Jainam Ferro Alloys (I) Limited

Sector n/a · NSE

₹140.00−₹5.00 (−3.45%)

DalalBaazaar Score

36 / 100

🔴 Weak

Verdict

CAUTION

Risk

Moderate

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

In simple words: The business is earning a fairly low return on the money invested in it, but sales are shrinking. Cash generation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:09 pm

Caution warranted. Multiple fundamental metrics — flagged in red below — point to either valuation stretch, leverage risk, or weakening profitability. This doesn't mean avoid the stock outright, but it does mean the burden of proof is on the growth story to justify the current price.

Understanding the Business

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

How does it make money?

Turns over ₹206 Cr a year. Of every ₹100 of sales, about ₹3 reaches shareholders as profit, with ₹7 left at the operating level before interest, tax and depreciation.

EBITDA margin7.0%

Net margin3.2%

What is its competitive advantage?Little sign of one

Returns on capital of 6.0% 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.

ROCE6.0%

ROE4.5%

What has been driving growth?

Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved -19% while net margin moved -65% 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-19%

Margin effect-65%

DalalBaazaar Score

36/ 100

Weak

Weighted across six categories. Every point is explained below.

✗ Revenue has contracted at 6.9% a year
✗ Profit has declined at 34.5% a year
✗ Profit fell 34.8% in the latest year

Quality vs. Valuation

Company Quality

35/ 100

Weak

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

Valuation

60/ 100

Fair

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

Weak on business quality and not cheap enough to compensate.

vs. its own history

Not enough price and earnings history

vs. sector peers

Not enough peers with a usable P/E

vs. generic bands

No P/E available

P/E (Trailing)

—

P/B

—

EV/EBITDA

12.8x

PEG

—

Dividend Yield

None

What's Good / What's Bad

🟢 What's Going Well2

Very low debt
Debt/Equity of 0.15x leaves the balance sheet with plenty of headroom.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention6

Margins are compressing
EBITDA margin has slipped from 12.8% to 7.0% over 3 years.
Debt is rising
Total debt is up 44917% over 3 years — worth checking what it funded.
Free cash flow is negative
The business is not currently covering its capital spending from operations.
Return on equity is falling
ROE has dropped from 26.7% to 4.5% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 36.4% to 6.0% — often a sign of competition or overexpansion.
Inventory building faster than sales
Inventory is up 72% against revenue growth of -19% — stock may not be moving.

Red Flags

5 items require attention · 4 high · 1 watch

🔴Debt has risen sharplyFinancial
Total debt is up 44917% over 3 years, from ₹0 Cr to ₹22 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.
🔴Significant margin compressionFinancial
EBITDA margin has fallen 5.8 points, from 12.8% to 7.0%.
🔴Inventory building faster than salesFinancial
Inventory up 72% against revenue up -19% — stock may not be moving.
🟡Profit is decliningFinancial
Net profit is down 72% over 3 years.

Investment Thesis

🟢 Bull CaseWhat could make this work?

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?

Margins are being competed away
EBITDA margin has fallen from 12.8% to 7.0%. If the trend continues, profit falls even on flat sales — and margin decline rarely reverses quickly.
Returns on shareholder capital are falling
ROE has dropped from 26.7% to 4.5%. 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

1EBITDA margin holds above 5%✓ 7.0%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Free cash flow remains positive✗ -₹39 Cr
Profit that never becomes cash eventually stops being profit.
3Debt / EBITDA stays below 2x✓ 1.5x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
4ROCE stays above 8%✗ 6.0%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

2 / 9 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
✗ Short-term technical trend isn't bearish

Price history

Quick Metrics

1 good · 5 neutral · 5 weak

Market Cap

₹164 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

Not available

No data

Source didn't return this field

P/B Ratio

Not available

No data

Source didn't return this field

EPS (TTM)

Not available

No data

Source didn't return this field

ROE

4.5%

Weak

Weak capital efficiency

ROCE

6.0%

Weak

Low return on total capital employed

Debt/Equity

0.15x

Low

Conservative leverage

Revenue Growth (YoY)

