Earthstahl & Alloys Limited

Industrials — Metal Fabrication · BSE

₹13.99+₹1.88 (+15.52%)

DalalBaazaar Score

35 / 100

🔴 Weak

Verdict

CAUTION

Risk

Very High

Driven by short-term liabilities exceed short-term assets, the company is currently loss-making, micro-cap size, which brings thin liquidity.

In simple words: The company is currently losing money, but sales are shrinking. Short-term liquidity is the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:55 pm

Understanding the Business

Company site ↗

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

What does this company do?

Earthstahl & Alloys Limited produces and sells cast iron lumps, ductile iron, cast iron, steels, alloys, and non-ferrous castings in India. The company operates in two segments, Submerged Arc Furnace and Foundry.

IndustryMetal Fabrication

SectorIndustrials

Employees112

Annual revenue₹62 Cr

How does it make money?

Turns over ₹62 Cr a year. Of every ₹100 of sales, about ₹-8 reaches shareholders as profit, with ₹-3 left at the operating level before interest, tax and depreciation. Each of its 112 employees supports ₹55.0 lakh of revenue a year, the signature of a people-led business.

Revenue / employee₹55.0 lakh

Who are its competitors?

The closest listed comparisons in its industry are TATA STEEL LIMITED, JSW STEEL LIMITED, HINDALCO INDUSTRIES LTD, VEDANTA LIMITED. 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?Little sign of one

Returns on capital of -12.1% 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.

Peer median ROE18.7%

What has been driving growth?

Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved -33% while net margin moved -197% 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-33%

Margin effect-197%

DalalBaazaar Score

35/ 100

Weak

Weighted across six categories. Every point is explained below.

✗ Return on equity is negative
✗ ROE has fallen by 36.1 points over the period

Quality vs. Valuation

Company Quality

31/ 100

Weak

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

Valuation

36/ 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

N/A

No P/E — the company is lossmaking

EV/EBITDA

—

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 21.1% to -15.0% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 24.4% to -12.1% — often a sign of competition or overexpansion.

Red Flags

5 items require attention · 3 high · 2 watch

🔴Thin interest coverageFinancial
Operating profit covers interest only -3.3x — little room if earnings dip.
🔴The company is lossmakingFinancial
Net profit of -₹5 Cr in the latest reported year.
🔴Significant margin compressionFinancial
EBITDA margin has fallen 17.3 points, from 14.2% to -3.1%.
🟡Interest coverage is deterioratingFinancial
Cover has fallen from 1.7x to -3.3x.
🟡Short-term liquidity is tightFinancial
Current ratio of 0.85 — near-term obligations exceed near-term assets.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Self-funding with balance-sheet headroom
Positive free cash flow of ₹4 Cr alongside low debt means growth, buybacks or dividends need no outside money — and a downturn can be absorbed rather than refinanced.

🔴 Bear CaseWhat could go wrong?

Margins are being competed away
EBITDA margin has fallen from 14.2% to -3.1%. If the trend continues, profit falls even on flat sales — and margin decline rarely reverses quickly.
Returns on shareholder capital are falling
ROE has dropped from 21.1% to -15.0%. 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.
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 -5%✓ -3.1%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Interest cover stays above 3x✗ -3.3x
How much operating profit can fall before interest stops being comfortably covered.
3Free cash flow remains positive✓ ₹4 Cr
Profit that never becomes cash eventually stops being profit.
4ROCE stays above 8%✗ -12.1%
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 · 2 neutral · 6 weak

Market Cap

₹17 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

Not meaningful

Loss-making

Earnings are negative, so a P/E multiple can't be read here

P/B Ratio

0.53x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹-4

Loss-making

Negative earnings per share — the business is losing money

ROE

-14.0%

Weak

Weak capital efficiency

ROCE

-12.1%

Weak

Low return on total capital employed

Debt/Equity

0.46x

Low

Conservative leverage

Revenue Growth (YoY)

-22.3%

Shrinking

Sales are contracting

Profit Growth (YoY)

-1017.8%

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

₹4 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

ROA

-5.8%

Weak

Assets generate little profit

Operating Margin

-7.0%

Weak

Thin margins leave little room for error

Net Margin

-8.0%

Weak

Very little revenue reaches the bottom line

Current Ratio

0.85

Adequate

Adequate, but no real cushion

Beta (vs Nifty)

-0.26

Defensive

Steadier than the market

52W Range Position

17%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

12.3 / 13.1

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

78.3

Overbought zone

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹92 Cr	₹88 Cr	₹72 Cr	₹62 Cr	-12.5%
EBITDA	₹13 Cr	₹6 Cr	₹4 Cr	-₹2 Cr	—
EBITDA Margin	14.2%	7.0%	6.2%	-3.1%	—
PAT (Net Profit)	₹8 Cr	₹2 Cr	₹1 Cr	-₹5 Cr	—
EPS	₹7.94	₹1.55	₹0.44	—	—
ROE	21.1%	5.1%	1.4%	-15.0%	—
ROCE	24.4%	8.7%	3.9%	-12.1%	—
Total Debt	₹13 Cr	₹13 Cr	₹18 Cr	₹15 Cr	+5.4%
Free Cash Flow	₹4 Cr	-₹3 Cr	-₹10 Cr	₹4 Cr	+2.4%

🔴 Revenue has shrunk at 12.5% a year over 3 years.

🔴 EBITDA has turned negative, from ₹13 Cr to -₹2 Cr.

🔴 EBITDA Margin has fallen from 14.2% to -3.1% over 3 years (-17.3 pts).

🔴 PAT (Net Profit) has turned negative, from ₹8 Cr to -₹5 Cr.

🔴 ROE has fallen from 21.1% to -15.0% over 3 years (-36.1 pts).

🔴 ROCE has fallen from 24.4% to -12.1% over 3 years (-36.5 pts).

🔴 Total Debt has grown at 5.4% a year over 3 years.

🟢 Free Cash Flow has grown at 2.4% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹57 Cr

Total Liabilities

₹25 Cr

Cash & Equivalents

₹0 Cr

Operating Cash Flow

₹4 Cr

Capex

-₹0 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

77.0%

Corporate Actions

Ex-Dividend Date

21 Sept 2023

Peer Comparison

Company	P/E	ROE
TATA STEEL LIMITED	19.8x	10.8%
JSW STEEL LIMITED	12.0x	24.7%
HINDALCO INDUSTRIES LTD	12.3x	12.0%
VEDANTA LIMITED	10.4x	18.7%

Recent News

1 negative5 general

Compare with

Equitymaster, 17 Oct

Earthstahl & Alloys Appoints Ankit Kumar Dewangan as Company Secretary and Compliance Officer

scanx.trade, 30 Apr

Compare with

Equitymaster, 16 Oct

Earthstahl & Alloys Limited Share Price

Upstox, 19 Aug

Earthstahl & Alloys pays ₹1,180 fine to BSE for compliance delay

scanx.trade, 22 SeptRegulatory

🔴Potentially negativeRegulatory and legal actions carry a financial cost and a governance question. The second usually matters more than the first.

Earthstahl reports net loss of ₹489.81 lakh in FY26

scanx.trade, 25 May

Watch Items

Revenue growth is negative (-22.3%) 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.
RSI is in overbought territory — momentum entries here carry more short-term pullback risk.

DalalBaazaar Thesis

MiddlingFinancial Health · Valuation

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

2 of 4 tripwires tripped — Interest cover stays above 3x; ROCE stays above 8% · see Key things to watch ↑