Metal Coatings (India) Limited

Basic Materials — Steel · BSE

₹52.98−₹0.01 (−0.02%)

DalalBaazaar Score

42 / 100

🟡 Moderate

Verdict

CAUTION

Risk

High

Driven by high debt relative to equity, negative free cash flow, micro-cap size, which brings thin liquidity.

In simple words: The business is earning a fairly low return on the money invested in it, with modest growth. Debt is the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:01 pm

Understanding the Business

Company site ↗

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

What does this company do?

Metal Coatings (India) Limited manufactures and sells cold-rolled steel strips and hot-rolled pickled and oiled steel strips and coils in India.

IndustrySteel

SectorBasic Materials

Employees63

Annual revenue₹145 Cr

How does it make money?

Turns over ₹145 Cr a year. Of every ₹100 of sales, about ₹2 reaches shareholders as profit, with ₹2 left at the operating level before interest, tax and depreciation. Each of its 63 employees supports ₹2.29 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹2.29 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 7.1% 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 -12% while net margin moved -1% 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-12%

Margin effect-1%

DalalBaazaar Score

42/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ Revenue has contracted at 4.3% a year
✗ Profit has declined at 4.6% a year

Quality vs. Valuation

Company Quality

33/ 100

Weak

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

Valuation

73/ 100

Cheap

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

Optically cheap, but the underlying business scores poorly. Cheap-and-weak is what a value trap looks like from the outside — the low price may be deserved.

Historical Valuation

Current P/E

15.1x

3Y Median

21.6x

40 monthly readings · mean 21.3x · range 14.2x–26.7x

Sector Median

18.2x

median of 4 sector peers

🟢Current valuation is approximately 30% below its 3y median of 21.6x. Cheaper than its own history, which is worth a reason too: the market may be pricing in something the backward-looking numbers do not show.

🟢Against its sector it trades 17% below the peer median of 18.2x.

vs. its own history

Cheap

21.6x median over 40 months · -30%

vs. sector peers

Fair

18.2x median of 4 peers · -17%

vs. generic bands

Fair

15x–35x

EV/EBITDA

12.9x

PEG

0.57

What's Good / What's Bad

🟢 What's Going Well1

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

🔴 What Needs Attention1

Return on capital is falling
ROCE has declined from 9.4% to 7.1% — often a sign of competition or overexpansion.

Red Flags

4 items require attention · 3 high · 1 watch

🔴High leverageFinancial
Debt/Equity of 8.01x — earnings must service borrowings before shareholders see anything.
🔴Profit up while operating cash flow fallsFinancial
Reported profit rose but cash generated by operations declined — worth checking whether earnings are being supported by non-cash items or working capital.
🔴Inventory building faster than salesFinancial
Inventory up 59% against revenue up -12% — stock may not be moving.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹1 Cr in the latest year.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Priced below its own history
The stock trades 30% below its own median multiple. If the business performs as it has and simply re-rates back to normal, that gap is return on its own.
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?

Leverage amplifies any setback
Debt/Equity of 8.01x. Interest is payable whether or not the business has a good year.
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 0%✓ 2.3%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Free cash flow remains positive✗ -₹1 Cr
Profit that never becomes cash eventually stops being profit.
3Debt / EBITDA stays below 2x✓ 1.1x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
4ROCE stays above 8%✗ 7.1%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.
5Valuation vs its own median of 21.6x✓ 15.1x 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

3 good · 4 neutral · 4 weak

Market Cap

₹39 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

15.1x

Fair

Fairly valued against the generic band

P/B Ratio

0.88x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹3.5

Profitable

Profitable on a per-share basis

ROE

5.5%

Weak

Weak capital efficiency

ROCE

7.1%

Weak

Low return on total capital employed

Debt/Equity

8.01x

High

High leverage

Revenue Growth (YoY)

9.2%

Modest

Modest growth

Profit Growth (YoY)

26.5%

Healthy

Profits growing at a healthy clip

Dividend Yield

1.89%

Modest

Small cash return — most of the return has to come from the price

Free Cash Flow

-₹1 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

Operating Margin

1.6%

Weak

Thin margins leave little room for error

Net Margin

1.7%

Weak

Very little revenue reaches the bottom line

Current Ratio

4.49

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.14

Defensive

Steadier than the market

52W Range Position

28%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

51.0 / 52.0

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

60.5

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹165 Cr	₹164 Cr	₹155 Cr	₹145 Cr	-4.3%
EBITDA	₹4 Cr	₹3 Cr	₹6 Cr	₹3 Cr	-6.7%
EBITDA Margin	2.4%	2.1%	3.7%	2.3%	—
PAT (Net Profit)	₹3 Cr	₹2 Cr	₹2 Cr	₹2 Cr	-4.6%
EPS	₹3.77	₹3.41	₹3.23	₹3.28	-4.5%
ROE	7.5%	6.3%	5.6%	5.5%	—
ROCE	9.4%	7.9%	12.5%	7.1%	—
Total Debt	—	₹2 Cr	₹2 Cr	₹4 Cr	—
Free Cash Flow	₹10 Cr	₹2 Cr	₹5 Cr	-₹1 Cr	—

🔴 Revenue has shrunk at 4.3% a year over 3 years.

🔴 EBITDA has shrunk at 6.7% a year over 3 years.

🟡 EBITDA Margin has held roughly flat at 2.3% over 3 years.

🔴 PAT (Net Profit) has shrunk at 4.6% a year over 3 years.

🔴 EPS has shrunk at 4.5% a year over 3 years.

🔴 ROE has fallen from 7.5% to 5.5% over 3 years (-2.0 pts).

🔴 ROCE has fallen from 9.4% to 7.1% over 3 years (-2.3 pts).

🔴 Free Cash Flow has turned negative, from ₹10 Cr to -₹1 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹56 Cr

Total Liabilities

₹12 Cr

Cash & Equivalents

₹0 Cr

Operating Cash Flow

-₹1 Cr

Capex

-₹0 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

83.5%

Corporate Actions

Dividend Rate

₹1

Ex-Dividend Date

13 Aug 2026

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

2 mixed4 general

AZZ Inc raises FY27 outlook after record Q2 sales and EPS beat

scanx.trade, 17 OctResults

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

Coil Coatings Market Size, Share | Industry Report [2026-2034]

Fortune Business Insights, 28 Sept

Why Is Manaksia Coated Metals and Industries Share Price Falling Key Reasons 2026

Univest, 16 JunPrice move

🟡Mixed / dependsA price move rather than a change in the business. If the figures on this page have not moved, the fall is either an opportunity or news they have yet to catch up with.

High-Solids Acrylic Polyol Resins for Low-VOC Industrial Coatings Market

Future Market Insights, 17 Apr

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

Equitymaster, 02 Oct

AZZ (NYSE:AZZ) Stock Price

Simply Wall Street, 08 Oct

Watch Items

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

DalalBaazaar Thesis

StrongValuation

MiddlingFinancial Health · Risk

WeakBusiness Quality · Growth · Profitability

Points for each in the Score ↑

Cheap, but for a reason

The low price is the whole case here, and the business underneath scores poorly. Cheap-and-weak is what a value trap looks like from the outside — it needs a specific reason the numbers are about to improve, not just the observation that they are low. 3 high-severity red flags sit above this conclusion and should be read first.

2 of 5 tripwires tripped — Free cash flow remains positive; ROCE stays above 8% · see Key things to watch ↑