Aanchal Ispat Limited

Basic Materials — Steel · BSE

₹56.49+₹2.64 (+4.90%)

DalalBaazaar Score

47 / 100

🟡 Moderate

Verdict

NEUTRAL

Risk

High

Driven by short-term liabilities exceed short-term assets, negative free cash flow, micro-cap size, which brings thin liquidity.

In simple words: The business is earning a fairly low return on the money invested in it, with modest growth. Cash generation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:49 pm

Understanding the Business

Company site ↗

The 60-second version of Aanchal Ispat Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Aanchal Ispat Limited engages in the manufacture and sale of mild steel TMT re-bars, structural re-bars, angles, channels, TMT bars, MS rounds, and other sectional products in India.

IndustrySteel

SectorBasic Materials

Employees66

Annual revenue₹99 Cr

How does it make money?

Turns over ₹99 Cr a year. Of every ₹100 of sales, about ₹2 reaches shareholders as profit, with ₹1 left at the operating level before interest, tax and depreciation. Each of its 66 employees supports ₹1.50 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹1.50 Cr

Who are its competitors?

The closest listed comparisons in its industry are TATA STEEL LIMITED, JSW STEEL LIMITED, JINDAL STEEL LIMITED, STEEL AUTHORITY OF INDIA. These are the companies its valuation and returns are measured against elsewhere in this report.

Compared side by side in Peers ↓

What is its competitive advantage?Little sign of one

Returns on capital of 7.9% are at or below what the capital likely costs. That is the financial pattern of a business competing largely on price, where advantage has to come from execution rather than position.

Peer median ROE10.8%

What has been driving growth?

Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved -49% while net margin moved -117% relative to itself. What this cannot tell you is which products, customers or geographies did the work — that lives in the segment disclosures of the annual report.

Revenue effect-49%

Margin effect-117%

DalalBaazaar Score

47/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ Revenue has contracted at 20.2% a year

Quality vs. Valuation

Company Quality

44/ 100

Weak

How good the business is, ignoring the share price entirely.

Valuation

66/ 100

Fair

What you are being asked to pay, ignoring how good the business is.

Weak on business quality and not cheap enough to compensate.

Historical Valuation

Current P/E

6.8x

Sector Median

18.2x

median of 4 sector peers

🟢Against its sector it trades 62% below the peer median of 18.2x.

vs. its own history

Not enough price and earnings history

vs. sector peers

Cheap

18.2x median of 4 peers · -62%

vs. generic bands

Cheap

Below 15x

EV/EBITDA

58.9x

PEG

—

What's Good / What's Bad

🟢 What's Going Well5

Margins are improving
EBITDA margin is up from -0.9% to 1.2% over 3 years.
Debt is being paid down
Total debt is down 40% over 3 years.
Return on equity is rising
ROE has improved from -101.1% to 24.7%.
Return on capital is rising
ROCE has improved from -28.9% to 7.9%.
Very low debt
Debt/Equity of 0.21x leaves the balance sheet with plenty of headroom.

🔴 What Needs Attention0

Nothing stands out as clearly deteriorating on the years of data available.

Red Flags

3 items require attention · 3 watch

🟡Free cash flow is negativeFinancial
Free cash flow was -₹2 Cr in the latest year.
🟡Shareholders have been dilutedOwnership
Shares outstanding are up 1259% over 3 years — each existing share owns a smaller slice of the company.
🟡Short-term liquidity is tightFinancial
Current ratio of 0.92 — near-term obligations exceed near-term assets.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Margin expansion has further to run
EBITDA margin has risen from -0.9% to 1.2%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
Deleveraging frees up earnings
Debt is down 40% over 3 years. Every rupee of interest not paid drops to the bottom line, so profit can grow even if revenue does not.
Cheaper than its peers
It trades 62% below the sector median. Either the market sees a problem the numbers do not show, or the discount closes.

🔴 Bear CaseWhat could go wrong?

The debt load needs earnings to hold up
Debt is 40.8x EBITDA. At that level a downturn in earnings turns a manageable balance sheet into a refinancing problem, and lenders get paid before shareholders.
Earnings are hard to forecast
Profit has swung sharply from year to year, so any single year — good or bad — is a weak guide to the next. Cyclical earnings deserve lower multiples for that reason.
Size brings its own risk
Micro Cap businesses are thinly traded, so exits are harder in a falling market and single events move the price more than they would for a larger company.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1EBITDA margin holds above -1%✓ 1.2%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Debt / EBITDA falls below 3x✗ 40.8x
Already stretched, so this is a reduction target rather than a level to hold. Around 3x is where lenders typically start attaching conditions.
3Free cash flow remains positive✗ -₹2 Cr
Profit that never becomes cash eventually stops being profit.
4ROCE stays above 8%✗ 7.9%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

