Gandhi Special Tubes Limited

Industrials — Metal Fabrication · NSE

₹930.35−₹13.35 (−1.41%)

DalalBaazaar Score

70 / 100

🟢 Good

Verdict

REASONABLE

Risk

Low

Driven by micro-cap size, which brings thin liquidity.

In simple words: Strong business and financial position, with both sales and profits growing well. Nothing obvious stands out as stretched — the usual checks on business quality and management still apply.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:03 pm

Understanding the Business

Company site ↗

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

What does this company do?

Gandhi Special Tubes Limited manufactures and markets welded and seamless steel tubes, and nuts in India.

IndustryMetal Fabrication

SectorIndustrials

Employees447

Annual revenue₹188 Cr

How does it make money?

Turns over ₹188 Cr a year. Of every ₹100 of sales, about ₹36 reaches shareholders as profit, with ₹46 left at the operating level before interest, tax and depreciation. Each of its 447 employees supports ₹42.0 lakh of revenue a year, the signature of a people-led business.

Revenue / employee₹42.0 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?The numbers suggest a real one

ROCE has stayed above 15% in every year available and stands at 28.0%. Returns that high normally get competed away; when they persist, something is protecting them, and its ROE of 21.6% against a peer median of 18.7% is consistent with that. What that something is — brand, scale, switching costs, regulation — the accounts cannot tell you.

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 +15% while net margin moved +25% 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+15%

Margin effect+25%

DalalBaazaar Score

70/ 100

Good

Weighted across six categories. Every point is explained below.

✗ Revenue CAGR of only 4.9% — barely ahead of inflation
• Profit CAGR of 13.0%

Quality vs. Valuation

Company Quality

72/ 100

Good

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

Valuation

57/ 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

15.0x

3Y Median

17.3x

40 monthly readings · mean 17.5x · range 13.0x–21.7x

Sector Median

12.2x

median of 4 sector peers

🟢Current valuation is approximately 14% below its 3y median of 17.3x. 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 23% above the peer median of 12.2x.

vs. its own history

Fair

17.3x median over 40 months · -14%

vs. sector peers

Expensive

12.2x median of 4 peers · +23%

vs. generic bands

Cheap

Below 15x

EV/EBITDA

12.1x

PEG

1.15

What's Good / What's Bad

🟢 What's Going Well5

Margins are improving
EBITDA margin is up from 38.3% to 45.9% over 3 years.
Debt is being paid down
Total debt is down 68% over 3 years.
High return on capital employed
ROCE of 28.0% is the mark of a business that converts capital into profit efficiently.
Very low debt
Debt/Equity of 0.03x leaves the balance sheet with plenty of headroom.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention2

Return on equity is falling
ROE has dropped from 26.0% to 21.6% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 33.0% to 28.0% — often a sign of competition or overexpansion.

Red Flags

1 item require attention · 1 high

🔴Inventory building faster than salesFinancial
Inventory up 134% against revenue up 15% — stock may not be moving.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Capital compounds at a high rate
ROCE of 28.0% 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 38.3% to 45.9%. 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 68% over 3 years. Every rupee of interest not paid drops to the bottom line, so profit can grow even if revenue does not.
Self-funding with balance-sheet headroom
Positive free cash flow of ₹53 Cr alongside low debt means growth, buybacks or dividends need no outside money — and a downturn can be absorbed rather than refinanced.
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?

A premium to the sector to defend
It trades 23% above the peer median. That premium needs a reason that persists, or it closes.
Growth barely outpaces inflation
Revenue compounding at 4.9% 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.
Returns on shareholder capital are falling
ROE has dropped from 26.0% to 21.6%. 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.
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 44%✓ 45.9%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Revenue growth stays above 4% a year✓ 4.9% CAGR
Latest reported year was 18.9%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
3Free cash flow remains positive✓ ₹53 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 0.0x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 25%✓ 28.0%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

11 / 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

8 good · 3 neutral · 0 weak

Market Cap

₹1,050 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

15.0x

Cheap

Cheap against the generic band

P/B Ratio

3.58x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹62.08

Profitable

Profitable on a per-share basis

ROE

21.6%

Strong

Strong capital efficiency

ROCE

28.0%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

0.03x

Low

Conservative leverage

Revenue Growth (YoY)

