Prakash Steelage Limited

Basic Materials — Steel · NSE

₹3.44+₹0.01 (+0.29%)

DalalBaazaar Score

36 / 100

🔴 Weak

Verdict

CAUTION

Risk

Very High

Driven by high debt relative to equity, micro-cap size, which brings thin liquidity, a very high earnings multiple, which leaves little margin for disappointment.

In simple words: Reasonable but unspectacular business quality, though profits are falling even as sales grow. Debt 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.

Understanding the Business

Company site ↗

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

What does this company do?

Prakash Steelage Limited manufactures and trades in stainless steel welded pipes and tubes in India.

IndustrySteel

SectorBasic Materials

Employees76

Annual revenue₹91 Cr

How does it make money?

Turns over ₹91 Cr a year. Of every ₹100 of sales, about ₹1 reaches shareholders as profit, with ₹2 left at the operating level before interest, tax and depreciation. Each of its 76 employees supports ₹1.19 Cr of revenue a year, the signature of a capital- or asset-led business.

EBITDA margin2.3%

Net margin0.9%

Revenue / employee₹1.19 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 10.7% 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.

ROCE10.7%

ROE8.6%

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 -4% while net margin moved -79% 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-4%

Margin effect-79%

DalalBaazaar Score

36/ 100

Weak

Weighted across six categories. Every point is explained below.

✗ Revenue has contracted at 1.5% a year
✗ Profit has declined at 41.3% a year
✗ Profit fell 50.0% in the latest year

Quality vs. Valuation

Company Quality

38/ 100

Weak

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

Valuation

23/ 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.

Historical Valuation

Current P/E

114.7x

3Y Median

38.6x

40 monthly readings · mean 38.1x · range 1.8x–82.1x

Sector Median

18.2x

median of 4 sector peers

⚠️Current valuation is approximately 197% above its 3y median of 38.6x. Paying more than usual needs a reason — faster growth, a better balance sheet, or a re-rating you believe in.

⚠️Against its sector it trades 531% above the peer median of 18.2x.

vs. its own history

Expensive

38.6x median over 40 months · +197%

vs. sector peers

Expensive

18.2x median of 4 peers · +531%

vs. generic bands

Expensive

Above 35x

P/E (Trailing)

114.7x

P/B

6.71x

EV/EBITDA

28.7x

PEG

—

Dividend Yield

None

What's Good / What's Bad

🟢 What's Going Well2

Debt is being paid down
Total debt is down 98% over 3 years.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention3

Margins are compressing
EBITDA margin has slipped from 4.3% to 2.3% over 3 years.
Receivables growing faster than sales
Receivables are up 68% against revenue growth of -4% — customers are taking longer to pay.
Valuation above its historical average
At 114.7x the stock trades 197% above its own median of 38.6x.

Red Flags

3 items require attention · 2 high · 1 watch

🔴High leverageFinancial
Debt/Equity of 4.67x — earnings must service borrowings before shareholders see anything.
🔴Receivables growing faster than salesFinancial
Receivables up 68% against revenue up -4% — sales are being booked faster than they are collected.
🟡Profit is decliningFinancial
Net profit is down 80% over 3 years.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Deleveraging frees up earnings
Debt is down 98% over 3 years. Every rupee of interest not paid drops to the bottom line, so profit can grow even if revenue does not.
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?

Margins are being competed away
EBITDA margin has fallen from 4.3% to 2.3%. If the trend continues, profit falls even on flat sales — and margin decline rarely reverses quickly.
Leverage amplifies any setback
Debt/Equity of 4.67x. Interest is payable whether or not the business has a good year.
Sales are being booked faster than collected
Receivables are up 68% against revenue up -4%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
The price already assumes success
The stock trades 197% above its own median multiple. At this level the business has to deliver just to stand still, and a stumble is repriced twice — lower earnings on a lower multiple.
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 0%✓ 2.3%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Free cash flow remains positive✓ ₹4 Cr
Profit that never becomes cash eventually stops being profit.
3Debt / EBITDA stays below 2x✓ 0.2x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
4ROCE stays above 8%✓ 10.7%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.
5Valuation vs its own median of 38.6x✗ 114.7x today
A re-rating above its own history needs a reason; without one it is just a higher price.

