Modern Steels Limited

Financial Services — Shell Companies · BSE

₹14.28+₹0.72 (+5.31%)

DalalBaazaar Score

41 / 100

🟡 Moderate

Verdict

CAUTION

Risk

Moderate

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. Thin profit margins are the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:08 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 Modern Steels Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Modern Steels Limited engages in the steel manufacturing business in India. The company was incorporated in 1973 and is based in Chandigarh, India.

IndustryShell Companies

SectorFinancial Services

Who are its competitors?

The closest listed comparisons in its industry are BAJAJ FINANCE LIMITED, HDFC BANK LTD, ICICI BANK LTD., STATE BANK OF INDIA. These are the companies its valuation and returns are measured against elsewhere in this report.

BAJAJ FINANCE LIMITEDP/E 30.2x · ROE 17.8%

HDFC BANK LTDP/E 15.9x · ROE 13.8%

ICICI BANK LTD.P/E 18.1x · ROE 16.5%

STATE BANK OF INDIAP/E 10.3x · ROE 15.2%

What is its competitive advantage?Not assessable from these ratios

For a lender, returns on capital are shaped by leverage and funding cost rather than by pricing power, so the usual financial signature of an advantage does not apply. Judge this one on deposit franchise, cost of funds and asset quality — none of which are in this data.

ROCE-5.0%

ROE5.6%

Peer median ROE16.5%

DalalBaazaar Score

41/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ Profit has declined at 57.6% a year

Quality vs. Valuation

Company Quality

37/ 100

Weak

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

Valuation

50/ 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.

Historical Valuation

Current P/E

17.2x

3Y Median

5.0x

40 monthly readings · mean 16.9x · range 1.5x–56.0x

Sector Median

17.0x

median of 4 sector peers

⚠️Current valuation is approximately 241% above its 3y median of 5.0x. Paying more than usual needs a reason — faster growth, a better balance sheet, or a re-rating you believe in.

🟡Against its sector it is priced broadly in line with the peer median of 17.0x.

vs. its own history

Expensive

5.0x median over 40 months · +241%

vs. sector peers

Fair

17.0x median of 4 peers · +1%

vs. generic bands

Fair

15x–35x

P/E (Trailing)

17.2x

P/B

1.04x

EV/EBITDA

—

PEG

—

Dividend Yield

None

What's Good / What's Bad

🟢 What's Going Well1

Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention3

Return on equity is falling
ROE has dropped from 107.9% to 5.6% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 109.8% to -5.0% — often a sign of competition or overexpansion.
Valuation above its historical average
At 17.2x the stock trades 241% above its own median of 5.0x.

Red Flags

1 item require attention · 1 watch

🟡Profit is decliningFinancial
Net profit is down 92% 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?

The price already assumes success
The stock trades 241% 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.
Returns on shareholder capital are falling
ROE has dropped from 107.9% to 5.6%. 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

1Return on equity stays above 8%✗ 5.6%
For a lender this is the cleanest single read on whether the book is being grown profitably.
2Valuation vs its own median of 5.0x✗ 17.2x today
A re-rating above its own history needs a reason; without one it is just a higher price.

Investment Checklist

6 / 10 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)
✓ 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 · 5 neutral · 2 weak

Market Cap

₹20 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

17.2x

Fair

Fairly valued against the generic band

P/B Ratio

1.04x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹0.83

Profitable

Profitable on a per-share basis

ROE

5.6%

Weak

Weak capital efficiency

ROCE

-5.0%

Weak

Low return on total capital employed

Debt/Equity

1.11x

Moderate

Moderate leverage

Revenue Growth (YoY)

Not available

No data

Source didn't return this field

Profit Growth (YoY)

62.5%

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

₹0 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

CMP

₹14.28

Operating Margin

0.0%

Weak

Thin margins leave little room for error

Net Margin

0.0%

Weak

Very little revenue reaches the bottom line

Current Ratio

8.47

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

-0.04

Defensive

Steadier than the market

52W Range Position

51%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

14.4 / 13.9

Bullish alignment (short > long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

35.4

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
EBITDA	-₹0 Cr	-₹2 Cr	-₹5 Cr	-₹1 Cr	—
PAT (Net Profit)	₹14 Cr	₹1 Cr	₹4 Cr	₹1 Cr	-57.6%
EPS	₹10.05	₹0.41	₹3.23	₹0.77	-57.5%
ROE	107.9%	4.3%	24.9%	5.6%	—
ROCE	109.8%	-9.2%	-3.9%	-5.0%	—
Total Debt	₹1 Cr	₹0 Cr	₹0 Cr	₹0 Cr	-45.7%
Free Cash Flow	₹0 Cr	₹3 Cr	₹4 Cr	₹0 Cr	-25.3%

🔴 PAT (Net Profit) has shrunk at 57.6% a year over 3 years.

🔴 EPS has shrunk at 57.5% a year over 3 years.

🔴 ROE has fallen from 107.9% to 5.6% over 3 years (-102.3 pts).

🔴 ROCE has fallen from 109.8% to -5.0% over 3 years (-114.8 pts).

🟢 Total Debt has shrunk at 45.7% a year over 3 years.

🔴 Free Cash Flow has shrunk at 25.3% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹20 Cr

Total Liabilities

₹1 Cr

Total Debt

₹0 Cr

Cash & Equivalents

₹0 Cr

Operating Cash Flow

₹0 Cr

Capex

—

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

74.7%

Corporate Actions

Ex-Dividend Date

22 Aug 2007

Peer Comparison

Company	P/E	ROE
BAJAJ FINANCE LIMITED	30.2x	17.8%
HDFC BANK LTD	15.9x	13.8%
ICICI BANK LTD.	18.1x	16.5%
STATE BANK OF INDIA	10.3x	15.2%

Recent News

1 positive1 mixed4 general

Modern Steels Ltd. Shareholding Pattern – Promoters, FIIs & DIIs

Value Research, 30 Aug

Modern Steels AGM resolutions pass with over 99% votes in favour

scanx.trade, 26 Sept

Q2 Results Next Week, October 19-24: Infosys, Swiggy, Bajaj Finance, Adani Power & 100+ Companies To Announce

Goodreturns, 18 OctResults

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

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

Equitymaster, 02 Oct

Modern Steels sets Sept 26 AGM for board reappointments and auditor change

scanx.trade, 31 Aug

HAL board approves final dividend of ₹10 per share for FY26; check record date, share price details

Upstox, 29 JunCapital return

🟢Potentially positiveCash or shares returned to holders. A buyback is only good value if the shares were cheap when bought.

Watch Items

This is a financial-sector business: borrowing is its raw material, not leverage in the usual sense. Debt/Equity and ROCE here aren't comparable to a manufacturer's — read them alongside NIM, GNPA and capital adequacy from the company's own disclosures.
Cross-check against the company's latest quarterly filing / investor presentation before acting.
1 metric couldn't be retrieved for this stock — this is more common for smaller or thinly-covered listings.

DalalBaazaar Thesis

🔴Business QualityWeak4/20

🟢Financial HealthStrong17/20

🔴GrowthWeak2.4/20

🔴ProfitabilityWeak4.6/15

🟡ValuationFair8.7/15

🔴RiskHigh4.4/10

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.

This thesis breaks if

✗Return on equity stays above 8%5.6%
✗Valuation vs its own median of 5.0x17.2x today