Indian Metals and Ferro Alloys Limited

Basic Materials — Other Industrial Metals & Mining · NSE

₹1,183.00−₹16.60 (−1.38%)

DalalBaazaar Score

69 / 100

🟢 Good

Verdict

REASONABLE

Risk

Moderate

Driven by negative free cash flow, small-cap size, which brings sharper price swings.

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, 7:46 pm

Understanding the Business

Company site ↗

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

What does this company do?

Indian Metals and Ferro Alloys Limited engages in the production and sale of ferro chrome in India and internationally. It operates through Ferro Alloys, Power, and Mining segments.

IndustryOther Industrial Metals & Mining

SectorBasic Materials

Employees2,187

Annual revenue₹2,794 Cr

How does it make money?

Turns over ₹2,794 Cr a year. Of every ₹100 of sales, about ₹15 reaches shareholders as profit, with ₹22 left at the operating level before interest, tax and depreciation. Each of its 2,187 employees supports ₹1.28 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹1.28 Cr

Who are its competitors?

The closest listed comparisons in its industry are HINDALCO INDUSTRIES LTD, VEDANTA LIMITED, TATA STEEL 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?Some evidence

ROCE of 18.5% is above what capital typically costs, which suggests some pricing power, though not yet the sustained, wide gap that marks a durable advantage.

Peer median ROE12.0%

What is the outlook?

2 analysts covering the stock expect revenue to grow about 24.0% and earnings to grow about 27.7% in the year to 2028. These are estimates by people who follow the company, not a forecast for the wider industry.

Est. revenue growth+24.0%

Est. earnings growth+27.7%

Analysts2

What has been driving growth?

Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved +6% while net margin moved +78% 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+6%

Margin effect+78%

DalalBaazaar Score

69/ 100

Good

Weighted across six categories. Every point is explained below.

✓ Beta of 0.45 — historically steadier than the index
✗ Small Cap: thinner liquidity and sharper drawdowns are normal
✓ Profits have been consistent from year to year
✗ 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

68/ 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

12.2x

3Y Median

15.0x

40 monthly readings · mean 14.5x · range 9.1x–21.4x

Sector Median

12.3x

median of 3 sector peers

🟢Current valuation is approximately 19% below its 3y median of 15.0x. 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 is priced broadly in line with the peer median of 12.3x.

vs. its own history

Fair

15.0x median over 40 months · -19%

vs. sector peers

Fair

12.3x median of 3 peers · -1%

vs. generic bands

Cheap

Below 15x

EV/EBITDA

12.2x

PEG

0.52

What's Good / What's Bad

🟢 What's Going Well3

Margins are improving
EBITDA margin is up from 17.4% to 21.5% over 3 years.
Return on equity is rising
ROE has improved from 12.0% to 15.6%.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention0

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

Red Flags

4 items require attention · 3 high · 1 watch

🔴Debt has risen sharplyFinancial
Total debt is up 181% over 3 years, from ₹341 Cr to ₹958 Cr.
🔴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 179% against revenue up 6% — sales are being booked faster than they are collected.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹1,017 Cr in the latest year.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Capital compounds at a high rate
ROCE of 18.5% 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 17.4% to 21.5%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
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 179% against revenue up 6%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
Growth barely outpaces inflation
Revenue compounding at 1.9% 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.
Size brings its own risk
Small 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 20%✓ 21.5%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Free cash flow remains positive✗ -₹1,017 Cr
Profit that never becomes cash eventually stops being profit.
3Revenue growth stays above 4% a year✗ 1.9% CAGR
Latest reported year was 49.7%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
4Debt / EBITDA stays below 2x✓ 1.6x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 16%✓ 18.5%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

10 / 12 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
✓ Analyst consensus isn't majority-sell
✗ Short-term technical trend isn't bearish

Price history

Quick Metrics

7 good · 3 neutral · 1 weak

Market Cap

₹6,383 Cr

Small Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

12.2x

Cheap

Cheap against the generic band

P/B Ratio

2.35x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹97.18

Profitable

Profitable on a per-share basis

ROE

15.6%

Strong

Strong capital efficiency

ROCE

18.5%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

0.35x

Low

Conservative leverage

Revenue Growth (YoY)

