Chaman Metallics Limited

Sector n/a · NSE

₹67.95+₹0.95 (+1.42%)

DalalBaazaar Score

40 / 100

🟡 Moderate

Verdict

CAUTION

Risk

Very High

Driven by high debt relative to equity, short-term liabilities exceed short-term assets, negative free cash flow.

In simple words: The business is earning a fairly low return on the money invested in it, though profits are falling even as sales grow. Debt is the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 8:28 pm

Understanding the Business

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

How does it make money?

Turns over ₹541 Cr a year. Of every ₹100 of sales, about ₹-1 reaches shareholders as profit, with ₹7 left at the operating level before interest, tax and depreciation.

What is its competitive advantage?Little sign of one

Returns on capital of 5.1% 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.

What has been driving growth?

Sales and margins have both contributed to where profit is now. Over 3 years revenue moved +138% while net margin moved -110% 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+138%

Margin effect-110%

DalalBaazaar Score

40/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ Return on equity is negative
✗ ROE has fallen by 26.6 points over the period

Quality vs. Valuation

Company Quality

40/ 100

Weak

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

Valuation

35/ 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.

vs. its own history

Not enough price and earnings history

vs. sector peers

Not enough peers with a usable P/E

vs. generic bands

No P/E available

EV/EBITDA

15.2x

PEG

—

What's Good / What's Bad

🟢 What's Going Well0

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

🔴 What Needs Attention2

Return on equity is falling
ROE has dropped from 22.2% to -4.4% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 25.9% to 5.1% — often a sign of competition or overexpansion.

Red Flags

9 items require attention · 7 high · 2 watch

🔴Debt has risen sharplyFinancial
Total debt is up 1940% over 3 years, from ₹22 Cr to ₹440 Cr.
🔴High leverageFinancial
Debt/Equity of 4.62x — earnings must service borrowings before shareholders see anything.
🔴Thin interest coverageFinancial
Operating profit covers interest only 0.8x — little room if earnings dip.
🔴Free cash flow negative for 3 yearsFinancial
The business has not covered its capital spending from operations for several years running, which has to be funded externally.
🔴The company is lossmakingFinancial
Net profit of -₹4 Cr in the latest reported year.
🔴Significant margin compressionFinancial
EBITDA margin has fallen 5.2 points, from 12.6% to 7.3%.
🔴Inventory building faster than salesFinancial
Inventory up 537% against revenue up 138% — stock may not be moving.
🟡Interest coverage is deterioratingFinancial
Cover has fallen from 11.6x to 0.8x.
🟡Short-term liquidity is tightFinancial
Current ratio of 0.96 — near-term obligations exceed near-term assets.

Investment Thesis

🟢 Bull CaseWhat could make this work?

No clear supporting case emerges from the available numbers.

🔴 Bear CaseWhat could go wrong?

Margins are being competed away
EBITDA margin has fallen from 12.6% to 7.3%. If the trend continues, profit falls even on flat sales — and margin decline rarely reverses quickly.
The debt load needs earnings to hold up
Debt is 11.1x EBITDA. At that level a downturn in earnings turns a manageable balance sheet into a refinancing problem, and lenders get paid before shareholders.
Returns on shareholder capital are falling
ROE has dropped from 22.2% to -4.4%. Each rupee of equity earns less than it did, so profit growth increasingly depends on raising more capital rather than on the existing base working harder.
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

1Revenue growth stays above 25% a year✓ 33.5% CAGR
Latest reported year was 215.0%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 5%✓ 7.3%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Debt / EBITDA falls below 3x✗ 11.1x
Already stretched, so this is a reduction target rather than a level to hold. Around 3x is where lenders typically start attaching conditions.
4Free cash flow remains positive✗ -₹52 Cr
Profit that never becomes cash eventually stops being profit.
5Interest cover stays above 3x✗ 0.8x
How much operating profit can fall before interest stops being comfortably covered.

