Driven by negative shareholders' equity — the company owes more than it owns, short-term liabilities exceed short-term assets, negative free cash flow.
In simple words: The company owes more than it owns — years of losses have wiped out its net worth, but sales are shrinking. Solvency — whether it can keep funding itself at all — is the main factor to watch.
Decision support, not a buy or sell call.
As of 18 Oct 2026, 6:08 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.
The 60-second version of Nova Iron & Steel Limited — what it does, how it earns, and who it competes with, before any of the numbers below.
What does this company do?
Nova Iron & Steel Limited manufactures and trades in iron and steel products, and metals in India and internationally. The company provides sponge iron which is used in the manufacturing of steel products. It also engages in securities, and natural resources business.
IndustrySteel
SectorBasic Materials
Employees266
Annual revenue₹467 Cr
How does it make money?
Turns over ₹467 Cr a year. Of every ₹100 of sales, about ₹-3 reaches shareholders as profit, with ₹3 left at the operating level before interest, tax and depreciation. Each of its 266 employees supports ₹1.75 Cr of revenue a year, the signature of a capital- or asset-led business.
EBITDA margin2.7%
Net margin-3.4%
Revenue / employee₹1.75 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 1.8% 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.
ROCE1.8%
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 -32% while net margin moved +1209% 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-32%
Margin effect+1209%
DalalBaazaar Score
19/ 100
Poor
Weighted across six categories. Every point is explained below.
✗ Shareholders' equity is negative — accumulated losses exceed the capital in the business
Quality vs. Valuation
Company Quality
18/ 100
Weak
How good the business is, ignoring the share price entirely.
vs
Valuation
30/ 100
Expensive
What you are being asked to pay, ignoring how good the business is.
Weak on business quality and not cheap enough to compensate.
vs. its own history
Not enough price and earnings history
vs. sector peers
Not enough peers with a usable P/E
vs. generic bands
N/A
Multiples unreliable — equity base is negative
P/E (Trailing)
Not meaningful
P/B
—
EV/EBITDA
25.1x
PEG
—
Dividend Yield
None
What's Good / What's Bad
🟢 What's Going Well1
Debt is being paid down
Total debt is down 20% over 3 years.
🔴 What Needs Attention5
Margins are compressing
EBITDA margin has slipped from 4.3% to 2.7% over 3 years.
Free cash flow is negative
The business is not currently covering its capital spending from operations.
Receivables growing faster than sales
Receivables are up 1242% against revenue growth of -32% — customers are taking longer to pay.
Negative shareholders' equity
Liabilities exceed assets — this is a solvency question that sits above every other consideration here.
Short-term liquidity is tight
Current ratio of 0.29 — near-term obligations exceed near-term assets.
Red Flags
7 items require attention · 5 high · 2 watch
🔴Negative shareholders' equityFinancial
Liabilities exceed assets — accumulated losses have wiped out the company's net worth.
🔴Thin interest coverageFinancial
Operating profit covers interest only 0.2x — little room if earnings dip.
🔴Free cash flow negative for 3 yearsFinancial
The business has not covered its capital spending from operations for several years running, which has to be funded externally.
🔴The company is lossmakingFinancial
Net profit of -₹16 Cr in the latest reported year.
🔴Receivables growing faster than salesFinancial
Receivables up 1242% against revenue up -32% — sales are being booked faster than they are collected.
🟡Interest coverage is deterioratingFinancial
Cover has fallen from 13.6x to 0.2x.
🟡Short-term liquidity is tightFinancial
Current ratio of 0.29 — near-term obligations exceed near-term assets.
Investment Thesis
🟢 Bull CaseWhat could make this work?
Deleveraging frees up earnings
Debt is down 20% over 3 years. Every rupee of interest not paid drops to the bottom line, so profit can grow even if revenue does not.
🔴 Bear CaseWhat could go wrong?
Solvency comes before everything else
Liabilities exceed assets. Until net worth is rebuilt, the equity is a claim on a business that owes more than it owns, and further losses or a funding squeeze can leave shareholders with nothing.
Margins are being competed away
EBITDA margin has fallen from 4.3% to 2.7%. If the trend continues, profit falls even on flat sales — and margin decline rarely reverses quickly.
The debt load needs earnings to hold up
Debt is 21.3x EBITDA. At that level a downturn in earnings turns a manageable balance sheet into a refinancing problem, and lenders get paid before shareholders.
Sales are being booked faster than collected
Receivables are up 1242% against revenue up -32%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
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.
🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today
1EBITDA margin holds above 1%✓ 2.7%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Debt / EBITDA falls below 3x✗ 21.3x
Already stretched, so this is a reduction target rather than a level to hold. Around 3x is where lenders typically start attaching conditions.
