Narmadesh Brass Industries Limited

Industrials — Metal Fabrication · BSE

₹261.00+₹1.30 (+0.50%)

DalalBaazaar Score

50 / 100

🟡 Moderate

Verdict

NEUTRAL

Risk

Moderate

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, 7:47 pm

Understanding the Business

Company site ↗

The 60-second version of Narmadesh Brass Industries Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Narmadesh Brass Industries Limited manufactures and sells ferrous and non-ferrous metal components in India.

IndustryMetal Fabrication

SectorIndustrials

Employees119

Annual revenue₹95 Cr

How does it make money?

Turns over ₹95 Cr a year. Of every ₹100 of sales, about ₹4 reaches shareholders as profit, with ₹7 left at the operating level before interest, tax and depreciation. Each of its 119 employees supports ₹80.0 lakh of revenue a year, the signature of a people-led business.

Revenue / employee₹80.0 lakh

Who are its competitors?

The closest listed comparisons in its industry are TATA STEEL LIMITED, JSW STEEL LIMITED, HINDALCO INDUSTRIES LTD, VEDANTA LIMITED. 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 9.8% 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 ROE18.7%

What has been driving growth?

Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved +59% while net margin moved +150% 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+59%

Margin effect+150%

DalalBaazaar Score

50/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ Micro Cap: thinner liquidity and sharper drawdowns are normal
✗ Profits have swung sharply from year to year — earnings are hard to forecast
✗ Negative free cash flow means dependence on external funding

Quality vs. Valuation

Company Quality

51/ 100

Average

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

Valuation

55/ 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

23.0x

Sector Median

12.2x

median of 4 sector peers

⚠️Against its sector it trades 89% above the peer median of 12.2x.

vs. its own history

Not enough price and earnings history

vs. sector peers

Expensive

12.2x median of 4 peers · +89%

vs. generic bands

Fair

15x–35x

EV/EBITDA

13.9x

PEG

0.39

What's Good / What's Bad

🟢 What's Going Well3

Margins are improving
EBITDA margin is up from 3.5% to 6.9% over 3 years.
Very low debt
Debt/Equity of 0.20x 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 10.8% to 6.7% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 16.6% to 9.8% — often a sign of competition or overexpansion.

Red Flags

5 items require attention · 3 high · 2 watch

🔴Debt has risen sharplyFinancial
Total debt is up 82% over 3 years, from ₹6 Cr to ₹11 Cr.
🔴Receivables growing faster than salesFinancial
Receivables up 449% against revenue up 59% — sales are being booked faster than they are collected.
🔴Inventory building faster than salesFinancial
Inventory up 210% against revenue up 59% — stock may not be moving.
🟡Interest coverage is deterioratingFinancial
Cover has fallen from 5.9x to 3.6x.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹19 Cr in the latest year.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Margin expansion has further to run
EBITDA margin has risen from 3.5% to 6.9%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
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?

Sales are being booked faster than collected
Receivables are up 449% against revenue up 59%. 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 89% above the peer median. That premium needs a reason that persists, or it closes.
Returns on shareholder capital are falling
ROE has dropped from 10.8% to 6.7%. 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

1Revenue growth stays above 13% a year✓ 16.7% CAGR
Latest reported year was 8.5%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 5%✓ 6.9%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Free cash flow remains positive✗ -₹19 Cr
Profit that never becomes cash eventually stops being profit.
4Interest cover stays above 3x✓ 3.6x
How much operating profit can fall before interest stops being comfortably covered.
5Debt / EBITDA stays below 2x✓ 1.6x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.

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

2 good · 7 neutral · 2 weak

Market Cap

₹81 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

23.0x

Fair

Fairly valued against the generic band

P/B Ratio

1.52x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹11.37

Profitable

Profitable on a per-share basis

ROE

11.2%

Moderate

Moderate capital efficiency

ROCE

9.8%

Moderate

Moderate return on the capital in the business

Debt/Equity

0.20x

Low

Conservative leverage

Revenue Growth (YoY)

8.5%

Modest

Modest growth

Profit Growth (YoY)

-29.9%

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

-₹19 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

ROA

3.7%

Average

Average asset productivity

Operating Margin

-2.8%

Weak

Thin margins leave little room for error

Net Margin

3.7%

Average

Average bottom-line conversion

Current Ratio

3.13

Comfortable

Healthy short-term liquidity

52W Range Position

37%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

301.4 / 313.1

Bearish alignment (short < long)

RSI (14)

1.8

Oversold zone

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹60 Cr	₹79 Cr	₹88 Cr	₹95 Cr	+16.7%
EBITDA	₹2 Cr	₹11 Cr	₹9 Cr	₹7 Cr	+46.2%
EBITDA Margin	3.5%	14.1%	10.6%	6.9%	—
PAT (Net Profit)	₹1 Cr	₹7 Cr	₹5 Cr	₹4 Cr	+58.4%
EPS	₹2.88	₹22.88	₹16.34	—	—
ROE	10.8%	79.1%	49.4%	6.7%	—
ROCE	16.6%	66.1%	49.5%	9.8%	—
Total Debt	₹6 Cr	₹23 Cr	₹29 Cr	₹11 Cr	+22.0%
Free Cash Flow	-₹5 Cr	-₹12 Cr	₹1 Cr	-₹19 Cr	—

🟢 Revenue has grown at 16.7% a year over 3 years.

🟢 EBITDA has grown at 46.2% a year over 3 years.

🟢 EBITDA Margin has risen from 3.5% to 6.9% over 3 years (+3.4 pts).

🟢 PAT (Net Profit) has grown at 58.4% a year over 3 years.

🔴 ROE has fallen from 10.8% to 6.7% over 3 years (-4.1 pts).

🔴 ROCE has fallen from 16.6% to 9.8% over 3 years (-6.8 pts).

🔴 Total Debt has grown at 22.0% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹76 Cr

Total Liabilities

₹23 Cr

Cash & Equivalents

₹0 Cr

Operating Cash Flow

-₹14 Cr

Capex

-₹5 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

78.9%

Peer Comparison

Company	P/E	ROE
TATA STEEL LIMITED	19.8x	10.8%
JSW STEEL LIMITED	12.0x	24.7%
HINDALCO INDUSTRIES LTD	12.3x	12.0%
VEDANTA LIMITED	10.4x	18.7%

Recent News

6 general

Narmadesh Brass Industries IPO opens today. Check GMP, price band, subscription and other details

The Economic Times, 12 Jan

Narmadesh Brass Industries IPO: Dates, GMP, Price & Details

IndiaIPO, 12 Jan

Narmadesh Brass shares to debut today on BSE SME platform. Check GMP and other detaills

The Economic Times, 21 Jan

Upcoming IPOs: Amagi Media Labs IPO, five SME public issues to open for subscription next week — Check full list here

Livemint, 11 Jan

Upcoming IPOs: Shadowfax Technologies IPO to Bharat Coking Coal IPO — 4 new issues, 7 listings scheduled for next week

Livemint, 18 Jan

GALAGEX Stock Price and Chart — BSE:GALAGEX

TradingView, 13 Aug

Watch Items

Cross-check against the company's latest quarterly filing / investor presentation before acting.
RSI is in oversold territory — could mean either a bargain or a stock still falling for good reason. Check the 'why' before assuming reversal.

DalalBaazaar Thesis

StrongGrowth

MiddlingFinancial Health · Valuation

WeakBusiness Quality · Profitability · Risk

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. 3 high-severity red flags sit above this conclusion and should be read first.

1 of 5 tripwires tripped — Free cash flow remains positive · see Key things to watch ↑