Kasturi Metal Composite Limited

Basic Materials — Steel · BSE

₹77.54−₹3.68 (−4.53%)

DalalBaazaar Score

62 / 100

🟢 Good

Verdict

REASONABLE

Risk

High

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

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, 6:06 pm

Mixed / neutral. No major red flags jump out, but nothing here screams "obviously cheap" either. This is a name that needs a peer comparison and a view on near-term earnings triggers before sizing a position.

Understanding the Business

Company site ↗

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

What does this company do?

Kasturi Metal Composite Limited manufactures and sells steel fiber and steel wool fibers for the infrastructure, industrial flooring, and engineered construction segments in India and internationally.

IndustrySteel

SectorBasic Materials

Employees94

Annual revenue₹64 Cr

How does it make money?

Turns over ₹64 Cr a year. Of every ₹100 of sales, about ₹6 reaches shareholders as profit, with ₹14 left at the operating level before interest, tax and depreciation. Each of its 94 employees supports ₹68.5 lakh of revenue a year, the signature of a people-led business.

EBITDA margin14.0%

Net margin6.1%

Revenue / employee₹68.5 lakh

Who are its competitors?

The closest listed comparisons in its industry are TATA STEEL LIMITED, JSW STEEL LIMITED, JINDAL STEEL LIMITED, STEEL AUTHORITY OF INDIA. These are the companies its valuation and returns are measured against elsewhere in this report.

TATA STEEL LIMITEDP/E 19.8x · ROE 10.8%

JSW STEEL LIMITEDP/E 12.0x · ROE 24.7%

JINDAL STEEL LIMITEDP/E 39.1x · ROE 5.3%

STEEL AUTHORITY OF INDIAP/E 16.5x · ROE 7.1%

What is its competitive advantage?Some evidence

ROCE of 19.5% is above what capital typically costs, which suggests some pricing power, though not yet the sustained, wide gap that marks a durable advantage.

ROCE19.5%

ROE15.9%

Peer median ROE10.8%

What has been driving growth?

Sales and margins have both contributed to where profit is now. Over 3 years revenue moved +73% while net margin moved +51% 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+73%

Margin effect+51%

DalalBaazaar Score

62/ 100

Good

Weighted across six categories. Every point is explained below.

✗ Micro Cap: thinner liquidity and sharper drawdowns are normal
✗ Profits have swung sharply from year to year — earnings are hard to forecast
✗ Negative free cash flow means dependence on external funding

Quality vs. Valuation

Company Quality

67/ 100

Good

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

Valuation

65/ 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

16.0x

Sector Median

18.2x

median of 4 sector peers

🟡Against its sector it is priced broadly in line with the peer median of 18.2x.

vs. its own history

Not enough price and earnings history

vs. sector peers

Fair

18.2x median of 4 peers · -12%

vs. generic bands

Fair

15x–35x

P/E (Trailing)

16.0x

P/B

2.18x

EV/EBITDA

9.8x

PEG

0.42

Dividend Yield

None

What's Good / What's Bad

🟢 What's Going Well2

Margins are improving
EBITDA margin is up from 11.2% to 14.0% over 3 years.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention5

Debt is rising
Total debt is up 43% 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 21.2% to 10.5% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 25.8% to 19.5% — often a sign of competition or overexpansion.
Inventory building faster than sales
Inventory is up 115% against revenue growth of 73% — stock may not be moving.

Red Flags

3 items require attention · 3 watch

🟡Debt is increasingFinancial
Total debt is up 43% over 3 years.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹10 Cr in the latest year.
🟡Inventory building faster than salesFinancial
Inventory up 115% against revenue up 73% — stock may not be moving.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Capital compounds at a high rate
ROCE of 19.5% 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 11.2% to 14.0%. 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?

