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INVESTMENT INSIGHTS

Check Before You Invest : Southern Magnesium & Chemicals Ltd

BSE: 513498 NSE: ISIN: INE308N01012
  |   Sector:  Metals & Mining   |   Industry:  Metal - Non Ferrous

Snapshot

Q.1 Which industry/sub-sector does Southern Magnesium & Chemicals Ltd belong to?
Southern Magnesium & Chemicals Ltd belongs to the Metals & Mining sector, operating specifically within the Metal - Non Ferrous segment.
Q.2 Is Southern Magnesium & Chemicals Ltd a good quality company?
Southern Magnesium & Chemicals Ltd is a quality company, based on a 10 year financial track record.
Q.3 Is Southern Magnesium & Chemicals Ltd undervalued or overvalued?
Southern Magnesium & Chemicals Ltd appears Fair, as its key valuation ratios are in line with their past averages.
Q.4 Is Southern Magnesium & Chemicals Ltd a good buy now?
Southern Magnesium & Chemicals 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

Q.1 Revenue growth of Southern Magnesium & Chemicals Ltd?
Southern Magnesium & Chemicals Ltd revenue growth is 31.3% for FY-2025 , which is below its 5 year CAGR of 50.9% , indicating slower growth.
Q.2 Gross Profit margin of Southern Magnesium & Chemicals Ltd?
Southern Magnesium & Chemicals Ltd Gross profit margin which is the profit after deduction of direct costs, is 34.9% for FY-2025 , which is in line with its 5 year median of 34.9% , indicating stable margins.
Q.3 Operating Profit Margin of Southern Magnesium & Chemicals Ltd?
Southern Magnesium & Chemicals Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 31.46% for FY-2025 , which is in line with its 5 year median of 31.46% indicating stable margins.
Q.4 Net Profit Margin of Southern Magnesium & Chemicals Ltd?
Southern Magnesium & Chemicals Ltd Net Profit Margin is 25.72% for FY-2025 , is in line with with its 5 year median of 25.72%, indicating stable margins.
Current Level Historic Median
Gross Profit Margin 34.9 34.9
Operating Profit Margin 31.46 31.46
Net Profit Margin 25.72 25.72
Q.5 Return on Asset of Southern Magnesium & Chemicals Ltd?
Southern Magnesium & Chemicals Ltd Return on Asset is 19.6%, which is in line with its 5 year historical median of 19.6%, indicating stable asset utilization efficiency.
Q.6 Return on Equity (ROE) of Southern Magnesium & Chemicals Ltd?
Southern Magnesium & Chemicals Ltd Return on equity is 28.24% for FY-2025 , which is in line with its historical median of 28.24%, indicating the business is making similar use of its shareholders capital.
Q.7 Return on capital employed (ROCE) of Southern Magnesium & Chemicals Ltd?
Southern Magnesium & Chemicals Ltd Return on capital employed is 31.14% for FY-2025 , which is above its estimated weighted average cost of capital(WACC) 14%, indicating value creation.
Q.8 Cash conversion cycle of Southern Magnesium & Chemicals Ltd?
Southern Magnesium & Chemicals Ltd Cash conversion cycle is 222 days, above its historical median of 222 days, indicating deteriorated working capital management. However, you need to compare this with its peers in the industry.
Current Level Historic Median
Asset Turnover 0.76 0.76
ROE 28.24 28.24
ROCE 31.14 31.14
Cash Conversion Cycle 222 days 222 days
Q.9 Debt to Equity ratio of Southern Magnesium & Chemicals Ltd?
Southern Magnesium & Chemicals Ltd Debt-to-Equity ratio is 0.26 , which is lower with the industry average of 0.37 , indicating lower debt levels in the industry.
Q.10 Debt to cash flow from operations of Southern Magnesium & Chemicals Ltd?
Southern Magnesium & Chemicals Ltd Debt to cash flow from operations is 0.7 , which is at a healthy level.

Ownership & governance

Q.1 Promoter shareholding and pledge status of Southern Magnesium & Chemicals Ltd?
Promoters hold 50.94% of the Southern Magnesium & Chemicals Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

Q.1 Revenue growth of Southern Magnesium & Chemicals Ltd vs industry peers?
Southern Magnesium & Chemicals Ltd revenue CAGR is 50.87% , compared to the industry median CAGR of 1.76% , indicating faster growth and gaining its market share.
Profit Metrics
Current Level Industry Median
Revenue 12.4 156.7
Gross Profit 4.3 4.2
Operating Profit 3.9 4.1
Net Profit 3.2 2.2
Operating Efficiency
Current Level Industry Median
Asset Turnover 0.76 2.44
ROE 28.24 5.38
ROCE 31.14 9.07
Cash Conversion Cycle (days) 221.85 54

Valuation & price assessment

Q.1 Stock return of Southern Magnesium & Chemicals Ltd over the last decade?
Over the last 9 year(s), the stock has delivered a CAGR of 9.6% based on the current price.
Q.2 What return has the stock given over the last decade?
9Y 5Y 3Y 1Y
Share Price 9.6% 54.1% 4.2% -41.3%
Q.3 Valuation ratios of Southern Magnesium & Chemicals Ltd vs historical?
The current P/E is lower that its historical median.
Q.4 How do the current valuation ratios measure up against the historic numbers and the current industry numbers?
Valuation Ratios Current Historic Median Industry Median
Price to Earnings - 24.52 24.79
Price to Book 1.96 3.43 2.38
Price to Sales 7.8 4.20 0.58
EV to EBITDA 59.31 15.35 11.82

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