-7.1%

Shrinking

Sales are contracting

Profit Growth (YoY)

-34.8%

Falling

Profits are shrinking

Dividend Yield

None

No dividend yield reported — usually means no payout, but verify if one was recently initiated

Free Cash Flow

-₹39 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

CMP

₹140

Gross Margin

11.3%

Proxy

Operating margin unavailable — showing gross margin instead

Net Margin

3.2%

Average

Average bottom-line conversion

Current Ratio

2.04

Comfortable

Healthy short-term liquidity

Technical Snapshot

SMA 20 / SMA 50

204.9 / 218.6

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

39.7

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹255 Cr	₹190 Cr	₹222 Cr	₹206 Cr	-6.9%
EBITDA	₹33 Cr	₹10 Cr	₹19 Cr	₹14 Cr	-23.8%
EBITDA Margin	12.8%	5.3%	8.4%	7.0%	—
PAT (Net Profit)	₹23 Cr	₹5 Cr	₹10 Cr	₹7 Cr	-34.5%
EPS	₹22.01	₹0.51	₹9.47	—	—
ROE	26.7%	5.1%	7.5%	4.5%	—
ROCE	36.4%	7.8%	11.1%	6.0%	—
Total Debt	₹0 Cr	₹10 Cr	₹2 Cr	₹22 Cr	+666.4%
Free Cash Flow	-₹3 Cr	-₹10 Cr	-₹6 Cr	-₹39 Cr	—

🔴 Revenue has shrunk at 6.9% a year over 3 years.

🔴 EBITDA has shrunk at 23.8% a year over 3 years.

🔴 EBITDA Margin has fallen from 12.8% to 7.0% over 3 years (-5.8 pts).

🔴 PAT (Net Profit) has shrunk at 34.5% a year over 3 years.

🔴 ROE has fallen from 26.7% to 4.5% over 3 years (-22.2 pts).

🔴 ROCE has fallen from 36.4% to 6.0% over 3 years (-30.4 pts).

🔴 Total Debt has grown at 666.4% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹202 Cr

Total Liabilities

₹56 Cr

Total Debt

₹22 Cr

Cash & Equivalents

₹0 Cr

Operating Cash Flow

₹30 Cr

Capex

-₹69 Cr

Recent News

6 general

Jainam Ferro Alloys (I) Upper Circuit Today: Price, Data and Peers

Univest, 07 Oct

Poojaa Precision Engg. Ltd Share Price

Business Today, 16 Oct

Jainam Ferro Alloys (I) Ltd. Key Financial Ratios – Valuation, Profitability & More

Value Research, 02 Sept

TEAMTECH Stock Price and Chart — NSE:TEAMTECH

TradingView, 26 May

Jainam Ferro Alloys (I) (NSEI:JAINAM) - Stock Analysis

Simply Wall Street, 08 Oct

Jainam Ferro Alloys pulls off a mammoth show in first half, EBIDTA zooms 892% and PAT surged 13.9x (YoY)

Business Standard, 22 Nov

Watch Items

Revenue growth is negative (-7.1%) on the latest reported period — check if this is one-off or a trend.
Cross-check against the company's latest quarterly filing / investor presentation before acting.
Sector/industry classification unavailable — verify manually for peer comparison.
3 metrics couldn't be retrieved for this stock — this is more common for smaller or thinly-covered listings.

DalalBaazaar Thesis

🔴Business QualityWeak5.9/20

🟢Financial HealthStrong13/20

🔴GrowthWeak2.4/20

🔴ProfitabilityWeak4.6/15

🟡ValuationFair7.5/15

🔴RiskHigh2.5/10

Weak on the fundamentals

Poor scores on business quality without a price low enough to compensate. There is no obvious argument for owning this over a stronger company at a similar valuation. 4 high-severity red flags sit above this conclusion and should be read first.

This thesis breaks if

✓EBITDA margin holds above 5%7.0%
✗Free cash flow remains positive-₹39 Cr
✓Debt / EBITDA stays below 2x1.5x
✗ROCE stays above 8%6.0%