Returns on shareholder capital are falling
ROE has dropped from 21.2% to 10.5%. 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.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1Revenue growth stays above 15% a year✓ 20.1% CAGR
Latest reported year was 28.5%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 12%✓ 14.0%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Free cash flow remains positive✗ -₹10 Cr
Profit that never becomes cash eventually stops being profit.
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%✓ 19.5%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

9 / 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

6 good · 4 neutral · 1 weak

Market Cap

₹81 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

16.0x

Fair

Fairly valued against the generic band

P/B Ratio

2.18x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹4.84

Profitable

Profitable on a per-share basis

ROE

15.9%

Strong

Strong capital efficiency

ROCE

19.5%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

0.41x

Low

Conservative leverage

Revenue Growth (YoY)

28.5%

Healthy

Healthy top-line growth

Profit Growth (YoY)

135.9%

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

-₹10 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

CMP

₹77.54

ROA

9.1%

Good

Assets are working hard

Operating Margin

8.8%

Average

Average margins

Net Margin

6.1%

Average

Average bottom-line conversion

Current Ratio

1.47

Comfortable

Healthy short-term liquidity

52W Range Position

76%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

67.5 / 59.1

Bullish alignment (short > long)

RSI (14)

60.4

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹37 Cr	₹50 Cr	₹57 Cr	₹64 Cr	+20.1%
EBITDA	₹4 Cr	₹6 Cr	₹6 Cr	₹9 Cr	+29.5%
EBITDA Margin	11.2%	11.6%	10.7%	14.0%	—
PAT (Net Profit)	₹1 Cr	₹2 Cr	₹2 Cr	₹4 Cr	+37.8%
EPS	₹1.44	₹2.24	₹1.59	₹4.84	+50.0%
ROE	21.2%	19.0%	9.3%	10.5%	—
ROCE	25.8%	28.5%	19.9%	19.5%	—
Total Debt	₹10 Cr	₹12 Cr	₹13 Cr	₹14 Cr	+12.7%
Free Cash Flow	-₹2 Cr	₹1 Cr	-₹0 Cr	-₹10 Cr	—

🟢 Revenue has grown at 20.1% a year over 3 years.

🟢 EBITDA has grown at 29.5% a year over 3 years.

🟢 EBITDA Margin has risen from 11.2% to 14.0% over 3 years (+2.8 pts).

🟢 PAT (Net Profit) has grown at 37.8% a year over 3 years.

🟢 EPS has grown at 50.0% a year over 3 years.

🔴 ROE has fallen from 21.2% to 10.5% over 3 years (-10.7 pts).

🔴 ROCE has fallen from 25.8% to 19.5% over 3 years (-6.4 pts).

🔴 Total Debt has grown at 12.7% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹60 Cr

Total Liabilities

₹26 Cr

Total Debt

₹14 Cr

Cash & Equivalents

₹7 Cr

Operating Cash Flow

₹4 Cr

Capex

-₹14 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

91.3%

Peer Comparison

Company	P/E	ROE
TATA STEEL LIMITED	19.8x	10.8%
JSW STEEL LIMITED	12.0x	24.7%
JINDAL STEEL LIMITED	39.1x	5.3%
STEEL AUTHORITY OF INDIA	16.5x	7.1%

Recent News

6 general

Compare with

Equitymaster, 17 Oct

KASTURI METAL COMPOSITE LIMITE Share Price

Upstox, 05 May

Compare ANKIT METAL with

Equitymaster, 16 Oct

Kasturi Metal Composite IPO: Date, Price Band, GMP & Review

IndiaIPO, 17 Jan

Kasturi Metal Composite appoints Ashish Sahani as company secretary

scanx.trade, 25 Aug

Kasturi Metal Composite IPO subscribed 16.6 times on final day, listing likely scheduled next week

Moneycontrol.com, 29 Jan

Watch Items

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

DalalBaazaar Thesis

🟡Business QualityAdequate10.3/20

🟢Financial HealthStrong13.2/20

🟢GrowthStrong18.5/20

🟡ProfitabilityModerate8.4/15

🟡ValuationFair9.3/15

🔴RiskHigh2.5/10

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.

This thesis breaks if

✓Revenue growth stays above 15% a year20.1% CAGR
✓EBITDA margin holds above 12%14.0%
✗Free cash flow remains positive-₹10 Cr
✓Debt / EBITDA stays below 2x1.6x
✓ROCE stays above 16%19.5%