49.7%

Healthy

Healthy top-line growth

Profit Growth (YoY)

108.5%

Healthy

Profits growing at a healthy clip

Dividend Yield

1.06%

Modest

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

Free Cash Flow

-₹1,017 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

P/E (Forward)

9.1x

Improving

Below the trailing multiple — the street expects earnings to grow into the price

Operating Margin

26.8%

Good

Healthy core-business profitability

Net Margin

16.7%

Good

Strong bottom-line conversion

Current Ratio

1.44

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.45

Defensive

Steadier than the market

52W Range Position

19%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

1205.2 / 1298.8

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

37.5

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹2,639 Cr	₹2,743 Cr	₹2,535 Cr	₹2,794 Cr	+1.9%
EBITDA	₹460 Cr	₹596 Cr	₹544 Cr	₹601 Cr	+9.4%
EBITDA Margin	17.4%	21.7%	21.4%	21.5%	—
PAT (Net Profit)	₹225 Cr	₹344 Cr	₹379 Cr	₹424 Cr	+23.5%
EPS	₹41.75	₹63.68	₹70.19	₹78.64	+23.5%
ROE	12.0%	16.3%	16.1%	15.6%	—
ROCE	17.6%	24.8%	21.8%	18.5%	—
Total Debt	₹341 Cr	₹237 Cr	₹389 Cr	₹958 Cr	+41.1%
Free Cash Flow	₹151 Cr	₹346 Cr	₹470 Cr	-₹1,017 Cr	—

🟡 Revenue has been broadly flat over 3 years (1.9% a year).

🟢 EBITDA has grown at 9.4% a year over 3 years.

🟢 EBITDA Margin has risen from 17.4% to 21.5% over 3 years (+4.1 pts).

🟢 PAT (Net Profit) has grown at 23.5% a year over 3 years.

🟢 EPS has grown at 23.5% a year over 3 years.

🟢 ROE has risen from 12.0% to 15.6% over 3 years (+3.6 pts).

🟡 ROCE has held roughly flat at 18.5% over 3 years.

🔴 Total Debt has grown at 41.1% a year over 3 years.

🔴 Free Cash Flow has turned negative, from ₹151 Cr to -₹1,017 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹4,317 Cr

Total Liabilities

₹1,590 Cr

Cash & Equivalents

₹34 Cr

Operating Cash Flow

₹318 Cr

Capex

-₹1,335 Cr

Shareholding (proxy)

Institutional Holding

0.8%

Insider Holding

74.5%

Corporate Actions

Dividend Rate

₹12.5

Ex-Dividend Date

31 Jul 2026

Analyst Consensus

Recommendations

2 Buy · 0 Hold · 0 Sell

Target Price (Mean)

₹1,756

+48.4% vs CMP

Target Range

₹1,652 – ₹1,860

Peer Comparison

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

Recent News

1 positive2 mixed3 general

Poojaa Precision Engg. Ltd Share Price

Business Today, 16 Oct

Stocks to buy in 2026 for long term: Indian Metal & Ferro Alloys, SBI among 5 stocks that could give 10-30% return

The Economic Times, 11 Aug

Indian Metals and Ferro Alloys Stock Signals to Watch This Week

Univest, 28 Sept

IMFA Forecast — Price Target — Prediction for 2027

TradingView, 26 JunAnalyst view

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

Indian Metals and Ferro Alloys (NSEI:IMFA) Stock Forecast & Analyst Predictions

Simply Wall Street, 03 SeptAnalyst view

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

Indian Metals & Ferro Alloys consolidated net profit rises 108.41% in the June 2026 quarter

Business Standard, 04 AugResults

🟢Potentially positiveReported improvement. Check whether it came from volume, price or a one-off item before treating it as a trend.

Watch Items

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

DalalBaazaar Thesis

StrongBusiness Quality · Growth · Profitability · Valuation

MiddlingFinancial Health · Risk

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

2 of 5 tripwires tripped — Free cash flow remains positive; Revenue growth stays above 4% a year · see Key things to watch ↑