Mishra Dhatu Nigam Limited

Basic Materials — Steel · NSE

₹420.00+₹1.95 (+0.47%)

DalalBaazaar Score

55 / 100

🟡 Moderate

Verdict

NEUTRAL

Risk

Low

Driven by small-cap size, which brings sharper price swings, a very high earnings multiple, which leaves little margin for disappointment.

In simple words: Reasonable but unspectacular business quality, with both sales and profits growing well. 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 Mishra Dhatu Nigam Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Mishra Dhatu Nigam Limited manufactures and sells super alloys, titanium, special purpose steel, and other special metals in India and internationally.

IndustrySteel

SectorBasic Materials

Employees760

Annual revenue₹1,182 Cr

How does it make money?

Turns over ₹1,182 Cr a year. Of every ₹100 of sales, about ₹11 reaches shareholders as profit, with ₹24 left at the operating level before interest, tax and depreciation. Each of its 760 employees supports ₹1.56 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹1.56 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 8.8% 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 is the outlook?

3 analysts covering the stock expect revenue to grow about 17.6% and earnings to grow about 27.9% in the year to 2028. These are estimates by people who follow the company, not a forecast for the wider industry.

Est. revenue growth+17.6%

Est. earnings growth+27.9%

Analysts3

What has been driving growth?

Sales and margins have both contributed to where profit is now. Over 3 years revenue moved +39% while net margin moved -40% 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+39%

Margin effect-40%

DalalBaazaar Score

55/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ P/E of 58.3x is demanding — it needs sustained high growth to justify
• P/E is close to its own historical median of 61.0x
✗ P/B of 5.13x is a steep premium to book

Quality vs. Valuation

Company Quality

59/ 100

Average

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

Valuation

35/ 100

Expensive

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

58.3x

3Y Median

61.0x

40 monthly readings · mean 61.7x · range 45.0x–88.8x

Sector Median

18.2x

median of 4 sector peers

🟡Currently trading close to its 3y median of 61.0x — the market is paying about what it usually pays for this company.

⚠️Against its sector it trades 220% above the peer median of 18.2x.

vs. its own history

Fair

61.0x median over 40 months · -5%

vs. sector peers

Expensive

18.2x median of 4 peers · +220%

vs. generic bands

Expensive

Above 35x

EV/EBITDA

29.0x

PEG

2.12

What's Good / What's Bad

🟢 What's Going Well4

Debt is being paid down
Total debt is down 17% 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 0.27x leaves the balance sheet with plenty of headroom.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention2

Return on equity is falling
ROE has dropped from 12.2% to 8.6% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 11.8% to 8.8% — often a sign of competition or overexpansion.

Red Flags

3 items require attention · 2 high · 1 watch

🔴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.
🔴Significant margin compressionFinancial
EBITDA margin has fallen 11.3 points, from 34.9% to 23.6%.
🟡Receivables growing faster than salesFinancial
Receivables up 76% against revenue up 39% — sales are being booked faster than they are collected.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Deleveraging frees up earnings
Debt is down 17% 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 ₹105 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 34.9% to 23.6%. If the trend continues, profit falls even on flat sales — and margin decline rarely reverses quickly.
Sales are being booked faster than collected
Receivables are up 76% against revenue up 39%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
A premium to the sector to defend
It trades 220% above the peer median. That premium needs a reason that persists, or it closes.
Returns on shareholder capital are falling
ROE has dropped from 12.2% to 8.6%. 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.
Size brings its own risk
Small 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 9% a year✓ 11.6% CAGR
Latest reported year was 40.5%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 22%✓ 23.6%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Free cash flow remains positive✓ ₹105 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 1.5x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 8%✓ 8.8%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

9 / 12 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
✓ Analyst consensus isn't majority-sell
✓ Short-term technical trend isn't bearish

Price history

Quick Metrics

5 good · 4 neutral · 2 weak

Market Cap

₹7,868 Cr

Small Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

58.3x

Expensive

Expensive — verify against sector peers

P/B Ratio

5.13x

Rich

Steep premium to book — needs high, durable returns to justify

EPS (TTM)

₹7.21

Profitable

Profitable on a per-share basis

ROE

8.6%

Moderate

Moderate capital efficiency

ROCE

8.8%

Moderate

Moderate return on the capital in the business

Debt/Equity

0.27x

Low

Conservative leverage

Revenue Growth (YoY)