6 / 11 checks passed

✓ Strong return on equity (ROE ≥ 15%)
✗ Strong return on capital employed (ROCE ≥ 15%)
✗ Healthy net margin (≥ 10%)
✗ Generates positive free cash flow
✓ Manageable leverage (Debt/Equity < 1.0)
✗ Adequate short-term liquidity (Current Ratio ≥ 1.0)
✓ Revenue growing year-over-year
✓ Profit growing year-over-year
✓ Not trading at an extreme valuation (P/E < 40x)
✓ Not buying right at the 52-week high
✗ Short-term technical trend isn't bearish

Price history

Quick Metrics

5 good · 4 neutral · 2 weak

Market Cap

₹24 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

6.8x

Cheap

Cheap against the generic band

P/B Ratio

1.95x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹8.28

Profitable

Profitable on a per-share basis

ROE

24.7%

Strong

Strong capital efficiency

ROCE

7.9%

Weak

Low return on total capital employed

Debt/Equity

0.21x

Low

Conservative leverage

Revenue Growth (YoY)

9.2%

Modest

Modest growth

Profit Growth (YoY)

760.0%

Healthy

Profits growing at a healthy clip

Dividend Yield

None

No dividend yield reported — usually means no payout, but verify if one was recently initiated

Free Cash Flow

-₹2 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

Operating Margin

-0.2%

Weak

Thin margins leave little room for error

Net Margin

2.5%

Weak

Very little revenue reaches the bottom line

Current Ratio

0.92

Adequate

Adequate, but no real cushion

Beta (vs Nifty)

1.03

Market-like

Moves roughly in line with the market

52W Range Position

10%

Near low

Near its 52-week low

Technical Snapshot

SMA 20 / SMA 50

59.9 / 65.0

Bearish alignment (short < long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

35.3

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹194 Cr	₹109 Cr	₹151 Cr	₹99 Cr	-20.2%
EBITDA	-₹2 Cr	-₹3 Cr	-₹5 Cr	₹1 Cr	—
EBITDA Margin	-0.9%	-2.9%	-3.1%	1.2%	—
PAT (Net Profit)	-₹23 Cr	-₹6 Cr	-₹13 Cr	₹2 Cr	—
EPS	₹-1,125	₹-300	₹-6.43	₹7.13	—
ROE	-101.1%	-37.1%	-388.3%	24.7%	—
ROCE	-28.9%	-23.7%	-48.7%	7.9%	—
Total Debt	₹81 Cr	₹84 Cr	₹47 Cr	₹49 Cr	-15.4%
Free Cash Flow	₹2 Cr	₹6 Cr	-₹3 Cr	-₹2 Cr	—

🔴 Revenue has shrunk at 20.2% a year over 3 years.

🟢 EBITDA has turned positive, from -₹2 Cr to ₹1 Cr.

🟢 EBITDA Margin has risen from -0.9% to 1.2% over 3 years (+2.2 pts).

🟢 PAT (Net Profit) has turned positive, from -₹23 Cr to ₹2 Cr.

🟢 EPS has turned positive, from ₹-1,125 to ₹7.13.

🟢 ROE has risen from -101.1% to 24.7% over 3 years (+125.7 pts).

🟢 ROCE has risen from -28.9% to 7.9% over 3 years (+36.8 pts).

🟢 Total Debt has shrunk at 15.4% a year over 3 years.

🔴 Free Cash Flow has turned negative, from ₹2 Cr to -₹2 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹69 Cr

Total Liabilities

₹61 Cr

Cash & Equivalents

₹2 Cr

Operating Cash Flow

-₹2 Cr

Capex

-₹0 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

85.6%

Peer Comparison

Company	P/E	ROE
TATA STEEL LIMITED	19.8x	10.8%
JSW STEEL LIMITED	12.0x	24.7%
JINDAL STEEL LIMITED	39.1x	5.3%
STEEL AUTHORITY OF INDIA	16.5x	7.1%

Recent News

6 general

Aanchal Ispat appoints Aparna Sharma as Company Secretary and Compliance Officer

scanx.trade, 14 Oct

Compare with

Equitymaster, 15 Oct

Aanchal Ispat Ltd. Key Financial Ratios – Valuation, Profitability & More

Value Research, 31 Aug

Aanchal Ispat OFS February 2026 Date, Floor Price, Discount, OFS Size Details

IPO Watch, 03 Feb

Aanchal Ispat publishes EGM notice for warrant allotment

scanx.trade, 23 Jun

Compare LLOYDS STEEL IND. with

Equitymaster, 09 Oct

Watch Items

Trading very close to its 52-week low — worth checking whether this reflects a temporary setback or a structural problem.
Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

StrongProfitability · Valuation

MiddlingFinancial Health

WeakBusiness Quality · Growth · Risk

Points for each in the Score ↑

Weak on the fundamentals

Poor scores on business quality without a price low enough to compensate. There is no obvious argument for owning this over a stronger company at a similar valuation.

3 of 4 tripwires tripped — Debt / EBITDA falls below 3x; Free cash flow remains positive; ROCE stays above 8% · see Key things to watch ↑