower growth.

Q.2 Gross Profit margin of Midwest Energy Ltd?
Midwest Energy Ltd Gross profit margin which is the profit after deduction of direct costs, is -865.8% for FY-2025, which is below its 5-year median of -398%, indicating decreasing margins.

Q.3 Operating Profit Margin of Midwest Energy Ltd?
Midwest Energy Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is -663.1% for FY-2025, which is below its 5-year median of -296.02% indicating decreasing margins.

Q.4 Net Profit Margin of Midwest Energy Ltd?
Midwest Energy Ltd Net Profit Margin is -882.84% for FY-2025, is below its 5-year median of -548.84%, indicating decreasing margins.
Current Level 5-year
Historic Median
Gross Profit Margin (%) -865.8 -398
Operating Profit Margin (%) -663.1 -296.02
Net Profit Margin (%) -882.84 -548.84

B: Does the business utilize capital efficiently?

Q.5 Return on Asset of Midwest Energy Ltd?
Midwest Energy Ltd Return on Asset is -6.17%, which is above its 5-year historical median of -15.15%, indicating improved asset utilization efficiency.

Q.6 Return on capital employed (ROCE) of Midwest Energy Ltd?
Midwest Energy Ltd Return on capital employed is -2.82% for FY-2025, which is above its 5-year historical median of -16.7%. The current ROCE is below its estimated weighted average cost of capital (WACC) of 14%, indicating value preservation.

Q.7 Cash conversion cycle of Midwest Energy Ltd?
Midwest Energy Ltd Cash conversion cycle is -574 days, below its 5-year historical median of 476 days, indicating improved working capital management. However, you need to compare this with its peers in the industry.

C: How much debt does the business have and is it at a sustainable level?

Q.8 Debt to Equity ratio of Midwest Energy Ltd?
Midwest Energy Ltd Debt-to-Equity ratio is 0.31, which is lower the industry average of 0.32, indicating lower debt levels in the industry.

Q.9 Debt to cash flow from operations of Midwest Energy Ltd?
Midwest Energy Ltd Debt to cash flow from operations is -9.37, which is at a unhealthy level.

Ownership & governance

D: Promoter shareholding and pledge status of Midwest Energy Ltd?

Q.1 Promoter shareholding and pledge status of Midwest Energy Ltd?
Promoters hold 58.45% of the Midwest Energy Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

E: How does Midwest Energy Ltd performance compare with that of its Peers?

Q.1 Revenue growth of Midwest Energy Ltd vs industry peers?
Midwest Energy Ltd revenue CAGR is -4.95%, compared to the industry median CAGR of 0%, indicating slower growth and losing its market share.
Profit Metrics
Current Level 5-year
Industry Median
Revenue Growth (%) -57.1 -
Gross Profit Growth (%) 0 6.3
Operating Profit Growth (%) 0 4
Net Profit Growth (%) 0 12.2
Operating Efficiency
Current Level 5-year
Industry Median
Asset Turnover (x) 0.01 0.57
ROE (%) - 2.7
ROCE (%) -2.82 5.41
Cash Conversion Cycle (days) -574.28 181

Valuation & price assessment

Q.1 Stock return of Midwest Energy Ltd over the last decade?
Over the last 9 year(s), the stock has delivered a CAGR of 79.6% based on the current price.
9Y 5Y 3Y 1Y
Share Price
CAGR
79.6% 196.4% 388.5% 164.8%
Q.2 Valuation ratios of Midwest Energy Ltd vs historical?
The current P/E ratio of 1784.36 is higher than its historical median of , indicating that the stock is trading above its historical average valuation.
Q.3 How do the current valuation ratios compare with 5-year historical median and industry numbers?
Valuation Ratios Current 5-year
Historic Median
5-year
Industry Median
Price to Earnings 1784.36 - 24.16
Price to Book 11.77 -0.52 0.90
Price to Sales 203.86 33.93 1.28
EV to EBITDA 890.7 -23.68 10.79

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