Rancheras (lit. "from the ranch") are songs from the countryside highly popular before Mexico became a mostly urban country. They are often played by a mariachi band and follow a waltz-ish rhythm. The expression no canta mal las rancheras means "(s)he is not bad at singing ranch-style music". This colorful expression is used to convey that, against what some could expect, a person has an above-par performance or has above average attributes.
Gualberto: Eres un culero. Pusiste a tus empleados a parir chayotes, haciéndolos chambear en días feriados.
Benito: Pues tú no cantas mal las rancheras, maestro. Tus empleados se quejan de que te vale verga cuando te piden días de incapacidad.
Gualberto: You're a son of a bitch. You gave your employees a hard time, making them work on holidays.
Benito: You don't treat your employees any better. They complain that you don't give two shits, and deny them sick days whenever they ask.
Here is a great example of a ranchera, interpreted by Juan Gabriel, who's sometimes referred to as the Mexican Prince, after the Minneapolitan artitst. It should be clear that Juan Gabriel no canta mal las rancheras.