3Free cash flow remains positive✗ -₹29 Cr
Profit that never becomes cash eventually stops being profit.
4Interest cover stays above 3x✗ 0.2x
How much operating profit can fall before interest stops being comfortably covered.
Investment Checklist
3 / 10 checks passed
✗ Shareholders' equity is positive (assets exceed liabilities)
✗ Strong return on capital employed (ROCE ≥ 15%)
✗ Healthy net margin (≥ 10%)
✗ Generates positive free cash flow
✗ 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
0 good · 4 neutral · 7 weak
Market Cap
₹49 Cr
Micro Cap
Smaller company — thin liquidity and deep drawdowns are normal here
P/E (Trailing)
Not meaningful
Loss-making
Earnings are negative, so a P/E multiple can't be read here
P/B Ratio
Not available
No data
Source didn't return this field
EPS (TTM)
₹-4.79
Loss-making
Negative earnings per share — the business is losing money
ROE
Not meaningful
Negative equity
Return on equity can't be read when equity itself is negative
ROCE
1.8%
Distorted
Distorted by the negative net worth — read this alongside the solvency flag, not on its own
Debt/Equity
Not meaningful
Negative equity
Shareholders' equity is negative, so this ratio can't be read
Revenue Growth (YoY)
-40.3%
Shrinking
Sales are contracting
Profit Growth (YoY)
-60.7%
Falling
Profits are shrinking
Dividend Yield
None
None
No dividend yield reported — usually means no payout, but verify if one was recently initiated
Free Cash Flow
-₹29 Cr
Cash burning
Spending more cash than the operations bring in
More Metrics
CMP
₹13.54
Operating Margin
-3.3%
Weak
Thin margins leave little room for error
Net Margin
-4.1%
Weak
Very little revenue reaches the bottom line
Current Ratio
0.29
Tight
Tight short-term liquidity
Beta (vs Nifty)
0.42
Defensive
Steadier than the market
52W Range Position
38%
Mid-range
Mid-range
Technical Snapshot
SMA 20 / SMA 50
13.5 / 13.0
Bullish alignment (short > long)
Price vs SMA 200
Above
Long-term uptrend
RSI (14)
43.7
Neutral momentum
Financial Trend (4-Year)
Metric
FY23
FY24
FY25
FY26
3Y CAGR
Revenue
₹686 Cr
₹537 Cr
₹417 Cr
₹467 Cr
-12.1%
EBITDA
₹29 Cr
₹8 Cr
₹12 Cr
₹12 Cr
-24.7%
EBITDA Margin
4.3%
1.4%
2.9%
2.7%
—
PAT (Net Profit)
-₹2 Cr
-₹94 Cr
₹149 Cr
-₹16 Cr
—
EPS
₹-0.5
₹-25.96
₹41.17
₹-4.42
—
ROCE
6.9%
-62.9%
103.1%
1.8%
—
Total Debt
₹332 Cr
₹398 Cr
₹248 Cr
₹265 Cr
-7.2%
Free Cash Flow
₹9 Cr
-₹47 Cr
-₹14 Cr
-₹29 Cr
—
🔴 Revenue has shrunk at 12.1% a year over 3 years.
🔴 EBITDA has shrunk at 24.7% a year over 3 years.
🔴 EBITDA Margin has fallen from 4.3% to 2.7% over 3 years (-1.6 pts).
🔴 ROCE has fallen from 6.9% to 1.8% over 3 years (-5.1 pts).
🟢 Total Debt has shrunk at 7.2% a year over 3 years.
🔴 Free Cash Flow has turned negative, from ₹9 Cr to -₹29 Cr.
🟡Mixed / dependsA results event. The figures on this page update once the new statements reach the data feed, which usually lags the announcement.
Watch Items
Revenue growth is negative (-40.3%) on the latest reported period — check if this is one-off or a trend.
Cross-check against the company's latest quarterly filing / investor presentation before acting.
1 metric couldn't be retrieved for this stock — this is more common for smaller or thinly-covered listings.
DalalBaazaar Thesis
🔴Business QualityWeak6/20
🔴Financial HealthStretched1/20
🔴GrowthWeak5/20
🔴ProfitabilityWeak1.5/15
🔴ValuationDemanding4.5/15
🔴RiskHigh0.5/10
Avoid until solvency is resolved
Nova Iron & Steel Limited owes more than it owns. Whatever the operating numbers show, the equity is a residual claim on a business with negative net worth, and that question has to be settled before any of the rest is worth weighing. 5 high-severity red flags sit above this conclusion and should be read first.
