Prakash Industries Limited

Basic Materials — Steel · NSE

₹126.85+₹9.54 (+8.13%)

DalalBaazaar Score

61 / 100

🟢 Good

Verdict

CAUTION

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, but sales are shrinking. Cash generation 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 Prakash Industries Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Prakash Industries Limited manufactures and sells steel products in India.

IndustrySteel

SectorBasic Materials

Employees2,708

Annual revenue₹3,479 Cr

How does it make money?

Turns over ₹3,479 Cr a year. Of every ₹100 of sales, about ₹10 reaches shareholders as profit, with ₹16 left at the operating level before interest, tax and depreciation. Each of its 2,708 employees supports ₹1.28 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹1.28 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 9.1% 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.

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 +1% while net margin moved +73% 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+1%

Margin effect+73%

DalalBaazaar Score

61/ 100

Good

Weighted across six categories. Every point is explained below.

✗ ROE of 9.3% is weak

Quality vs. Valuation

Company Quality

59/ 100

Average

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

Valuation

81/ 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

7.3x

3Y Median

8.4x

40 monthly readings · mean 10.1x · range 5.6x–19.7x

Sector Median

18.2x

median of 4 sector peers

🟢Current valuation is approximately 13% below its 3y median of 8.4x. 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 60% below the peer median of 18.2x.

vs. its own history

Fair

8.4x median over 40 months · -13%

vs. sector peers

Cheap

18.2x median of 4 peers · -60%

vs. generic bands

Cheap

Below 15x

EV/EBITDA

5.1x

PEG

0.35

What's Good / What's Bad

🟢 What's Going Well4

Margins are improving
EBITDA margin is up from 12.0% to 15.5% over 3 years.
Debt is being paid down
Total debt is down 14% over 3 years.
Very low debt
Debt/Equity of 0.14x leaves the balance sheet with plenty of headroom.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention0

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

Red Flags

3 items require attention · 1 high · 2 watch

🔴Receivables growing faster than salesFinancial
Receivables up 103% against revenue up 1% — sales are being booked faster than they are collected.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹88 Cr in the latest year.
🟡Inventory building faster than salesFinancial
Inventory up 60% against revenue up 1% — stock may not be moving.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Margin expansion has further to run
EBITDA margin has risen from 12.0% to 15.5%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
Cheaper than its peers
It trades 60% below the sector median. Either the market sees a problem the numbers do not show, or the discount closes.
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 103% against revenue up 1%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
Growth barely outpaces inflation
Revenue compounding at 0.3% 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.
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

1EBITDA margin holds above 14%✓ 15.5%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Free cash flow remains positive✗ -₹88 Cr
Profit that never becomes cash eventually stops being profit.
3Revenue growth stays above 4% a year✗ 0.3% CAGR
Latest reported year was -0.5%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
4Debt / EBITDA stays below 2x✓ 1.0x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 8%✓ 9.1%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

4 / 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

4 good · 4 neutral · 3 weak

Market Cap

₹2,272 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

7.3x

Cheap

Cheap against the generic band

P/B Ratio

0.63x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹17.48

Profitable

Profitable on a per-share basis

ROE

9.3%

Moderate

Moderate capital efficiency

ROCE

9.1%

Moderate

Moderate return on the capital in the business

Debt/Equity

0.14x

Low

Conservative leverage

Revenue Growth (YoY)

-0.5%

Shrinking

Sales are contracting

Profit Growth (YoY)

-22.0%

Falling

Profits are shrinking

Dividend Yield

1.42%

Modest

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

Free Cash Flow

-₹88 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

P/E (Forward)

3.9x

Improving

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

Operating Margin

10.1%

Average

Average margins

Net Margin

9.0%

Average

Average bottom-line conversion

Current Ratio

1.70

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.47

Defensive

Steadier than the market

52W Range Position

27%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

119.2 / 123.7

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

60.6

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹3,444 Cr	₹3,678 Cr	₹4,014 Cr	₹3,479 Cr	+0.3%
EBITDA	₹414 Cr	₹516 Cr	₹541 Cr	₹540 Cr	+9.2%
EBITDA Margin	12.0%	14.0%	13.5%	15.5%	—
PAT (Net Profit)	₹190 Cr	₹348 Cr	₹355 Cr	₹333 Cr	+20.5%
EPS	₹10.64	₹19.44	₹19.85	₹18.6	+20.5%
ROE	6.4%	11.5%	10.7%	9.3%	—
ROCE	7.8%	12.2%	11.3%	9.1%	—
Total Debt	₹599 Cr	₹362 Cr	₹423 Cr	₹515 Cr	-4.9%
Free Cash Flow	₹127 Cr	₹138 Cr	-₹33 Cr	-₹88 Cr	—

🟡 Revenue has been broadly flat over 3 years (0.3% a year).

🟢 EBITDA has grown at 9.2% a year over 3 years.

🟢 EBITDA Margin has risen from 12.0% to 15.5% over 3 years (+3.5 pts).

🟢 PAT (Net Profit) has grown at 20.5% a year over 3 years.

🟢 EPS has grown at 20.5% a year over 3 years.

🟢 ROE has risen from 6.4% to 9.3% over 3 years (+2.8 pts).

🟢 ROCE has risen from 7.8% to 9.1% over 3 years (+1.3 pts).

🟢 Total Debt has shrunk at 4.9% a year over 3 years.

🔴 Free Cash Flow has turned negative, from ₹127 Cr to -₹88 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹4,753 Cr

Total Liabilities

₹1,164 Cr

Cash & Equivalents

₹14 Cr

Operating Cash Flow

₹299 Cr

Capex

-₹387 Cr

Shareholding (proxy)

Institutional Holding

2.2%

Insider Holding

35.3%

Corporate Actions

Dividend Rate

₹1.8

Ex-Dividend Date

16 Sept 2026

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 mixed3 general

Prakash Industries Share Price Update After Intraday Gain

Univest, 16 OctPrice 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.

Prakash Industries Number of Employees 2026 | Employee Count & Headcount Data

Revelio Labs, 30 Jul

Prakash Industries Posts 2.7% YoY Net Profit Growth Reaching ₹93.3 Cr in Q4

Sahi, 22 MayResults

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

Prakash Industries Ltd is Rated Strong Sell

MarketsMojo, 16 Oct

Dolly Khanna portfolio rejig: Ace investor likely exits 2 stocks, pares holding in Prakash Industries in Q

The Economic Times, 15 Jul

Prakash Industries' (NSE:PRAKASH) 22% CAGR outpaced the company's earnings growth over the same five-year period

Simply Wall Street, 10 FebResults

🟡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 (-0.5%) 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.

DalalBaazaar Thesis

StrongFinancial Health · Growth · Valuation

MiddlingBusiness Quality

WeakProfitability · 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. 1 high-severity red flag sits above this conclusion and should be read first.

2 of 5 tripwires tripped — Free cash flow remains positive; Revenue growth stays above 4% a year · see Key things to watch ↑