Mittal Sections Limited

Basic Materials — Steel · BSE

₹25.50−₹1.57 (−5.80%)

DalalBaazaar Score

50 / 100

🟡 Moderate

Verdict

NEUTRAL

Risk

High

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

In simple words: Reasonable but unspectacular business quality, though profits are falling even as sales grow. Cash generation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:07 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 Mittal Sections Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Mittal Sections Limited manufactures and distributes mild steel selections and structural steel products. Its products include Mild Steel Flat Bars, Mild Steel Round Bars, Mild Steel Angles, and Channels.

IndustrySteel

SectorBasic Materials

Employees40

Annual revenue₹149 Cr

How does it make money?

Turns over ₹149 Cr a year. Of every ₹100 of sales, about ₹2 reaches shareholders as profit, with ₹6 left at the operating level before interest, tax and depreciation. Each of its 40 employees supports ₹3.71 Cr of revenue a year, the signature of a capital- or asset-led business.

EBITDA margin5.6%

Net margin2.3%

Revenue / employee₹3.71 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.

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?Little sign of one

Returns on capital of 10.1% 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.

ROCE10.1%

ROE10.1%

Peer median ROE10.8%

What has been driving growth?

Sales and margins have both contributed to where profit is now. Over 1 years revenue moved +9% while net margin moved -7% 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+9%

Margin effect-7%

DalalBaazaar Score

50/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ Micro Cap: thinner liquidity and sharper drawdowns are normal
✗ Negative free cash flow means dependence on external funding

Quality vs. Valuation

Company Quality

46/ 100

Average

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

Valuation

77/ 100

Cheap

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

7.1x

1.2Y Median

10.4x

14 monthly readings · mean 11.0x · range 7.6x–17.8x

Sector Median

18.2x

median of 4 sector peers

🟢Current valuation is approximately 32% below its 1.2y median of 10.4x. 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 61% below the peer median of 18.2x.

vs. its own history

Cheap

10.4x median over 14 months · -32%

vs. sector peers

Cheap

18.2x median of 4 peers · -61%

vs. generic bands

Cheap

Below 15x

P/E (Trailing)

7.1x

P/B

0.51x

EV/EBITDA

6.2x

PEG

14.12

Dividend Yield

None

What's Good / What's Bad

🟢 What's Going Well1

Valuation below its historical average
At 7.1x the stock trades 32% below its own median of 10.4x.

🔴 What Needs Attention4

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 33.8% to 6.0% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 29.2% to 10.1% — often a sign of competition or overexpansion.
Receivables growing faster than sales
Receivables are up 80% against revenue growth of 9% — customers are taking longer to pay.

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.
🔴Receivables growing faster than salesFinancial
Receivables up 80% against revenue up 9% — sales are being booked faster than they are collected.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹23 Cr in the latest year.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Priced below its own history
The stock trades 32% 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.
Cheaper than its peers
It trades 61% below the sector median. Either the market sees a problem the numbers do not show, or the discount closes.

🔴 Bear CaseWhat could go wrong?

Sales are being booked faster than collected
Receivables are up 80% against revenue up 9%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
Returns on shareholder capital are falling
ROE has dropped from 33.8% to 6.0%. 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
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 4%✓ 5.6%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Debt / EBITDA stays below 2x✗ 3.0x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
3Free cash flow remains positive✗ -₹23 Cr
Profit that never becomes cash eventually stops being profit.
4Interest cover stays above 3x✓ 3.3x
How much operating profit can fall before interest stops being comfortably covered.
5Revenue growth stays above 6% a year✓ 8.6% CAGR
Latest reported year was 14.5%. The bar is set below the established compounding rate, so ordinary variation does not trip it.

Investment Checklist

6 / 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

5 good · 4 neutral · 2 weak

Market Cap

₹29 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

7.1x

Cheap

Cheap against the generic band

P/B Ratio

0.51x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹3.61

Profitable

Profitable on a per-share basis

ROE

10.1%

Moderate

Moderate capital efficiency

ROCE

10.1%

Moderate

Moderate return on the capital in the business

Debt/Equity

0.43x

Low

Conservative leverage

Revenue Growth (YoY)

14.5%

Healthy

Healthy top-line growth

Profit Growth (YoY)

-23.9%

Falling

Profits are shrinking

Dividend Yield

None

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

Free Cash Flow

-₹25 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

CMP

₹25.5

ROA

5.7%

Average

Average asset productivity

Operating Margin

2.8%

Weak

Thin margins leave little room for error

Net Margin

2.3%

Weak

Very little revenue reaches the bottom line

Current Ratio

1.45

Comfortable

Healthy short-term liquidity

52W Range Position

Near low

Near its 52-week low

Technical Snapshot

SMA 20 / SMA 50

26.8 / 26.3

Bullish alignment (short > long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

39.9

Neutral momentum

Financial Trend (2-Year)

Metric	FY25	FY26	1Y CAGR
Revenue	₹137 Cr	₹149 Cr	+8.6%
EBITDA	₹8 Cr	₹8 Cr	+9.4%
EBITDA Margin	5.6%	5.6%	—
PAT (Net Profit)	₹3 Cr	₹3 Cr	+0.5%
ROE	33.8%	6.0%	—
ROCE	29.2%	10.1%	—
Free Cash Flow	-₹5 Cr	-₹23 Cr	—

🟢 Revenue has grown at 8.6% a year over 1 years.

🟢 EBITDA has grown at 9.4% a year over 1 years.

🟡 EBITDA Margin has held roughly flat at 5.6% over 1 years.

🟡 PAT (Net Profit) has been broadly flat over 1 years (0.5% a year).

🔴 ROE has fallen from 33.8% to 6.0% over 1 years (-27.9 pts).

🔴 ROCE has fallen from 29.2% to 10.1% over 1 years (-19.2 pts).

Balance Sheet & Cash Flow — FY2026

Total Assets

₹99 Cr

Total Liabilities

₹41 Cr

Total Debt

₹25 Cr

Cash & Equivalents

₹3 Cr

Operating Cash Flow

-₹6 Cr

Capex

-₹16 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

69.2%

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

Mittal Sections Submits Resignation Letter to BSE After Documentation Oversight

scanx.trade, 04 Oct

Mittal Sections Ltd Key Financial Ratios – Valuation, Profitability & More

Value Research, 30 Aug

ArcelorMittal S.A. (MT) Stock Price, News, Quote & History

Yahoo! Finance Canada, 17 Oct

Sunil Mittal gets highest French civilian award

The Economic Times, 12 Oct

Eutelsat OneWeb awaiting govt nod: Bharti Enterprises chairman Sunil Mittal

Business Standard, 08 Oct

Mittal Sections passes all resolutions at 17th AGM with promoter support

scanx.trade, 18 Sept

Watch Items

Trading very close to its 52-week low — worth checking whether this reflects a temporary setback or a structural problem.
Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

🔴Business QualityWeak7.5/20

🟡Financial HealthAdequate11.7/20

🟡GrowthModest9.3/20

🔴ProfitabilityWeak6/15

🟢ValuationAttractive13.2/15

🔴RiskHigh2.4/10

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.

This thesis breaks if

✓EBITDA margin holds above 4%5.6%
✗Debt / EBITDA stays below 2x3.0x
✗Free cash flow remains positive-₹23 Cr
✓Interest cover stays above 3x3.3x
✓Revenue growth stays above 6% a year8.6% CAGR