18.9%

Healthy

Healthy top-line growth

Profit Growth (YoY)

29.3%

Healthy

Profits growing at a healthy clip

Dividend Yield

1.61%

Modest

Small cash return — most of the return has to come from the price

Free Cash Flow

₹53 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

Operating Margin

45.1%

Good

Healthy core-business profitability

Net Margin

37.2%

Good

Strong bottom-line conversion

Current Ratio

6.11

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.84

Market-like

Moves roughly in line with the market

52W Range Position

68%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

959.1 / 921.5

Bullish alignment (short > long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

40.1

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹163 Cr	₹166 Cr	₹169 Cr	₹188 Cr	+4.9%
EBITDA	₹62 Cr	₹67 Cr	₹71 Cr	₹86 Cr	+11.4%
EBITDA Margin	38.3%	40.4%	42.0%	45.9%	—
PAT (Net Profit)	₹47 Cr	₹56 Cr	₹59 Cr	₹68 Cr	+13.0%
EPS	₹38.95	₹45.74	₹48.28	₹56.26	+13.0%
ROE	26.0%	24.9%	22.1%	21.6%	—
ROCE	33.0%	31.6%	28.1%	28.0%	—
Total Debt	₹0 Cr	₹0 Cr	₹0 Cr	₹0 Cr	-31.3%
Free Cash Flow	₹44 Cr	₹23 Cr	₹43 Cr	₹53 Cr	+6.2%

🟢 Revenue has grown at 4.9% a year over 3 years.

🟢 EBITDA has grown at 11.4% a year over 3 years.

🟢 EBITDA Margin has risen from 38.3% to 45.9% over 3 years (+7.5 pts).

🟢 PAT (Net Profit) has grown at 13.0% a year over 3 years.

🟢 EPS has grown at 13.0% a year over 3 years.

🔴 ROE has fallen from 26.0% to 21.6% over 3 years (-4.4 pts).

🔴 ROCE has fallen from 33.0% to 28.0% over 3 years (-5.0 pts).

🟢 Total Debt has shrunk at 31.3% a year over 3 years.

🟢 Free Cash Flow has grown at 6.2% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹340 Cr

Total Liabilities

₹24 Cr

Cash & Equivalents

₹5 Cr

Operating Cash Flow

₹55 Cr

Capex

-₹2 Cr

Shareholding (proxy)

Institutional Holding

1.0%

Insider Holding

76.0%

Corporate Actions

Dividend Rate

₹15

Ex-Dividend Date

05 Aug 2026

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

2 positive2 mixed1 negative1 general

Gandhi Special Tubes buyback opens August 27 at ₹900 per share

scanx.trade, 27 AugCapital return

🟢Potentially positiveCash or shares returned to holders. A buyback is only good value if the shares were cheap when bought.

Gandhi Special Tubes Q4 Net Profit Falls 21% to ₹9.4 Cr Despite 9% Revenue Growth

Sahi, 25 MayResults

🔴Potentially negativeReported deterioration, which feeds the growth and margin inputs on this page directly.

Gandhi Special Tubes (NSE:GANDHITUBE) Ticks All The Boxes When It Comes To Earnings Growth

Simply Wall Street, 26 MayResults

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

Gandhi Special Tubes Share Price Target 2027, 2028 and 2030: Long Term Analyst Forecast

Univest, 13 AugAnalyst view

🟡Mixed / dependsBroker commentary — an opinion about the price rather than new information about the business.

Gandhi Special Tubes Ltd. Shareholding Pattern – Promoters, FIIs & DIIs

Value Research, 30 Aug

Gandhi Special Tubes Limited announces an Equity Buyback for 868,100 shares, representing 7.14% for INR 781.29 million.

marketscreener.com, 25 MayCapital return

🟢Potentially positiveCash or shares returned to holders. A buyback is only good value if the shares were cheap when bought.

Watch Items

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

DalalBaazaar Thesis

StrongBusiness Quality · Financial Health · Profitability · Valuation

MiddlingGrowth · Risk

Points for each in the Score ↑

Good business at a fair price

A sound business at a reasonable valuation. Suitable for a long-term holding, with the valuation and the direction of margins worth watching rather than the business itself. 1 high-severity red flag sits above this conclusion and should be read first.

All 5 tripwires holding · see Key things to watch ↑