MSP Steel & Power Limited

Basic Materials — Steel · NSE

₹31.42+₹0.07 (+0.22%)

DalalBaazaar Score

48 / 100

🟡 Moderate

Verdict

CAUTION

Risk

High

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 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, 6:07 pm

Caution warranted. Multiple fundamental metrics — flagged in red below — point to either valuation stretch, leverage risk, or weakening profitability. This doesn't mean avoid the stock outright, but it does mean the burden of proof is on the growth story to justify the current price.

Understanding the Business

Company site ↗

The 60-second version of MSP Steel & Power Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

MSP Steel & Power Limited, together with its subsidiaries, engages in the manufacturing and trading of iron and steel products in India and internationally.

IndustrySteel

SectorBasic Materials

Employees1,250

Annual revenue₹2,818 Cr

How does it make money?

Turns over ₹2,818 Cr a year. Of every ₹100 of sales, about ₹1 reaches shareholders as profit, with ₹6 left at the operating level before interest, tax and depreciation. Each of its 1,250 employees supports ₹2.25 Cr of revenue a year, the signature of a capital- or asset-led business.

EBITDA margin5.9%

Net margin1.2%

Revenue / employee₹2.25 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 1.0% 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.

ROCE1.0%

ROE3.3%

Peer median ROE10.8%

What has been driving growth?

Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved +11% while net margin moved -160% 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+11%

Margin effect-160%

DalalBaazaar Score

48/ 100

Moderate

Weighted across six categories. Every point is explained below.

• Beta of 0.91 — moves roughly with the market
✗ Micro Cap: thinner liquidity and sharper drawdowns are normal
✗ Profits have swung sharply from year to year — earnings are hard to forecast

Quality vs. Valuation

Company Quality

48/ 100

Average

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

Valuation

51/ 100

Fair

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

55.1x

2Y Median

100.9x

28 monthly readings · mean 97.4x · range 56.1x–159.3x

Sector Median

18.2x

median of 4 sector peers

🟢Current valuation is approximately 45% below its 2y median of 100.9x. 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 203% above the peer median of 18.2x.

vs. its own history

Cheap

100.9x median over 28 months · -45%

vs. sector peers

Expensive

18.2x median of 4 peers · +203%

vs. generic bands

Expensive

Above 35x

P/E (Trailing)

55.1x

P/B

1.73x

EV/EBITDA

8.6x

PEG

2.37

Dividend Yield

None

What's Good / What's Bad

🟢 What's Going Well5

Margins are improving
EBITDA margin is up from 2.6% to 5.9% over 3 years.
Debt is being paid down
Total debt is down 60% over 3 years.
Cash generation is improving
Free cash flow is up 177% over 3 years.
Return on equity is rising
ROE has improved from -8.9% to 3.3%.
Valuation below its historical average
At 55.1x the stock trades 45% below its own median of 100.9x.

🔴 What Needs Attention0

Nothing stands out as clearly deteriorating on the years of data available.

Red Flags

4 items require attention · 2 high · 2 watch

🔴Thin interest coverageFinancial
Operating profit covers interest only 0.3x — little room if earnings dip.
🔴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.
🟡Interest coverage is deterioratingFinancial
Cover has fallen from 1.1x to 0.3x.
🟡Shareholders have been dilutedOwnership
Shares outstanding are up 47% over 3 years — each existing share owns a smaller slice of the company.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Margin expansion has further to run
EBITDA margin has risen from 2.6% to 5.9%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
Deleveraging frees up earnings
Debt is down 60% over 3 years. Every rupee of interest not paid drops to the bottom line, so profit can grow even if revenue does not.
Priced below its own history
The stock trades 45% 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.
Self-funding with balance-sheet headroom
Positive free cash flow of ₹89 Cr alongside low debt means growth, buybacks or dividends need no outside money — and a downturn can be absorbed rather than refinanced.

🔴 Bear CaseWhat could go wrong?

A premium to the sector to defend
It trades 203% above the peer median. That premium needs a reason that persists, or it closes.
Growth barely outpaces inflation
Revenue compounding at 3.6% a year is close to the rate prices rise, so the business is gaining little ground in real terms. That leaves the share price dependent on a re-rating rather than on earnings growth.
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 4%✓ 5.9%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Interest cover stays above 3x✗ 0.3x
How much operating profit can fall before interest stops being comfortably covered.
3Revenue growth stays above 4% a year✗ 3.6% CAGR
Latest reported year was 16.3%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
4Free cash flow remains positive✓ ₹89 Cr
Profit that never becomes cash eventually stops being profit.
5Debt / EBITDA stays below 2x✓ 1.9x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.

