Lesha Industries Limited

Basic Materials — Steel · BSE

₹0.78+₹0.02 (+2.63%)

DalalBaazaar Score

40 / 100

🟡 Moderate

Verdict

CAUTION

Risk

Moderate

Driven by micro-cap size, which brings thin liquidity, a very high earnings multiple, which leaves little margin for disappointment.

In simple words: The business is earning a fairly low return on the money invested in it, with modest growth. Valuation 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 Lesha Industries Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Lesha Industries Limited trades in steel, chemicals, and other ancillary products in India. It operates through Steel Trading; Trading of Goods; Shares/Commodity Trading; and Others segments.

IndustrySteel

SectorBasic Materials

Employees2

Annual revenue₹5 Cr

How does it make money?

Turns over ₹5 Cr a year. Of every ₹100 of sales, about ₹3 reaches shareholders as profit, with ₹-4 left at the operating level before interest, tax and depreciation. Each of its 2 employees supports ₹2.37 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹2.37 Cr

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.

Compared side by side in Peers ↓

What is its competitive advantage?Little sign of one

Returns on capital of -0.3% 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 ROE10.8%

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 -31% while net margin moved +4% 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-31%

Margin effect+4%

DalalBaazaar Score

40/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ Revenue has contracted at 11.8% a year
✗ Profit has declined at 10.7% a year

Quality vs. Valuation

Company Quality

39/ 100

Weak

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

Valuation

31/ 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.

Historical Valuation

Current P/E

78.0x

3Y Median

49.0x

40 monthly readings · mean 120.1x · range 2.0x–368.4x

Sector Median

18.2x

median of 4 sector peers

⚠️Current valuation is approximately 59% above its 3y median of 49.0x. Paying more than usual needs a reason — faster growth, a better balance sheet, or a re-rating you believe in.

⚠️Against its sector it trades 329% above the peer median of 18.2x.

vs. its own history

Expensive

49.0x median over 40 months · +59%

vs. sector peers

Expensive

18.2x median of 4 peers · +329%

vs. generic bands

Expensive

Above 35x

EV/EBITDA

—

PEG

—

What's Good / What's Bad

🟢 What's Going Well4

Debt is being paid down
Total debt is down 46% 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 0.13x leaves the balance sheet with plenty of headroom.
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

5 items require attention · 2 high · 3 watch

🔴Thin interest coverageFinancial
Operating profit covers interest only -2025.0x — little room if earnings dip.
🔴Significant margin compressionFinancial
EBITDA margin has fallen 7.0 points, from 3.1% to -3.9%.
🟡Interest coverage is deterioratingFinancial
Cover has fallen from -912.0x to -2025.0x.
🟡Profit is decliningFinancial
Net profit is down 29% over 3 years.
🟡Shareholders have been dilutedOwnership
Shares outstanding are up 99% over 3 years — each existing share owns a smaller slice of the company.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Deleveraging frees up earnings
Debt is down 46% over 3 years. Every rupee of interest not paid drops to the bottom line, so profit can grow even if revenue does not.
Self-funding with balance-sheet headroom
Positive free cash flow of ₹6 Cr alongside low debt means growth, buybacks or dividends need no outside money — and a downturn can be absorbed rather than refinanced.
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 3.1% to -3.9%. If the trend continues, profit falls even on flat sales — and margin decline rarely reverses quickly.
The price already assumes success
The stock trades 59% above its own median multiple. At this level the business has to deliver just to stand still, and a stumble is repriced twice — lower earnings on a lower multiple.
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
2 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 -6%✓ -3.9%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Interest cover stays above 3x✗ -2025.0x
How much operating profit can fall before interest stops being comfortably covered.
3Free cash flow remains positive✓ ₹6 Cr
Profit that never becomes cash eventually stops being profit.
4ROCE stays above 8%✗ -0.3%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.
5Valuation vs its own median of 49.0x✗ 78.0x today
A re-rating above its own history needs a reason; without one it is just a higher price.

Investment Checklist

5 / 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

4 good · 4 neutral · 3 weak

Market Cap

₹22 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

78.0x

Expensive

Expensive — verify against sector peers

P/B Ratio

0.43x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹0.01

Profitable

Profitable on a per-share basis

ROE

0.2%

Weak

Weak capital efficiency

ROCE

-0.3%

Weak

Low return on total capital employed

Debt/Equity

0.13x

Low

Conservative leverage

Revenue Growth (YoY)

0.0%

Modest

Modest growth

Profit Growth (YoY)

0.0%

Modest

Slow profit growth

Dividend Yield

None

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

Free Cash Flow

₹6 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

Operating Margin

22.7%

Good

Healthy core-business profitability

Net Margin

2.8%

Weak

Very little revenue reaches the bottom line

Current Ratio

2.94

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.32

Defensive

Steadier than the market

52W Range Position

24%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

0.8 / 0.8

Bullish alignment (short > long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

43.5

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹7 Cr	₹12 Cr	₹12 Cr	₹5 Cr	-11.8%
EBITDA	₹0 Cr	-₹4 Cr	-₹0 Cr	-₹0 Cr	—
EBITDA Margin	3.1%	-33.8%	-0.3%	-3.9%	—
PAT (Net Profit)	₹0 Cr	₹7 Cr	₹0 Cr	₹0 Cr	-10.7%
EPS	₹0.01	₹0.52	₹0.02	₹0.01	-28.4%
ROE	1.1%	28.2%	0.6%	0.2%	—
ROCE	1.0%	6.2%	-0.1%	-0.3%	—
Total Debt	₹0 Cr	₹21 Cr	₹0 Cr	₹0 Cr	-18.4%
Free Cash Flow	-₹2 Cr	₹22 Cr	-₹39 Cr	₹6 Cr	—

🔴 Revenue has shrunk at 11.8% a year over 3 years.

🔴 EBITDA has turned negative, from ₹0 Cr to -₹0 Cr.

🔴 EBITDA Margin has fallen from 3.1% to -3.9% over 3 years (-7.0 pts).

🔴 PAT (Net Profit) has shrunk at 10.7% a year over 3 years.

🔴 EPS has shrunk at 28.4% a year over 3 years.

🟡 ROE has held roughly flat at 0.2% over 3 years.

🔴 ROCE has fallen from 1.0% to -0.3% over 3 years (-1.3 pts).

🟢 Total Debt has shrunk at 18.4% a year over 3 years.

🟢 Free Cash Flow has turned positive, from -₹2 Cr to ₹6 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹77 Cr

Total Liabilities

₹3 Cr

Cash & Equivalents

₹0 Cr

Operating Cash Flow

₹11 Cr

Capex

-₹5 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

41.7%

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

1 positive5 general

Compare with Lesha Industries

Equitymaster, 16 Oct

Lesha Industries confirms Sept 18 AGM, book closure dates

scanx.trade, 18 Aug

8 penny stocks surged up to 205% in 3 months. Do you own any?

The Economic Times, 12 Apr

Lesha Industries net profit rises 41% in Q1FY27 on other income

scanx.trade, 11 AugResults

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

Lesha Industries appoints Khimani & Co. as statutory auditor for five years

scanx.trade, 18 Sept

Lesha Industries Limited (533602) Leadership & Management Team Analysis

Simply Wall Street, 15 Nov

Watch Items

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

DalalBaazaar Thesis

StrongFinancial Health

WeakBusiness Quality · Growth · 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. 2 high-severity red flags sit above this conclusion and should be read first.

3 of 5 tripwires tripped — Interest cover stays above 3x; ROCE stays above 8%; Valuation vs its own median of 49.0x · see Key things to watch ↑