Bihar Sponge Iron Limited

Basic Materials — Steel · BSE

₹12.25+₹0.35 (+2.94%)

DalalBaazaar Score

18 / 100

🔴 Poor

Verdict

HIGH RISK

Risk

Very High

Driven by negative shareholders' equity — the company owes more than it owns, negative free cash flow, micro-cap size, which brings thin liquidity.

In simple words: The company owes more than it owns — years of losses have wiped out its net worth, but sales are shrinking. Solvency — whether it can keep funding itself at all — is the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 8:29 pm

Understanding the Business

Company site ↗

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

What does this company do?

Bihar Sponge Iron Limited manufactures, produces, purchases, sells, and exports sponge iron in India. The company was incorporated in 1982 and is based in Chandil, India.

IndustrySteel

SectorBasic Materials

Employees21

Annual revenue₹245 Cr

How does it make money?

Turns over ₹245 Cr a year. Of every ₹100 of sales, about ₹5 reaches shareholders as profit, with ₹10 left at the operating level before interest, tax and depreciation. Each of its 21 employees supports ₹11.69 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹11.69 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?The numbers suggest a real one

ROCE has stayed above 15% in every year available and stands at 22.1%. Returns that high normally get competed away; when they persist, something is protecting them, and its ROE of undefined% against a peer median of 10.8% is consistent with that. What that something is — brand, scale, switching costs, regulation — the accounts cannot tell you.

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 -47% while net margin moved +76% 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-47%

Margin effect+76%

DalalBaazaar Score

18/ 100

Poor

Weighted across six categories. Every point is explained below.

✗ Shareholders' equity is negative — accumulated losses exceed the capital in the business

Quality vs. Valuation

Company Quality

17/ 100

Weak

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

Valuation

30/ 100

Expensive

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

9.4x

3Y Median

11.1x

40 monthly readings · mean 13.0x · range 6.5x–28.6x

Sector Median

18.2x

median of 4 sector peers

🟢Current valuation is approximately 15% below its 3y median of 11.1x. 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 48% below the peer median of 18.2x.

vs. its own history

Fair

11.1x median over 40 months · -15%

vs. sector peers

Cheap

18.2x median of 4 peers · -48%

vs. generic bands

N/A

Multiples unreliable — equity base is negative

EV/EBITDA

9.4x

PEG

0.43

What's Good / What's Bad

🟢 What's Going Well3

Margins are improving
EBITDA margin is up from 5.5% to 9.6% over 3 years.
Debt is being paid down
Total debt is down 18% over 3 years.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention0

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

Red Flags

4 items require attention · 3 high · 1 watch

🔴Negative shareholders' equityFinancial
Liabilities exceed assets — accumulated losses have wiped out the company's net worth.
🔴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.
🔴Receivables growing faster than salesFinancial
Receivables up 2098000% against revenue up -47% — sales are being booked faster than they are collected.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹3 Cr in the latest year.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Margin expansion has further to run
EBITDA margin has risen from 5.5% to 9.6%. 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 18% 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 48% below the sector median. Either the market sees a problem the numbers do not show, or the discount closes.

🔴 Bear CaseWhat could go wrong?

Solvency comes before everything else
Liabilities exceed assets. Until net worth is rebuilt, the equity is a claim on a business that owes more than it owns, and further losses or a funding squeeze can leave shareholders with nothing.
The debt load needs earnings to hold up
Debt is 4.8x EBITDA. At that level a downturn in earnings turns a manageable balance sheet into a refinancing problem, and lenders get paid before shareholders.
Sales are being booked faster than collected
Receivables are up 2098000% against revenue up -47%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
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 8%✓ 9.6%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Debt / EBITDA falls below 3x✗ 4.8x
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✗ -₹3 Cr
Profit that never becomes cash eventually stops being profit.
4Valuation vs its own median of 11.1x✓ 9.4x today
A re-rating above its own history needs a reason; without one it is just a higher price.