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 · 3 neutral · 3 weak

Market Cap

₹1,117 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

55.1x

Expensive

Expensive — verify against sector peers

P/B Ratio

1.73x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹0.57

Profitable

Profitable on a per-share basis

ROE

3.3%

Weak

Weak capital efficiency

ROCE

1.0%

Weak

Low return on total capital employed

Debt/Equity

0.31x

Low

Conservative leverage

Revenue Growth (YoY)

16.3%

Healthy

Healthy top-line growth

Profit Growth (YoY)

23.3%

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

₹89 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

CMP

₹31.42

P/E (Forward)

-1.8x

Improving

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

Operating Margin

4.6%

Weak

Thin margins leave little room for error

Net Margin

1.3%

Weak

Very little revenue reaches the bottom line

Current Ratio

1.17

Adequate

Adequate, but no real cushion

Beta (vs Nifty)

0.91

Market-like

Moves roughly in line with the market

52W Range Position

26%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

32.4 / 33.8

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

36.5

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹2,534 Cr	₹2,855 Cr	₹2,882 Cr	₹2,818 Cr	+3.6%
EBITDA	₹66 Cr	₹152 Cr	₹103 Cr	₹167 Cr	+36.2%
EBITDA Margin	2.6%	5.3%	3.6%	5.9%	—
PAT (Net Profit)	-₹51 Cr	₹14 Cr	-₹28 Cr	₹34 Cr	—
EPS	₹-1.31	₹0.34	₹-0.62	₹0.56	—
ROE	-8.9%	2.5%	-2.9%	3.3%	—
ROCE	1.1%	9.1%	4.9%	1.0%	—
Total Debt	₹801 Cr	₹781 Cr	₹262 Cr	₹321 Cr	-26.3%
Free Cash Flow	₹32 Cr	₹125 Cr	₹157 Cr	₹89 Cr	+40.4%

🟢 Revenue has grown at 3.6% a year over 3 years.

🟢 EBITDA has grown at 36.2% a year over 3 years.

🟢 EBITDA Margin has risen from 2.6% to 5.9% over 3 years (+3.3 pts).

🟢 PAT (Net Profit) has turned positive, from -₹51 Cr to ₹34 Cr.

🟢 EPS has turned positive, from ₹-1.31 to ₹0.56.

🟢 ROE has risen from -8.9% to 3.3% over 3 years (+12.2 pts).

🟡 ROCE has held roughly flat at 1.0% over 3 years.

🟢 Total Debt has shrunk at 26.3% a year over 3 years.

🟢 Free Cash Flow has grown at 40.4% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹1,728 Cr

Total Liabilities

₹697 Cr

Total Debt

₹321 Cr

Cash & Equivalents

₹4 Cr

Operating Cash Flow

₹148 Cr

Capex

-₹59 Cr

Shareholding (proxy)

Institutional Holding

2.2%

Insider Holding

76.5%

Corporate Actions

Ex-Dividend Date

14 Sept 2012

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

3 mixed1 negative2 general

MSP Steel & Power (NSE:MSPL) Is Posting Promising Earnings But The Good News Doesn’t Stop There

Simply Wall Street, 07 JunResults

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

MSP Steel & Power Reports Q1 Standalone Net Profit of 220M Rupees vs 178M

Sahi, 31 JulResults

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

Msp Steel & Power Stock Prediction 2026: Analyst Targets, Forecast and Key Levels

Univest, 23 JunAnalyst view

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

MSP Steel & Power exits debt restructuring, posts Q1FY27 profit of ₹22 crore

scanx.trade, 30 Sept

MSP Steel & Power Ltd. Peer Comparison – Compare with Others

Value Research, 30 Aug

MSP Steel & Power Ltd Downgraded to Strong Sell Amid Technical Weakness and Fundamental Concerns

MarketsMojo, 29 SeptAnalyst view

🔴Potentially negativeAn analyst opinion changing, which moves the price without changing the business.

Watch Items

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

DalalBaazaar Thesis

🔴Business QualityWeak7.5/20

🟢Financial HealthStrong13.7/20

🔴GrowthWeak7.6/20

🟡ProfitabilityModerate7.1/15

🟡ValuationFair8.3/15

🔴RiskHigh3.6/10

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%5.9%
✗Interest cover stays above 3x0.3x
✗Revenue growth stays above 4% a year3.6% CAGR
✓Free cash flow remains positive₹89 Cr
✓Debt / EBITDA stays below 2x1.9x