Ahmedabad Steelcraft Limited

Basic Materials — Steel · BSE

₹162.60₹0.00 (0.00%)

DalalBaazaar Score

59 / 100

🟡 Moderate

Verdict

CAUTION

Risk

Very High

Driven by high debt relative to equity, negative free cash flow, micro-cap size, which brings thin liquidity.

In simple words: Strong business and financial position, but sales are shrinking. Debt is the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 8:27 pm

Understanding the Business

Company site ↗

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

What does this company do?

Ahmedabad Steelcraft Limited engages in the trading of steel and electrical items in India. The company also offers engineering, procurement and construction services.

IndustrySteel

SectorBasic Materials

Employees12

Annual revenue₹221 Cr

How does it make money?

Turns over ₹221 Cr a year. Of every ₹100 of sales, about ₹8 reaches shareholders as profit, with ₹11 left at the operating level before interest, tax and depreciation. Each of its 12 employees supports ₹18.44 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹18.44 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?Some evidence

ROCE of 18.6% is above what capital typically costs, which suggests some pricing power, though not yet the sustained, wide gap that marks a durable advantage.

Peer median ROE10.8%

What has been driving growth?

Growth has come mainly from selling more, rather than from keeping more of each sale. Over 3 years revenue moved +9976% while net margin moved -128% 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+9976%

Margin effect-128%

DalalBaazaar Score

59/ 100

Moderate

Weighted across six categories. Every point is explained below.

✓ Beta of 0.37 — historically steadier than the index
✗ Micro Cap: thinner liquidity and sharper drawdowns are normal
✗ High leverage magnifies any downturn in earnings
✗ Profits have swung sharply from year to year — earnings are hard to forecast
✗ Negative free cash flow means dependence on external funding

Quality vs. Valuation

Company Quality

60/ 100

Average

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

Valuation

72/ 100

Cheap

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

A reasonable business at a reasonable price — neither the quality nor the valuation stands out in either direction.

Historical Valuation

Current P/E

11.9x

1.3Y Median

11.0x

16 monthly readings · mean 10.8x · range 7.3x–12.8x

Sector Median

18.2x

median of 4 sector peers

🟡Currently trading close to its 1.3y median of 11.0x — the market is paying about what it usually pays for this company.

🟢Against its sector it trades 34% below the peer median of 18.2x.

vs. its own history

Fair

11.0x median over 16 months · +8%

vs. sector peers

Cheap

18.2x median of 4 peers · -34%

vs. generic bands

Cheap

Below 15x

EV/EBITDA

9.8x

PEG

—

What's Good / What's Bad

🟢 What's Going Well3

Margins are improving
EBITDA margin is up from -20.1% to 11.5% over 3 years.
Return on equity is rising
ROE has improved from -2.6% to 14.2%.
Return on capital is rising
ROCE has improved from -2.4% to 18.6%.

🔴 What Needs Attention0

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

Red Flags

3 items require attention · 2 high · 1 watch

🔴High leverageFinancial
Debt/Equity of 2.72x — earnings must service borrowings before shareholders see anything.
🔴Free cash flow negative for 4 yearsFinancial
The business has not covered its capital spending from operations for several years running, which has to be funded externally.
🟡Shareholders have been dilutedOwnership
Shares outstanding are up 269% over 3 years — each existing share owns a smaller slice of the company.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Capital compounds at a high rate
ROCE of 18.6% means each rupee reinvested earns well above what capital costs. If the company can keep deploying at this rate, growth creates value rather than just consuming cash.
Margin expansion has further to run
EBITDA margin has risen from -20.1% to 11.5%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
Cheaper than its peers
It trades 34% below the sector median. Either the market sees a problem the numbers do not show, or the discount closes.

🔴 Bear CaseWhat could go wrong?

Leverage amplifies any setback
Debt/Equity of 2.72x. Interest is payable whether or not the business has a good year.
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.
Several serious flags at once
2 high-severity checks triggered. Individually each has an explanation; together they raise the chance that something structural is wrong rather than a one-off.

