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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 Gold Ltd belong to?
Midwest Gold Ltd belongs to the Construction & Infrastructure sector, operating specifically within the Ceramics/Marble/Granite/Sanitaryware segment.
Q.2 Is Midwest Gold Ltd a good quality company?
Midwest Gold 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 Gold Ltd undervalued or overvalued?
Midwest Gold Ltd appears Overvalued, as its key valuation ratios are higher 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 - -
Price to Book 13.45 -0.52
Price to Sales 31276.84 28.97
EV to EBITDA 1752.92 -24.84
Q.4 Is Midwest Gold Ltd a good buy now?
Midwest Gold 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 Gold Ltd?
Midwest Gold 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 Gold Ltd?
Midwest Gold 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 Gold Ltd?
Midwest Gold 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 Gold Ltd?
Midwest Gold 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 Gold Ltd?
Midwest Gold 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 Gold Ltd?
Midwest Gold 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 Gold Ltd?
Midwest Gold 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 Gold Ltd?
Midwest Gold 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 Gold Ltd?
Midwest Gold 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 Gold Ltd?

Q.1 Promoter shareholding and pledge status of Midwest Gold Ltd?
Promoters hold 58.78% of the Midwest Gold Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

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

Q.1 Revenue growth of Midwest Gold Ltd vs industry peers?
Midwest Gold Ltd revenue CAGR is -4.95%, compared to the industry median CAGR of 0.00%, indicating slower growth and losing its market share.
Profit Metrics
Current Level 5-year
Industry Median
Revenue Growth (%) -57.1 0
Gross Profit Growth (%) 0 9
Operating Profit Growth (%) 0 1.1
Net Profit Growth (%) 0 15.6
Operating Efficiency
Current Level 5-year
Industry Median
Asset Turnover (x) 0.01 0.55
ROE (%) - 2.33
ROCE (%) -2.82 5.52
Cash Conversion Cycle (days) -574.28 187

Valuation & price assessment

Q.1 Stock return of Midwest Gold Ltd over the last decade?
Over the last 9 year(s), the stock has delivered a CAGR of 81.8% based on the current price.
9Y 5Y 3Y 1Y
Share Price
CAGR
81.8% 215.9% 414% 719.9%
Q.2 Valuation ratios of Midwest Gold Ltd vs historical?
The current P/E ratio of 0 is in line with than its historical median of , indicating that the stock is trading near 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 - - 24.16
Price to Book 13.45 -0.52 0.90
Price to Sales 31276.84 28.97 1.28
EV to EBITDA 1752.92 -24.84 10.79

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