40.5%

Healthy

Healthy top-line growth

Profit Growth (YoY)

27.5%

Healthy

Profits growing at a healthy clip

Dividend Yield

0.60%

Modest

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

Free Cash Flow

₹105 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

P/E (Forward)

34.0x

Improving

Below the trailing multiple — the street expects earnings to grow into the price

Operating Margin

8.4%

Average

Average margins

Net Margin

10.6%

Good

Strong bottom-line conversion

Current Ratio

2.52

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.66

Defensive

Steadier than the market

52W Range Position

71%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

428.8 / 427.5

Bullish alignment (short > long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

56.6

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹850 Cr	₹1,031 Cr	₹1,053 Cr	₹1,182 Cr	+11.6%
EBITDA	₹296 Cr	₹226 Cr	₹250 Cr	₹279 Cr	-2.0%
EBITDA Margin	34.9%	21.9%	23.8%	23.6%	—
PAT (Net Profit)	₹156 Cr	₹92 Cr	₹111 Cr	₹131 Cr	-5.6%
EPS	₹8.34	₹4.9	₹5.92	₹7.02	-5.6%
ROE	12.2%	7.0%	7.8%	8.6%	—
ROCE	11.8%	7.8%	8.4%	8.8%	—
Total Debt	₹489 Cr	₹433 Cr	₹350 Cr	₹407 Cr	-5.9%
Free Cash Flow	-₹108 Cr	₹136 Cr	₹149 Cr	₹105 Cr	—

🟢 Revenue has grown at 11.6% a year over 3 years.

🔴 EBITDA has shrunk at 2.0% a year over 3 years.

🔴 EBITDA Margin has fallen from 34.9% to 23.6% over 3 years (-11.3 pts).

🔴 PAT (Net Profit) has shrunk at 5.6% a year over 3 years.

🔴 EPS has shrunk at 5.6% a year over 3 years.

🔴 ROE has fallen from 12.2% to 8.6% over 3 years (-3.6 pts).

🔴 ROCE has fallen from 11.8% to 8.8% over 3 years (-3.0 pts).

🟢 Total Debt has shrunk at 5.9% a year over 3 years.

🟢 Free Cash Flow has turned positive, from -₹108 Cr to ₹105 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹3,221 Cr

Total Liabilities

₹1,689 Cr

Cash & Equivalents

₹192 Cr

Operating Cash Flow

₹155 Cr

Capex

-₹49 Cr

Shareholding (proxy)

Institutional Holding

7.8%

Insider Holding

74.0%

Corporate Actions

Dividend Rate

₹2.5

Ex-Dividend Date

23 Sept 2026

Analyst Consensus

Recommendations

3 Buy · 0 Hold · 0 Sell

Target Price (Mean)

₹495

+17.9% vs CMP

Target Range

₹475 – ₹510

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 positive4 mixed1 general

MIDHANI board approves FY26 results, recommends dividend

scanx.trade, 18 OctCapital return

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

Mishra Dhatu Nigam (NSEI:MIDHANI) Stock Forecast & Analyst Predictions

Simply Wall Street, 06 OctAnalyst view

🟡Mixed / dependsBroker commentary — an opinion about the price rather than new information about the business.

MIDHANI Forecast — Price Target — Prediction for 2027

TradingView, 25 JunAnalyst view

🟡Mixed / dependsBroker commentary — an opinion about the price rather than new information about the business.

Mishra Dhatu Nigam Share Price Target 2027: Base and Bull Case

Univest, 09 OctAnalyst view

🟡Mixed / dependsBroker commentary — an opinion about the price rather than new information about the business.

Compare with

Equitymaster, 15 Oct

Mishra Dhatu Nigam shares surge 12% to hit 52-week high on securing S400 approval from GE Aerospace

Upstox, 13 AugPrice move

🟡Mixed / dependsA price move, which is not by itself a change in the business. Worth finding the cause before reading it as either good or bad.

Watch Items

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

DalalBaazaar Thesis

StrongFinancial Health

MiddlingBusiness Quality · Profitability · Risk

WeakGrowth · Valuation

Points for each in the Score ↑

Unremarkable in both directions

A reasonable business at a reasonable price. Nothing here is alarming and nothing is compelling, which usually means the decision rests on things this data cannot see — the industry's direction, management's intent, and what else is available to you. 2 high-severity red flags sit above this conclusion and should be read first.

All 5 tripwires holding · see Key things to watch ↑