Ashoka Metcast Limited

Basic Materials — Steel · NSE

₹15.16−₹0.49 (−3.13%)

DalalBaazaar Score

64 / 100

🟢 Good

Verdict

REASONABLE

Risk

High

Driven by negative free cash flow, micro-cap size, which brings thin liquidity.

In simple words: Reasonable but unspectacular business quality, but sales are shrinking. Cash generation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:07 pm

Mixed / neutral. No major red flags jump out, but nothing here screams "obviously cheap" either. This is a name that needs a peer comparison and a view on near-term earnings triggers before sizing a position.

Understanding the Business

Company site ↗

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

What does this company do?

Ashoka Metcast Limited engages in the trading of steel, goods, and other products in India. It provides thermo-mechanically treated bars, round, mild steel, and angle bars, and steel channels. The company was incorporated in 2009 and is based in Ahmedabad, India.

IndustrySteel

SectorBasic Materials

Employees1

Annual revenue₹28 Cr

How does it make money?

Turns over ₹28 Cr a year. Of every ₹100 of sales, about ₹39 reaches shareholders as profit, with ₹56 left at the operating level before interest, tax and depreciation. Each of its 1 employees supports ₹27.70 Cr of revenue a year, the signature of a capital- or asset-led business.

EBITDA margin55.5%

Net margin39.0%

Revenue / employee₹27.70 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.

TATA STEEL LIMITEDP/E 19.8x · ROE 10.8%

JSW STEEL LIMITEDP/E 12.0x · ROE 24.7%

JINDAL STEEL LIMITEDP/E 39.1x · ROE 5.3%

STEEL AUTHORITY OF INDIAP/E 16.5x · ROE 7.1%

What is its competitive advantage?Little sign of one

Returns on capital of 8.6% 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.

ROCE8.6%

ROE8.9%

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 -45% while net margin moved +511% 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-45%

Margin effect+511%

DalalBaazaar Score

64/ 100

Good

Weighted across six categories. Every point is explained below.

• Beta of 0.99 — moves roughly with the market
✗ Micro Cap: thinner liquidity and sharper drawdowns are normal
✗ Negative free cash flow means dependence on external funding

Quality vs. Valuation

Company Quality

62/ 100

Average

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

Valuation

88/ 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

2.2x

3Y Median

9.1x

40 monthly readings · mean 10.1x · range 2.3x–26.7x

Sector Median

18.2x

median of 4 sector peers

🟢Current valuation is approximately 76% below its 3y median of 9.1x. Cheaper than its own history, which is worth a reason too: the market may be pricing in something the backward-looking numbers do not show.

🟢Against its sector it trades 88% below the peer median of 18.2x.

vs. its own history

Cheap

9.1x median over 40 months · -76%

vs. sector peers

Cheap

18.2x median of 4 peers · -88%

vs. generic bands

Cheap

Below 15x

P/E (Trailing)

2.2x

P/B

0.22x

EV/EBITDA

6.1x

PEG

0.04

Dividend Yield

None

What's Good / What's Bad

🟢 What's Going Well5

Margins are improving
EBITDA margin is up from 10.3% to 55.5% over 3 years.
Return on equity is rising
ROE has improved from 3.2% to 8.9%.
Return on capital is rising
ROCE has improved from 4.3% to 8.6%.
Valuation below its historical average
At 2.2x the stock trades 76% below its own median of 9.1x.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention3

Debt is rising
Total debt is up 269% over 3 years — worth checking what it funded.
Free cash flow is negative
The business is not currently covering its capital spending from operations.
Inventory building faster than sales
Inventory is up 60% against revenue growth of -45% — stock may not be moving.

Red Flags

4 items require attention · 3 high · 1 watch

🔴Debt has risen sharplyFinancial
Total debt is up 269% over 3 years, from ₹16 Cr to ₹58 Cr.
🔴Profit up while operating cash flow fallsFinancial
Reported profit rose but cash generated by operations declined — worth checking whether earnings are being supported by non-cash items or working capital.
🔴Inventory building faster than salesFinancial
Inventory up 60% against revenue up -45% — stock may not be moving.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹22 Cr in the latest year.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Margin expansion has further to run
EBITDA margin has risen from 10.3% to 55.5%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
Priced below its own history
The stock trades 76% below its own median multiple. If the business performs as it has and simply re-rates back to normal, that gap is return on its own.
Cheaper than its peers
It trades 88% below the sector median. Either the market sees a problem the numbers do not show, or the discount closes.
Earnings have proved durable
Profitable in every one of the last 4 reported years. Consistency lowers the risk that any single bad year is structural rather than cyclical.

🔴 Bear CaseWhat could go wrong?