Investment Checklist

2 / 9 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
✓ Short-term technical trend isn't bearish

Price history

Quick Metrics

1 good · 5 neutral · 5 weak

Market Cap

₹164 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

Not available

No data

Source didn't return this field

P/B Ratio

Not available

No data

Source didn't return this field

EPS (TTM)

Not available

No data

Source didn't return this field

ROE

-4.4%

Weak

Weak capital efficiency

ROCE

5.1%

Weak

Low return on total capital employed

Debt/Equity

4.62x

High

High leverage

Revenue Growth (YoY)

215.0%

Healthy

Healthy top-line growth

Profit Growth (YoY)

-142.7%

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

-₹52 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

Gross Margin

13.2%

Proxy

Operating margin unavailable — showing gross margin instead

Net Margin

-0.8%

Weak

Very little revenue reaches the bottom line

Current Ratio

0.96

Adequate

Adequate, but no real cushion

Technical Snapshot

SMA 20 / SMA 50

115.7 / 113.5

Bullish alignment (short > long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

47.1

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹228 Cr	₹189 Cr	₹172 Cr	₹541 Cr	+33.5%
EBITDA	₹29 Cr	₹20 Cr	₹17 Cr	₹40 Cr	+11.5%
EBITDA Margin	12.6%	10.8%	9.7%	7.3%	—
PAT (Net Profit)	₹17 Cr	₹13 Cr	₹10 Cr	-₹4 Cr	—
EPS	₹8.93	₹5.19	₹4.05	—	—
ROE	22.2%	14.0%	9.8%	-4.4%	—
ROCE	25.9%	8.5%	3.6%	5.1%	—
Total Debt	₹22 Cr	₹130 Cr	₹358 Cr	₹440 Cr	+173.3%
Free Cash Flow	₹7 Cr	-₹132 Cr	-₹228 Cr	-₹52 Cr	—

🟢 Revenue has grown at 33.5% a year over 3 years.

🟢 EBITDA has grown at 11.5% a year over 3 years.

🔴 EBITDA Margin has fallen from 12.6% to 7.3% over 3 years (-5.2 pts).

🔴 PAT (Net Profit) has turned negative, from ₹17 Cr to -₹4 Cr.

🔴 ROE has fallen from 22.2% to -4.4% over 3 years (-26.6 pts).

🔴 ROCE has fallen from 25.9% to 5.1% over 3 years (-20.8 pts).

🔴 Total Debt has grown at 173.3% a year over 3 years.

🔴 Free Cash Flow has turned negative, from ₹7 Cr to -₹52 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹644 Cr

Total Liabilities

₹549 Cr

Cash & Equivalents

₹0 Cr

Operating Cash Flow

₹46 Cr

Capex

-₹98 Cr

Recent News

2 mixed4 general

Chaman Metallics Share Price News: Rs 123 and Key Metrics

Univest, 30 Sept

Chaman Metallics Share Price News: Price Rise and Valuation

Univest, 10 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.

Chaman Metallics (NSEI:CMNL) - Stock Analysis

Simply Wall Street, 17 Jan

Chaman Metallics IPO Allotment Status 2023 – Check on Linkintime

IPO Watch, 11 Jan

5 Best Steel Penny Stocks in India

Equitymaster, 17 Feb

Chaman Metallics jumps 6.7% After commissioning 30 MW captive power plant; expects ₹52 Crore annual savings

Trade Brains, 27 AugCapacity

🟡Mixed / dependsCapacity additions can raise revenue over two to three years, but the capital spend usually pressures free cash flow first. Worth checking whether the capex is funded from operations or from borrowing.

Watch Items

Cross-check against the company's latest quarterly filing / investor presentation before acting.
Sector/industry classification unavailable — verify manually for peer comparison.
3 metrics couldn't be retrieved for this stock — this is more common for smaller or thinly-covered listings.

DalalBaazaar Thesis

StrongGrowth

MiddlingValuation

WeakBusiness Quality · Financial Health · Profitability · 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. 7 high-severity red flags sit above this conclusion and should be read first.

3 of 5 tripwires tripped — Debt / EBITDA falls below 3x; Free cash flow remains positive; Interest cover stays above 3x · see Key things to watch ↑