Gallard Steel Limited

Industrials — Railroads · BSE

₹169.00+₹0.15 (+0.09%)

DalalBaazaar Score

68 / 100

🟢 Good

Verdict

REASONABLE

Risk

High

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

In simple words: Strong business and financial position, 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, 7:47 pm

Understanding the Business

Company site ↗

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

What does this company do?

Gallard Steel Limited engages in the manufacture and supply of engineering castings, machined components and assemblies for railway traction, rolling stock, defence and industrial applications in India.

IndustryRailroads

SectorIndustrials

Employees79

Annual revenue₹67 Cr

How does it make money?

Turns over ₹67 Cr a year. Of every ₹100 of sales, about ₹14 reaches shareholders as profit, with ₹25 left at the operating level before interest, tax and depreciation. Each of its 79 employees supports ₹84.7 lakh of revenue a year, the signature of a people-led business.

Revenue / employee₹84.7 lakh

Who are its competitors?

The closest listed comparisons in its industry are LARSEN & TOUBRO LTD., SIEMENS LTD, ABB INDIA 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?The numbers suggest a real one

ROCE has stayed above 15% in every year available and stands at 20.7%. Returns that high normally get competed away; when they persist, something is protecting them, and its ROE of 24.0% against a peer median of 15.2% is consistent with that. What that something is — brand, scale, switching costs, regulation — the accounts cannot tell you.

Peer median ROE15.2%

What has been driving growth?

Growth has come mainly from selling more, rather than from keeping more of each sale. Over 3 years revenue moved +226% while net margin moved +146% 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+226%

Margin effect+146%

DalalBaazaar Score

68/ 100

Good

Weighted across six categories. Every point is explained below.

✗ Micro Cap: thinner liquidity and sharper drawdowns are normal
✗ Profits have swung sharply from year to year — earnings are hard to forecast
✗ Negative free cash flow means dependence on external funding

Quality vs. Valuation

Company Quality

71/ 100

Good

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

Valuation

81/ 100

Cheap

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

A good business currently available at an undemanding price — the combination this framework is built to look for.

Historical Valuation

Current P/E

14.6x

1.1Y Median

25.7x

13 monthly readings · mean 26.2x · range 19.8x–36.6x

Sector Median

88.8x

median of 3 sector peers

🟢Current valuation is approximately 43% below its 1.1y median of 25.7x. 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 84% below the peer median of 88.8x.

vs. its own history

Cheap

25.7x median over 13 months · -43%

vs. sector peers

Cheap

88.8x median of 3 peers · -84%

vs. generic bands

Cheap

Below 15x

EV/EBITDA

9.2x

PEG

0.15

What's Good / What's Bad

🟢 What's Going Well3

Margins are improving
EBITDA margin is up from 14.2% to 25.4% over 3 years.
High return on capital employed
ROCE of 20.7% 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 Attention1

Return on equity is falling
ROE has dropped from 18.6% to 15.5% — each rupee of shareholder capital earns less than it did.

Red Flags

4 items require attention · 4 high

🔴Debt has risen sharplyFinancial
Total debt is up 125% over 3 years, from ₹9 Cr to ₹21 Cr.
🔴Free cash flow negative for 4 yearsFinancial
The business has not covered its capital spending from operations for several years running, which has to be funded externally.
🔴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 341% against revenue up 226% — 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 20.7% 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 14.2% to 25.4%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
Priced below its own history
The stock trades 43% below its own median multiple. If the business performs as it has and simply re-rates back to normal, that gap is return on its own.
Cheaper than its peers
It trades 84% below the sector median. Either the market sees a problem the numbers do not show, or the discount closes.
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?