The debt load needs earnings to hold up
Debt is 3.8x EBITDA. At that level a downturn in earnings turns a manageable balance sheet into a refinancing problem, and lenders get paid before shareholders.
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
3 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

1EBITDA margin holds above 54%✓ 55.5%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Debt / EBITDA falls below 3x✗ 3.8x
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✗ -₹22 Cr
Profit that never becomes cash eventually stops being profit.
4ROCE stays above 8%✓ 8.6%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.
5Valuation vs its own median of 9.1x✓ 2.2x today
A re-rating above its own history needs a reason; without one it is just a higher price.

Investment Checklist

7 / 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

₹38 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

2.2x

Cheap

Cheap against the generic band

P/B Ratio

0.22x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹6.89

Profitable

Profitable on a per-share basis

ROE

8.9%

Moderate

Moderate capital efficiency

ROCE

8.6%

Moderate

Moderate return on the capital in the business

Debt/Equity

0.43x

Low

Conservative leverage

Revenue Growth (YoY)

-25.4%

Shrinking

Sales are contracting

Profit Growth (YoY)

186.7%

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

-₹22 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

CMP

₹15.16

Operating Margin

-22.4%

Weak

Thin margins leave little room for error

Net Margin

49.0%

Good

Strong bottom-line conversion

Current Ratio

4.23

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.99

Market-like

Moves roughly in line with the market

52W Range Position

42%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

15.0 / 14.4

Bullish alignment (short > long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

46.4

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹50 Cr	₹66 Cr	₹39 Cr	₹28 Cr	-18.1%
EBITDA	₹5 Cr	₹7 Cr	₹6 Cr	₹15 Cr	+43.7%
EBITDA Margin	10.3%	11.1%	14.5%	55.5%	—
PAT (Net Profit)	₹3 Cr	₹5 Cr	₹5 Cr	₹11 Cr	+49.7%
EPS	₹1.29	₹1.92	₹2.94	₹6.05	+67.4%
ROE	3.2%	4.6%	4.9%	8.9%	—
ROCE	4.3%	6.9%	6.0%	8.6%	—
Total Debt	₹16 Cr	₹17 Cr	₹16 Cr	₹58 Cr	+54.5%
Free Cash Flow	-₹47 Cr	₹7 Cr	-₹8 Cr	-₹22 Cr	—

🔴 Revenue has shrunk at 18.1% a year over 3 years.

🟢 EBITDA has grown at 43.7% a year over 3 years.

🟢 EBITDA Margin has risen from 10.3% to 55.5% over 3 years (+45.3 pts).

🟢 PAT (Net Profit) has grown at 49.7% a year over 3 years.

🟢 EPS has grown at 67.4% a year over 3 years.

🟢 ROE has risen from 3.2% to 8.9% over 3 years (+5.7 pts).

🟢 ROCE has risen from 4.3% to 8.6% over 3 years (+4.4 pts).

🔴 Total Debt has grown at 54.5% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹208 Cr

Total Liabilities

₹75 Cr

Total Debt

₹58 Cr

Cash & Equivalents

₹2 Cr

Operating Cash Flow

-₹17 Cr

Capex

-₹4 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

53.6%

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

3 mixed3 general

Ashoka Metcast Share Price Target 2027 to 2030: Analyst Outlook

Univest, 17 AugAnalyst view

🟡Mixed / dependsBroker commentary — an opinion about the price rather than new information about the business.

Here's Why We Think Ashoka Metcast (NSE:ASHOKAMET) Might Deserve Your Attention Today

Simply Wall Street, 13 Sept

Compare with

Equitymaster, 29 Sept

Ashoka Metcast Publishes FY26 Audited Financial Results Ad Under Regulation 47

scanx.trade, 02 MayResults

🟡Mixed / dependsA results event. The figures on this page update once the new statements reach the data feed, which usually lags the announcement.

Ashoka Metcast: 7 Stock Signals to Watch

Univest, 21 Sept

Ashoka Metcast's (NSE:ASHOKAMET) Solid Earnings May Rest On Weak Foundations

Simply Wall Street, 12 MayResults

🟡Mixed / dependsA results event. The figures on this page update once the new statements reach the data feed, which usually lags the announcement.

Watch Items

Revenue growth is negative (-25.4%) 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

🟢Business QualityStrong14.3/20

🟢Financial HealthStrong13/20

🟡GrowthModest9.5/20

🟢ProfitabilityStrong10/15

🟢ValuationAttractive13.2/15

🔴RiskHigh3.7/10

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. 3 high-severity red flags sit above this conclusion and should be read first.

This thesis breaks if

✓EBITDA margin holds above 54%55.5%
✗Debt / EBITDA falls below 3x3.8x
✗Free cash flow remains positive-₹22 Cr
✓ROCE stays above 8%8.6%
✓Valuation vs its own median of 9.1x2.2x today