Investment Checklist

5 / 10 checks passed

✗ Shareholders' equity is positive (assets exceed liabilities)
✓ Strong return on capital employed (ROCE ≥ 15%)
✗ Healthy net margin (≥ 10%)
✗ Generates positive free cash flow
✓ 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

₹111 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

9.4x

Cheap

Cheap against the generic band

P/B Ratio

Not available

No data

Source didn't return this field

EPS (TTM)

₹1.3

Profitable

Profitable on a per-share basis

ROE

Not meaningful

Negative equity

Return on equity can't be read when equity itself is negative

ROCE

22.1%

Distorted

Distorted by the negative net worth — read this alongside the solvency flag, not on its own

Debt/Equity

Not meaningful

Negative equity

Shareholders' equity is negative, so this ratio can't be read

Revenue Growth (YoY)

-91.8%

Shrinking

Sales are contracting

Profit Growth (YoY)

21.7%

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

-₹3 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

Operating Margin

-61.2%

Weak

Thin margins leave little room for error

Net Margin

7.0%

Average

Average bottom-line conversion

Current Ratio

1.13

Adequate

Adequate, but no real cushion

Beta (vs Nifty)

0.44

Defensive

Steadier than the market

52W Range Position

41%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

12.2 / 12.3

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

54.4

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹463 Cr	₹267 Cr	₹319 Cr	₹245 Cr	-19.1%
EBITDA	₹26 Cr	₹21 Cr	₹21 Cr	₹24 Cr	-2.9%
EBITDA Margin	5.5%	8.0%	6.5%	9.6%	—
PAT (Net Profit)	₹12 Cr	₹7 Cr	₹10 Cr	₹11 Cr	-2.3%
EPS	₹1.35	₹0.83	₹1.15	₹1.26	-2.3%
ROCE	36.0%	18.8%	22.1%	22.1%	—
Total Debt	₹136 Cr	₹119 Cr	₹110 Cr	₹112 Cr	-6.3%
Free Cash Flow	-₹17 Cr	₹17 Cr	₹6 Cr	-₹3 Cr	—

🔴 Revenue has shrunk at 19.1% a year over 3 years.

🔴 EBITDA has shrunk at 2.9% a year over 3 years.

🟢 EBITDA Margin has risen from 5.5% to 9.6% over 3 years (+4.0 pts).

🔴 PAT (Net Profit) has shrunk at 2.3% a year over 3 years.

🔴 EPS has shrunk at 2.3% a year over 3 years.

🔴 ROCE has fallen from 36.0% to 22.1% over 3 years (-13.8 pts).

🟢 Total Debt has shrunk at 6.3% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹92 Cr

Total Liabilities

₹126 Cr

Cash & Equivalents

₹1 Cr

Operating Cash Flow

-₹3 Cr

Capex

-₹0 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

69.2%

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 positive2 mixed3 general

Bihar Sponge Iron sets Sept 28 AGM; book closure from Sept 22

scanx.trade, 28 Sept

Bihar Sponge Iron Issues Correction Notice for Facility User Agreement Disclosure

scanx.trade, 26 Mar

Century Extrusions standalone net profit rises 59.75% in the June 2026 quarter

Business Standard, 14 AugResults

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

Agarwal Coal Corporation files NCLT petition against Bihar Sponge Iron

scanx.trade, 16 Jul

Q3 Results Today: Britannia, Eicher Motors, Grasim, Titan Among Over 300 Companies To Declare Earnings On Feb. 10

NDTV Profit, 10 FebResults

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

SAL Steel Share Price Rises 8.17%: Technicals, Valuation

Univest, 19 AugPrice move

🟡Mixed / dependsA price move, which is not by itself a change in the business. Worth finding the cause before reading it as either good or bad.

Watch Items

Revenue growth is negative (-91.8%) 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.
1 metric couldn't be retrieved for this stock — this is more common for smaller or thinly-covered listings.

DalalBaazaar Thesis

WeakBusiness Quality · Financial Health · Growth · Profitability · Valuation · Risk

Points for each in the Score ↑

Avoid until solvency is resolved

Bihar Sponge Iron Limited owes more than it owns. Whatever the operating numbers show, the equity is a residual claim on a business with negative net worth, and that question has to be settled before any of the rest is worth weighing. 3 high-severity red flags sit above this conclusion and should be read first.

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