Inducto Steels Limited

Industrials — Waste Management · BSE

₹56.28+₹0.37 (+0.66%)

DalalBaazaar Score

53 / 100

🟡 Moderate

Verdict

NEUTRAL

Risk

Low

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

In simple words: The business is earning a fairly low return on the money invested in it, with both sales and profits growing well. Thin profit margins are the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:56 pm

Understanding the Business

Company site ↗

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

What does this company do?

Inducto Steels Limited, a ship recycling company, engages in the ship breaking of old and used ships in India. It is also involved in trading and investment activities; and trades in metal scraps, coal, aluminum foils, graphite electrodes, and other industrial inputs.

IndustryWaste Management

SectorIndustrials

Employees58

Annual revenue₹166 Cr

How does it make money?

Turns over ₹166 Cr a year. Of every ₹100 of sales, about ₹0 reaches shareholders as profit, with ₹1 left at the operating level before interest, tax and depreciation. Each of its 58 employees supports ₹2.86 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹2.86 Cr

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?Little sign of one

Returns on capital of 5.0% 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 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 +84% while net margin moved -49% 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+84%

Margin effect-49%

DalalBaazaar Score

53/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ ROE of 1.3% is weak

Quality vs. Valuation

Company Quality

46/ 100

Average

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

Valuation

88/ 100

Cheap

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

10.9x

3Y Median

125.4x

40 monthly readings · mean 106.8x · range 23.6x–196.3x

Sector Median

88.8x

median of 3 sector peers

🟢Current valuation is approximately 91% below its 3y median of 125.4x. 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 88% below the peer median of 88.8x.

vs. its own history

Cheap

125.4x median over 40 months · -91%

vs. sector peers

Cheap

88.8x median of 3 peers · -88%

vs. generic bands

Cheap

Below 15x

EV/EBITDA

4.6x

PEG

—

What's Good / What's Bad

🟢 What's Going Well3

Debt is being paid down
Total debt is down 40% over 3 years.
Cash flow has turned positive
Free cash flow moved from negative to positive over 3 years.
Very low debt
Debt/Equity of 0.23x 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

3 items require attention · 3 high

🔴Thin interest coverageFinancial
Operating profit covers interest only 1.6x — little room if earnings dip.
🔴Receivables growing faster than salesFinancial
Receivables up 277% against revenue up 84% — sales are being booked faster than they are collected.
🔴Inventory building faster than salesFinancial
Inventory up 683% against revenue up 84% — stock may not be moving.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Deleveraging frees up earnings
Debt is down 40% over 3 years. Every rupee of interest not paid drops to the bottom line, so profit can grow even if revenue does not.
Priced below its own history
The stock trades 91% 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 88% below the sector median. Either the market sees a problem the numbers do not show, or the discount closes.
Self-funding with balance-sheet headroom
Positive free cash flow of ₹29 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?

The debt load needs earnings to hold up
Debt is 4.0x EBITDA. At that level a downturn in earnings turns a manageable balance sheet into a refinancing problem, and lenders get paid before shareholders.
Sales are being booked faster than collected
Receivables are up 277% against revenue up 84%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
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

1Revenue growth stays above 17% a year✓ 22.6% CAGR
Latest reported year was 73.1%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above -1%✓ 1.4%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Debt / EBITDA falls below 3x✗ 4.0x
Already stretched, so this is a reduction target rather than a level to hold. Around 3x is where lenders typically start attaching conditions.
4Interest cover stays above 3x✗ 1.6x
How much operating profit can fall before interest stops being comfortably covered.
5Free cash flow remains positive✓ ₹29 Cr
Profit that never becomes cash eventually stops being profit.

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

7 good · 2 neutral · 2 weak

Market Cap

₹23 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

10.9x

Cheap

Cheap against the generic band

P/B Ratio

0.56x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹5.15

Profitable

Profitable on a per-share basis

ROE

1.3%

Weak

Weak capital efficiency

ROCE

5.0%

Weak

Low return on total capital employed

Debt/Equity

0.23x

Low

Conservative leverage

Revenue Growth (YoY)

73.1%

Healthy

Healthy top-line growth

Profit Growth (YoY)

114.4%

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

₹29 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

Operating Margin

7.0%

Average

Average margins

Net Margin

1.0%

Weak

Very little revenue reaches the bottom line

Current Ratio

1.11

Adequate

Adequate, but no real cushion

Beta (vs Nifty)

0.08

Defensive

Steadier than the market

52W Range Position

40%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

59.8 / 61.6

Bearish alignment (short < long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

41.9

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹90 Cr	₹104 Cr	₹159 Cr	₹166 Cr	+22.6%
EBITDA	₹2 Cr	₹1 Cr	-₹3 Cr	₹2 Cr	+8.0%
EBITDA Margin	2.1%	1.3%	-2.2%	1.4%	—
PAT (Net Profit)	₹1 Cr	₹0 Cr	-₹4 Cr	₹1 Cr	-2.4%
EPS	₹1.44	₹0.4	₹-9.26	₹1.34	-2.4%
ROE	1.3%	0.4%	-9.4%	1.3%	—
ROCE	3.5%	2.5%	-9.7%	5.0%	—
Total Debt	₹16 Cr	₹3 Cr	₹16 Cr	₹9 Cr	-15.7%
Free Cash Flow	-₹7 Cr	-₹1 Cr	-₹14 Cr	₹29 Cr	—

🟢 Revenue has grown at 22.6% a year over 3 years.

🟢 EBITDA has grown at 8.0% a year over 3 years.

🟡 EBITDA Margin has held roughly flat at 1.4% over 3 years.

🔴 PAT (Net Profit) has shrunk at 2.4% a year over 3 years.

🔴 EPS has shrunk at 2.4% a year over 3 years.

🟡 ROE has held roughly flat at 1.3% over 3 years.

🟢 ROCE has risen from 3.5% to 5.0% over 3 years (+1.5 pts).

🟢 Total Debt has shrunk at 15.7% a year over 3 years.

🟢 Free Cash Flow has turned positive, from -₹7 Cr to ₹29 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹142 Cr

Total Liabilities

₹102 Cr

Cash & Equivalents

₹21 Cr

Operating Cash Flow

₹29 Cr

Capex

-₹0 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

89.7%

Corporate Actions

Ex-Dividend Date

18 Sept 2013

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

2 negative4 general

Compare with INDUCTO STEEL

Equitymaster, 30 Sept

Inducto Steel promoter discloses SAST non-compliance on gift shares

scanx.trade, 25 SeptRegulatory

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

Insolation Energy consolidated net profit declines 13.80% in the June 2026 quarter

Business Standard, 12 AugResults

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

A-ONE STEELS INDIA LTD. Stock/Share price , NSE/BSE Forecast News and Live Quotes

Equitymaster, 02 Oct

ATIL Stock Price and Chart — BSE:ATIL

TradingView, 31 Dec

Inducto Steel sets Sept 30 for 38th AGM to adopt FY26 financials

scanx.trade, 07 Sept

Watch Items

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

DalalBaazaar Thesis

StrongFinancial Health · Valuation

MiddlingGrowth

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

2 of 5 tripwires tripped — Debt / EBITDA falls below 3x; Interest cover stays above 3x · see Key things to watch ↑