JTL Defence Limited

Basic Materials — Copper · BSE

₹632.05+₹12.35 (+1.99%)

DalalBaazaar Score

37 / 100

🔴 Weak

Verdict

CAUTION

Risk

Very High

Driven by negative free cash flow, the company is currently loss-making, micro-cap size, which brings thin liquidity.

In simple words: The company is currently losing money, 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, 6:59 pm

Understanding the Business

Company site ↗

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

What does this company do?

JTL Defence Limited manufactures and sells non-ferrous metal products in India and internationally.

IndustryCopper

SectorBasic Materials

Employees55

Annual revenue₹19 Cr

How does it make money?

Turns over ₹19 Cr a year. Of every ₹100 of sales, about ₹1 reaches shareholders as profit, with ₹31 left at the operating level before interest, tax and depreciation. Each of its 55 employees supports ₹35.1 lakh of revenue a year, the signature of a people-led business.

Revenue / employee₹35.1 lakh

Who are its competitors?

The closest listed comparisons in its industry are TATA STEEL LIMITED, JSW STEEL LIMITED, ULTRATECH CEMENT LIMITED, ASIAN PAINTS 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 0.4% 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 ROE22.3%

What has been driving growth?

Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved -16% while net margin moved -102% 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-16%

Margin effect-102%

DalalBaazaar Score

37/ 100

Weak

Weighted across six categories. Every point is explained below.

✗ Revenue has contracted at 5.7% a year

Quality vs. Valuation

Company Quality

38/ 100

Weak

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

Valuation

25/ 100

Expensive

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

N/A

No P/E — the company is lossmaking

EV/EBITDA

121.9x

PEG

—

What's Good / What's Bad

🟢 What's Going Well2

Margins are improving
EBITDA margin is up from -29.6% to 30.8% over 3 years.
Debt is being paid down
Total debt is down 75% over 3 years.

🔴 What Needs Attention0

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

Red Flags

5 items require attention · 3 high · 2 watch

🔴Thin interest coverageFinancial
Operating profit covers interest only 1.1x — little room if earnings dip.
🔴Receivables growing faster than salesFinancial
Receivables up 71% against revenue up -16% — sales are being booked faster than they are collected.
🔴Inventory building faster than salesFinancial
Inventory up 4463% against revenue up -16% — stock may not be moving.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹23 Cr in the latest year.
🟡Shareholders have been dilutedOwnership
Shares outstanding are up 535% over 3 years — each existing share owns a smaller slice of the company.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Margin expansion has further to run
EBITDA margin has risen from -29.6% to 30.8%. 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 75% over 3 years. Every rupee of interest not paid drops to the bottom line, so profit can grow even if revenue does not.

🔴 Bear CaseWhat could go wrong?

The debt load needs earnings to hold up
Debt is 10.1x 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 71% against revenue up -16%. 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

1EBITDA margin holds above 29%✓ 30.8%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Debt / EBITDA falls below 3x✗ 10.1x
Already stretched, so this is a reduction target rather than a level to hold. Around 3x is where lenders typically start attaching conditions.
3Free cash flow remains positive✗ -₹23 Cr
Profit that never becomes cash eventually stops being profit.
4Interest cover stays above 3x✗ 1.1x
How much operating profit can fall before interest stops being comfortably covered.
5ROCE stays above 8%✗ 0.4%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

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

3 good · 3 neutral · 5 weak

Market Cap

₹665 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

Not meaningful

Loss-making

Earnings are negative, so a P/E multiple can't be read here

P/B Ratio

4.52x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹-0.46

Loss-making

Negative earnings per share — the business is losing money

ROE

0.1%

Weak

Weak capital efficiency

ROCE

0.4%

Weak

Low return on total capital employed

Debt/Equity

0.30x

Low

Conservative leverage

Revenue Growth (YoY)

1868.3%

Healthy

Healthy top-line growth

Profit Growth (YoY)

104.2%

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

-₹23 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

Operating Margin

-7.1%

Weak

Thin margins leave little room for error

Net Margin

1.4%

Weak

Very little revenue reaches the bottom line

Current Ratio

2.86

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

32.53

High swing

Swings more than the market in both directions

52W Range Position

66%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

702.7 / 674.0

Bullish alignment (short > long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

20.5

Oversold zone

Financial Trend (5-Year)

Metric	FY22	FY23	FY24	FY25	FY26	3Y CAGR	4Y CAGR
Revenue	—	₹23 Cr	₹2 Cr	₹1 Cr	₹19 Cr	-5.7%	-5.7%
EBITDA	—	-₹7 Cr	-₹1 Cr	-₹1 Cr	₹6 Cr	—	—
EBITDA Margin	—	-29.6%	-62.2%	-97.8%	30.8%	—	—
PAT (Net Profit)	—	-₹17 Cr	-₹9 Cr	-₹6 Cr	₹0 Cr	—	—
EPS	—	₹-103.69	₹-55.58	₹-4.11	₹0.19	—	—
Total Debt	₹234 Cr	₹236 Cr	₹236 Cr	—	₹60 Cr	-36.7%	-28.9%
Free Cash Flow	-₹1 Cr	₹1 Cr	₹5 Cr	—	-₹23 Cr	—	—

🔴 Revenue has shrunk at 5.7% a year over 3 years.

🟢 EBITDA has turned positive, from -₹7 Cr to ₹6 Cr.

🟢 EBITDA Margin has risen from -29.6% to 30.8% over 3 years (+60.5 pts).

🟢 PAT (Net Profit) has turned positive, from -₹17 Cr to ₹0 Cr.

🟢 EPS has turned positive, from ₹-103.69 to ₹0.19.

🟢 Total Debt has shrunk at 28.9% a year over 4 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹330 Cr

Total Liabilities

₹134 Cr

Cash & Equivalents

₹0 Cr

Operating Cash Flow

-₹15 Cr

Capex

-₹8 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

95.0%

Corporate Actions

Ex-Dividend Date

20 Nov 2018

Peer Comparison

Company	P/E	ROE
TATA STEEL LIMITED	19.8x	10.8%
JSW STEEL LIMITED	12.0x	24.7%
ULTRATECH CEMENT LIMITED	37.6x	11.1%
ASIAN PAINTS LIMITED	46.9x	22.3%

Recent News

2 mixed4 general

JTL Defence Board Approves Rights Issue To Raise Up To ₹2,460 Lakhs

Sahi, 14 Oct

JTL Defence replaces CS and CFO; approves ₹246 crore rights issue

scanx.trade, 14 Oct

JTL Defence (BSE:537254) - Stock Analysis

Simply Wall Street, 22 Feb

JTL Defence reports standalone net loss of Rs 2.67 crore in the June 2026 quarter

Business Standard, 29 JulResults

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

JTL Defence Secures 300 MT Volume in Q1 FY27 with 30% Job Work Contribution

Sahi, 02 JulResults

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

JTL Defence schedules board meet on Oct 14 to consider rights issue

scanx.trade, 10 Oct

Watch Items

Cross-check against the company's latest quarterly filing / investor presentation before acting.
RSI is in oversold territory — could mean either a bargain or a stock still falling for good reason. Check the 'why' before assuming reversal.

DalalBaazaar Thesis

MiddlingBusiness Quality · Financial Health

WeakGrowth · Profitability · Valuation · Risk

Points for each in the Score ↑

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

4 of 5 tripwires tripped — Debt / EBITDA falls below 3x; Free cash flow remains positive; Interest cover stays above 3x; ROCE stays above 8% · see Key things to watch ↑