Sales are being booked faster than collected
Receivables are up 341% against revenue up 226%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
Returns on shareholder capital are falling
ROE has dropped from 18.6% to 15.5%. 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
4 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

1Revenue growth stays above 36% a year✓ 48.2% CAGR
Latest reported year was 26.5%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 23%✓ 25.4%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Free cash flow remains positive✗ -₹7 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 1.2x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 18%✓ 20.7%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

9 / 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

7 good · 3 neutral · 1 weak

Market Cap

₹161 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

14.6x

Cheap

Cheap against the generic band

P/B Ratio

2.73x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹11.59

Profitable

Profitable on a per-share basis

ROE

24.0%

Strong

Strong capital efficiency

ROCE

20.7%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

0.36x

Low

Conservative leverage

Revenue Growth (YoY)

26.5%

Healthy

Healthy top-line growth

Profit Growth (YoY)

31.4%

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

-₹9 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

ROA

12.0%

Good

Assets are working hard

Operating Margin

19.2%

Good

Healthy core-business profitability

Net Margin

13.4%

Good

Strong bottom-line conversion

Current Ratio

2.23

Comfortable

Healthy short-term liquidity

52W Range Position

43%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

167.7 / 173.2

Bearish alignment (short < long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

59.8

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹21 Cr	₹27 Cr	₹53 Cr	₹67 Cr	+48.2%
EBITDA	₹3 Cr	₹6 Cr	₹13 Cr	₹17 Cr	+79.9%
EBITDA Margin	14.2%	22.5%	24.0%	25.4%	—
PAT (Net Profit)	₹1 Cr	₹3 Cr	₹6 Cr	₹9 Cr	+100.2%
EPS	₹1.19	₹3.36	₹6.39	—	—
ROE	18.6%	29.0%	35.5%	15.5%	—
ROCE	21.5%	19.9%	34.4%	20.7%	—
Total Debt	₹9 Cr	₹18 Cr	₹20 Cr	₹21 Cr	+31.0%
Free Cash Flow	-₹3 Cr	-₹9 Cr	-₹0 Cr	-₹7 Cr	—

🟢 Revenue has grown at 48.2% a year over 3 years.

🟢 EBITDA has grown at 79.9% a year over 3 years.

🟢 EBITDA Margin has risen from 14.2% to 25.4% over 3 years (+11.2 pts).

🟢 PAT (Net Profit) has grown at 100.2% a year over 3 years.

🔴 ROE has fallen from 18.6% to 15.5% over 3 years (-3.1 pts).

🟡 ROCE has held roughly flat at 20.7% over 3 years.

🔴 Total Debt has grown at 31.0% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹90 Cr

Total Liabilities

₹32 Cr

Cash & Equivalents

₹26 Cr

Operating Cash Flow

₹4 Cr

Capex

-₹11 Cr

Shareholding (proxy)

Institutional Holding

5.1%

Insider Holding

81.1%

Peer Comparison

Company	P/E	ROE
LARSEN & TOUBRO LTD.	30.1x	15.2%
SIEMENS LTD	88.8x	10.5%
ABB INDIA LIMITED	92.6x	19.1%

Recent News

1 mixed5 general

Compare with

Equitymaster, 08 Oct

Gallard Steel to host investor conference on September 30, 2026

scanx.trade, 30 Sept

Strong market debut: Gallard Steel shares settle 56% higher than IPO price on debut day

Moneycontrol.com, 26 NovPrice 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.

Strong start! Gallard Steel shares list at 49% premium over IPO price on BSE SME platform

The Economic Times, 26 Nov

Gallard Steel IPO listing: Shares list at 49% premium over issue price on BSE SME

Livemint, 26 Nov

Gallard Steel IPO Listing: Shares Debut at 49% Premium, Strong Market Response

Samco, 26 Nov

Watch Items

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

DalalBaazaar Thesis

StrongBusiness Quality · Financial Health · Growth · Profitability · Valuation

WeakRisk

Points for each in the Score ↑

Attractive on both counts

A good business currently available at an undemanding price — the combination this framework exists to look for. The work left is qualitative: whether the advantage the numbers imply is one you can identify and expect to last. 4 high-severity red flags sit above this conclusion and should be read first.

1 of 5 tripwires tripped — Free cash flow remains positive · see Key things to watch ↑