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

1Revenue growth stays above 274% a year✓ 365.3% CAGR
Latest reported year was -9.3%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 9%✓ 11.5%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Free cash flow remains positive✗ -₹26 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 0.1x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 16%✓ 18.6%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

4 / 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

3 good · 4 neutral · 4 weak

Market Cap

₹245 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

11.9x

Cheap

Cheap against the generic band

P/B Ratio

1.70x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹13.65

Profitable

Profitable on a per-share basis

ROE

14.2%

Moderate

Moderate capital efficiency

ROCE

18.6%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

2.72x

High

High leverage

Revenue Growth (YoY)

-9.3%

Shrinking

Sales are contracting

Profit Growth (YoY)

-71.1%

Falling

Profits are shrinking

Dividend Yield

None

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

Free Cash Flow

-₹26 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

Operating Margin

4.9%

Weak

Thin margins leave little room for error

Net Margin

7.7%

Average

Average bottom-line conversion

Current Ratio

2.51

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.37

Defensive

Steadier than the market

52W Range Position

51%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

162.2 / 167.3

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

45.4

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹2 Cr	₹1 Cr	₹172 Cr	₹221 Cr	+365.3%
EBITDA	-₹0 Cr	-₹4 Cr	₹12 Cr	₹25 Cr	—
EBITDA Margin	-20.1%	-558.7%	7.1%	11.5%	—
PAT (Net Profit)	-₹1 Cr	-₹2 Cr	₹11 Cr	₹19 Cr	—
EPS	₹-1.61	₹-5.59	₹17.25	₹13.5	—
ROE	-2.6%	-9.9%	11.9%	14.2%	—
ROCE	-2.4%	-11.1%	13.8%	18.6%	—
Free Cash Flow	-₹2 Cr	-₹1 Cr	-₹77 Cr	-₹26 Cr	—

🟢 Revenue has grown at 365.3% a year over 3 years.

🟢 EBITDA has turned positive, from -₹0 Cr to ₹25 Cr.

🟢 EBITDA Margin has risen from -20.1% to 11.5% over 3 years (+31.6 pts).

🟢 PAT (Net Profit) has turned positive, from -₹1 Cr to ₹19 Cr.

🟢 EPS has turned positive, from ₹-1.61 to ₹13.5.

🟢 ROE has risen from -2.6% to 14.2% over 3 years (+16.8 pts).

🟢 ROCE has risen from -2.4% to 18.6% over 3 years (+21.0 pts).

Balance Sheet & Cash Flow — FY2026

Total Assets

₹220 Cr

Total Liabilities

₹88 Cr

Total Debt

₹4 Cr

Cash & Equivalents

₹0 Cr

Operating Cash Flow

-₹22 Cr

Capex

-₹4 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

86.2%

Corporate Actions

Ex-Dividend Date

14 Aug 2019

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

1 positive5 general

Ahmedabad Steelcraft Ltd. Peer Comparison – Compare with Others

Value Research, 30 Aug

Ahmedabad Steelcraft approves ₹125 crore related party deals for FY27

scanx.trade, 14 Aug

Ahmedabad Steelcraft Ltd. Shareholding Pattern – Promoters, FIIs & DIIs

Value Research, 04 Sept

AHMEDABAD STEELCRAFT LTD. Share Price

Upstox, 18 Aug

GE Vernova T&D Q1 Revenue Rises 38% to Rs 18.4 Billion

Whalesbook, 17 SeptResults

🟢Potentially positiveReported improvement. Check whether it came from volume, price or a one-off item before treating it as a trend.

65,000% in a year! How long before the penny stock bubble bursts?

The Economic Times, 25 Dec

Watch Items

Revenue growth is negative (-9.3%) on the latest reported period — check if this is one-off or a trend.
Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

StrongGrowth · Valuation

MiddlingBusiness Quality · Financial Health · Profitability

WeakRisk

Points for each in the Score ↑

Unremarkable in both directions

A reasonable business at a reasonable price. Nothing here is alarming and nothing is compelling, which usually means the decision rests on things this data cannot see — the industry's direction, management's intent, and what else is available to you. 2 high-severity red flags sit above this conclusion and should be read first.

1 of 5 tripwires tripped — Free cash flow remains positive · see Key things to watch ↑