El Forge Limited

Industrials — Metal Fabrication · BSE

₹25.00+₹0.30 (+1.21%)

DalalBaazaar Score

55 / 100

🟡 Moderate

Verdict

NEUTRAL

Risk

Moderate

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

In simple words: Reasonable but unspectacular business quality, with both sales and profits growing well. Cash generation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:57 pm

Understanding the Business

Company site ↗

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

What does this company do?

El Forge Limited manufactures and sells steel forgings for the automobile industry in India.

IndustryMetal Fabrication

SectorIndustrials

Employees146

Annual revenue₹73 Cr

How does it make money?

Turns over ₹73 Cr a year. Of every ₹100 of sales, about ₹3 reaches shareholders as profit, with ₹6 left at the operating level before interest, tax and depreciation. Each of its 146 employees supports ₹50.1 lakh of revenue a year, the signature of a people-led business.

Revenue / employee₹50.1 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 9.2% 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 +40% while net margin moved -175% 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+40%

Margin effect-175%

DalalBaazaar Score

55/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ ROE of 9.4% is weak

Quality vs. Valuation

Company Quality

55/ 100

Average

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

Valuation

50/ 100

Fair

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

15.7x

2Y Median

13.2x

28 monthly readings · mean 9.4x · range 0.6x–22.5x

Sector Median

12.2x

median of 4 sector peers

⚠️Current valuation is approximately 19% above its 2y median of 13.2x. Paying more than usual needs a reason — faster growth, a better balance sheet, or a re-rating you believe in.

⚠️Against its sector it trades 29% above the peer median of 12.2x.

vs. its own history

Fair

13.2x median over 28 months · +19%

vs. sector peers

Expensive

12.2x median of 4 peers · +29%

vs. generic bands

Fair

15x–35x

EV/EBITDA

10.7x

PEG

—

What's Good / What's Bad

🟢 What's Going Well3

Cash generation is improving
Free cash flow is up 110% over 3 years.
Return on capital is rising
ROCE has improved from -7.2% to 9.2%.
Very low debt
Debt/Equity of 0.17x leaves the balance sheet with plenty of headroom.

🔴 What Needs Attention0

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

Red Flags

1 item require attention · 1 watch

🟡Receivables growing faster than salesFinancial
Receivables up 76% against revenue up 40% — sales are being booked faster than they are collected.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Self-funding with balance-sheet headroom
Positive free cash flow of ₹3 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?

Sales are being booked faster than collected
Receivables are up 76% against revenue up 40%. 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 29% above the peer median. That premium needs a reason that persists, or it closes.
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 9% a year✓ 11.8% CAGR
Latest reported year was 14.9%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 4%✓ 6.4%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Free cash flow remains positive✓ ₹3 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 1.0x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 8%✓ 9.2%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

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

4 good · 6 neutral · 1 weak

Market Cap

₹51 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

15.7x

Fair

Fairly valued against the generic band

P/B Ratio

1.87x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹1.59

Profitable

Profitable on a per-share basis

ROE

9.4%

Moderate

Moderate capital efficiency

ROCE

9.2%

Moderate

Moderate return on the capital in the business

Debt/Equity

0.17x

Low

Conservative leverage

Revenue Growth (YoY)

14.9%

Healthy

Healthy top-line growth

Profit Growth (YoY)

126.2%

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

-₹0 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

ROA

4.0%

Average

Average asset productivity

Operating Margin

5.7%

Average

Average margins

Net Margin

3.0%

Average

Average bottom-line conversion

Current Ratio

2.06

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.76

Defensive

Steadier than the market

52W Range Position

74%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

23.2 / 20.1

Bullish alignment (short > long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

51.9

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹52 Cr	₹68 Cr	₹69 Cr	₹73 Cr	+11.8%
EBITDA	₹4 Cr	₹5 Cr	₹4 Cr	₹5 Cr	+6.5%
EBITDA Margin	7.5%	7.9%	6.5%	6.4%	—
PAT (Net Profit)	-₹2 Cr	₹71 Cr	₹2 Cr	₹2 Cr	—
EPS	₹-1.13	₹34.99	₹1.13	₹1.2	—
ROE	—	316.4%	9.3%	8.9%	—
ROCE	-7.2%	263.5%	9.4%	9.2%	—
Total Debt	₹5 Cr	₹5 Cr	₹5 Cr	₹5 Cr	+0.0%
Free Cash Flow	₹1 Cr	₹1 Cr	₹2 Cr	₹3 Cr	+28.0%

🟢 Revenue has grown at 11.8% a year over 3 years.

🟢 EBITDA has grown at 6.5% a year over 3 years.

🔴 EBITDA Margin has fallen from 7.5% to 6.4% over 3 years (-1.0 pts).

🟢 PAT (Net Profit) has turned positive, from -₹2 Cr to ₹2 Cr.

🟢 EPS has turned positive, from ₹-1.13 to ₹1.2.

🔴 ROE has fallen from 316.4% to 8.9% over 3 years (-307.4 pts).

🟢 ROCE has risen from -7.2% to 9.2% over 3 years (+16.4 pts).

🟡 Total Debt has been broadly flat over 3 years (0.0% a year).

🟢 Free Cash Flow has grown at 28.0% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹41 Cr

Total Liabilities

₹14 Cr

Cash & Equivalents

₹5 Cr

Operating Cash Flow

₹3 Cr

Capex

—

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

50.5%

Corporate Actions

Ex-Dividend Date

12 Sept 2008

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 mixed5 general

Top 15 Low-Price Stocks In India To Buy In October 2026

Samco, 17 Oct

Compare with EL FORGE.

Equitymaster, 07 Oct

EL Forge Ltd. Shareholding Pattern – Promoters, FIIs & DIIs

Value Research, 30 Aug

EL Forge shareholders approve independent director appointments

scanx.trade, 28 Sept

El Forge Q1 Results FY27: PAT Rs 1 Cr, Revenue Rs 21 crore

Univest, 14 AugResults

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

Microcap 250 index hits 52-week high; Manorama, Balu Forge surge up to 15%

Business Standard, 14 Aug

Watch Items

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

DalalBaazaar Thesis

StrongFinancial Health · Growth

MiddlingValuation

WeakBusiness Quality · Profitability · Risk

Points for each in the Score ↑

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.

All 5 tripwires holding · see Key things to watch ↑