Behari Lal Engineering Limited

Basic Materials — Steel · NSE

₹501.50+₹6.55 (+1.32%)

DalalBaazaar Score

62 / 100

🟢 Good

Verdict

REASONABLE

Risk

High

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

In simple words: Strong business and financial position, with both sales and profits growing well. Debt is the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:45 pm

Understanding the Business

Company site ↗

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

What does this company do?

Behari Lal Engineering Limited engages in the manufacturing and trading of iron and steel products in India.

IndustrySteel

SectorBasic Materials

Annual revenue₹517 Cr

How does it make money?

Turns over ₹517 Cr a year. Of every ₹100 of sales, about ₹13 reaches shareholders as profit, with ₹20 left at the operating level before interest, tax and depreciation.

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 28.5%. Returns that high normally get competed away; when they persist, something is protecting them, and its ROE of 21.1% 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 +13% while net margin moved +98% 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+13%

Margin effect+98%

DalalBaazaar Score

62/ 100

Good

Weighted across six categories. Every point is explained below.

✗ Micro Cap: thinner liquidity and sharper drawdowns are normal
✗ High leverage magnifies any downturn in earnings

Quality vs. Valuation

Company Quality

74/ 100

Good

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

Valuation

42/ 100

Expensive

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

A good business, but the price already reflects that. The quality is real; the question is whether you are overpaying for it today.

Historical Valuation

Current P/E

31.0x

Sector Median

18.2x

median of 4 sector peers

⚠️Against its sector it trades 71% above the peer median of 18.2x.

vs. its own history

Not enough price and earnings history

vs. sector peers

Expensive

18.2x median of 4 peers · +71%

vs. generic bands

Fair

15x–35x

EV/EBITDA

21.1x

PEG

1.00

What's Good / What's Bad

🟢 What's Going Well5

Margins are improving
EBITDA margin is up from 10.7% to 19.7% over 3 years.
Debt is being paid down
Total debt is down 69% over 3 years.
Cash flow has turned positive
Free cash flow moved from negative to positive over 3 years.
High return on capital employed
ROCE of 28.5% is the mark of a business that converts capital into profit efficiently.
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

🔴High leverageFinancial
Debt/Equity of 5.81x — earnings must service borrowings before shareholders see anything.
🔴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 74% against revenue up 13% — stock may not be moving.
🟡Receivables growing faster than salesFinancial
Receivables up 46% against revenue up 13% — sales are being booked faster than they are collected.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Capital compounds at a high rate
ROCE of 28.5% 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 10.7% to 19.7%. 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 69% over 3 years. Every rupee of interest not paid drops to the bottom line, so profit can grow even if revenue does not.
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?

Leverage amplifies any setback
Debt/Equity of 5.81x. Interest is payable whether or not the business has a good year.
Sales are being booked faster than collected
Receivables are up 46% against revenue up 13%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
A premium to the sector to defend
It trades 71% above the peer median. That premium needs a reason that persists, or it closes.
Growth barely outpaces inflation
Revenue compounding at 4.3% a year is close to the rate prices rise, so the business is gaining little ground in real terms. That leaves the share price dependent on a re-rating rather than on earnings growth.
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 18%✓ 19.7%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Revenue growth stays above 4% a year✓ 4.3% CAGR
Latest reported year was 18.0%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
3Free cash flow remains positive✓ ₹1 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 0.2x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 25%✓ 28.5%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

9 / 10 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

Price history

Quick Metrics

6 good · 3 neutral · 2 weak

Market Cap

₹2,121 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

31.0x

Fair

Fairly valued against the generic band

P/B Ratio

6.40x

Rich

Steep premium to book — needs high, durable returns to justify

EPS (TTM)

₹16.17

Profitable

Profitable on a per-share basis

ROE

21.1%

Strong

Strong capital efficiency

ROCE

28.5%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

5.81x

High

High leverage

Revenue Growth (YoY)

18.0%

Healthy

Healthy top-line growth

Profit Growth (YoY)

24.6%

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

₹1 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

Operating Margin

15.8%

Good

Healthy core-business profitability

Net Margin

12.3%

Good

Strong bottom-line conversion

Current Ratio

4.28

Comfortable

Healthy short-term liquidity

52W Range Position

65%

Mid-range

Technical Snapshot

RSI (14)

60.5

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹455 Cr	₹430 Cr	₹493 Cr	₹517 Cr	+4.3%
EBITDA	₹49 Cr	₹61 Cr	₹81 Cr	₹102 Cr	+27.6%
EBITDA Margin	10.7%	14.1%	16.5%	19.7%	—
PAT (Net Profit)	₹29 Cr	₹36 Cr	₹53 Cr	₹65 Cr	+30.9%
EPS	₹6.81	₹8.46	₹12.52	—	—
ROE	24.1%	18.5%	21.9%	21.1%	—
ROCE	27.4%	25.5%	29.1%	28.5%	—
Total Debt	₹58 Cr	₹36 Cr	₹8 Cr	₹18 Cr	-32.6%
Free Cash Flow	-₹8 Cr	₹22 Cr	₹32 Cr	₹1 Cr	—

🟢 Revenue has grown at 4.3% a year over 3 years.

🟢 EBITDA has grown at 27.6% a year over 3 years.

🟢 EBITDA Margin has risen from 10.7% to 19.7% over 3 years (+8.9 pts).

🟢 PAT (Net Profit) has grown at 30.9% a year over 3 years.

🔴 ROE has fallen from 24.1% to 21.1% over 3 years (-3.0 pts).

🟢 ROCE has risen from 27.4% to 28.5% over 3 years (+1.1 pts).

🟢 Total Debt has shrunk at 32.6% a year over 3 years.

🟢 Free Cash Flow has turned positive, from -₹8 Cr to ₹1 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹368 Cr

Total Liabilities

₹62 Cr

Cash & Equivalents

₹1 Cr

Operating Cash Flow

₹28 Cr

Capex

-₹27 Cr

Shareholding (proxy)

Institutional Holding

3.0%

Insider Holding

73.6%

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

1 mixed5 general

Behari Lal Engineering Ltd. Share Price Live Today

CNBC TV18, 16 Oct

BEHARI LAL ENGINEERING L Share Price - Live NSE: BLEL Stock Price & Chart

Upstox, 16 Oct

Behari Lal Engineering Ltd. IPO

The Economic Times, 13 Oct

BLEL Share price NSE | Behari Lal Engineering Limited Stock price BSE Today

Samco, 13 Oct

Compare GOOD LUCK STEEL with

Equitymaster, 16 Oct

Behari Lal Engineering shares rally 14% after stellar debut. What are brokerages saying?

The Economic Times, 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

Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

StrongBusiness Quality · Financial Health · Growth · Profitability

WeakValuation · Risk

Points for each in the Score ↑

Good business, demanding price

The quality is real and the price already reflects it. Buying here is a bet that the business keeps compounding for long enough to grow into the multiple — which good businesses often do, but it removes the margin for error that a lower price would have given you. 3 high-severity red flags sit above this conclusion and should be read first.

All 5 tripwires holding · see Key things to watch ↑