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

2 good · 5 neutral · 4 weak

Market Cap

₹60 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

114.7x

Expensive

Expensive — verify against sector peers

P/B Ratio

6.71x

Rich

Steep premium to book — needs high, durable returns to justify

EPS (TTM)

₹0.03

Profitable

Profitable on a per-share basis

ROE

8.6%

Moderate

Moderate capital efficiency

ROCE

10.7%

Moderate

Moderate return on the capital in the business

Debt/Equity

4.67x

High

High leverage

Revenue Growth (YoY)

2.3%

Modest

Modest growth

Profit Growth (YoY)

-50.0%

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

₹4 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

CMP

₹3.44

Operating Margin

1.5%

Weak

Thin margins leave little room for error

Net Margin

0.7%

Weak

Very little revenue reaches the bottom line

Current Ratio

1.07

Adequate

Adequate, but no real cushion

Beta (vs Nifty)

-0.18

Defensive

Steadier than the market

52W Range Position

Near low

Near its 52-week low

Technical Snapshot

SMA 20 / SMA 50

3.5 / 3.7

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

32.8

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹95 Cr	₹106 Cr	₹76 Cr	₹91 Cr	-1.5%
EBITDA	₹4 Cr	₹25 Cr	₹3 Cr	₹2 Cr	-19.7%
EBITDA Margin	4.3%	23.2%	3.9%	2.3%	—
PAT (Net Profit)	₹4 Cr	₹58 Cr	₹1 Cr	₹1 Cr	-41.3%
EPS	₹0.24	₹3.31	₹0.07	₹0.05	-40.7%
ROE	—	750.1%	14.6%	8.6%	—
ROCE	—	696.1%	20.9%	10.7%	—
Total Debt	₹29 Cr	₹0 Cr	₹4 Cr	₹0 Cr	-75.0%
Free Cash Flow	₹6 Cr	₹28 Cr	-₹4 Cr	₹4 Cr	-13.7%

🟡 Revenue has been broadly flat over 3 years (-1.5% a year).

🔴 EBITDA has shrunk at 19.7% a year over 3 years.

🔴 EBITDA Margin has fallen from 4.3% to 2.3% over 3 years (-2.0 pts).

🔴 PAT (Net Profit) has shrunk at 41.3% a year over 3 years.

🔴 EPS has shrunk at 40.7% a year over 3 years.

🔴 ROE has fallen from 750.1% to 8.6% over 3 years (-741.5 pts).

🔴 ROCE has fallen from 696.1% to 10.7% over 3 years (-685.4 pts).

🟢 Total Debt has shrunk at 75.0% a year over 3 years.

🔴 Free Cash Flow has shrunk at 13.7% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹44 Cr

Total Liabilities

₹35 Cr

Total Debt

₹0 Cr

Cash & Equivalents

₹0 Cr

Operating Cash Flow

₹7 Cr

Capex

-₹3 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

33.4%

Corporate Actions

Ex-Dividend Date

21 Sept 2015

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

1 positive2 mixed1 negative2 general

Why Is Prakash Steelage Share Price Falling Key Reasons 2026

Univest, 24 JunPrice move

🟡Mixed / dependsA price move rather than a change in the business. If the figures on this page have not moved, the fall is either an opportunity or news they have yet to catch up with.

Do Its Financials Have Any Role To Play In Driving Prakash Steelage Limited's (NSE:PRAKASHSTL) Stock Up Recently?

Simply Wall Street, 27 Dec

Prakash Steelage revenue up 17% in FY26; profit falls 35% to ₹84 lakh

scanx.trade, 08 OctResults

🟢Potentially positiveReported improvement. Check whether it came from volume, price or a one-off item before treating it as a trend.

Prakash Steelage Share Price Target 2026: Bull Case Rs 5.00, Bear

Univest, 29 JunAnalyst view

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

Prakash Steelage Q1 Results: Net profit falls 59% YoY to ₹16.35 lakh

scanx.trade, 14 AugResults

🔴Potentially negativeReported deterioration, which feeds the growth and margin inputs on this page directly.

PRAKASH STEELAGE Share Price

Upstox, 31 Oct

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 QualityWeak7.9/20

🟢Financial HealthStrong13.5/20

🔴GrowthWeak2.4/20

🔴ProfitabilityWeak4.5/15

🔴ValuationDemanding3.3/15

🔴RiskHigh3.9/10

Weak on the fundamentals

Poor scores on business quality without a price low enough to compensate. There is no obvious argument for owning this over a stronger company at a similar valuation. 2 high-severity red flags sit above this conclusion and should be read first.

This thesis breaks if

✓EBITDA margin holds above 0%2.3%
✓Free cash flow remains positive₹4 Cr
✓Debt / EBITDA stays below 2x0.2x
✓ROCE stays above 8%10.7%
✗Valuation vs its own median of 38.6x114.7x today