Rathi Bars Limited

Basic Materials — Steel · BSE

₹15.50−₹0.09 (−0.58%)

DalalBaazaar Score

34 / 100

🔴 Weak

Verdict

CAUTION

Risk

Very High

Driven by moderate debt load, the company is currently loss-making, micro-cap size, which brings thin liquidity.

In simple words: The company is currently losing money, but sales are shrinking. The direction of profits is 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 Rathi Bars Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Rathi Bars Limited, a steel rolling mill, engages in manufacture, marketing, branding, and distribution of TMT bars and low carbon billets for the construction industry in India. It provides its products under the Rathi Shaktiman brand name.

IndustrySteel

SectorBasic Materials

Annual revenue₹355 Cr

How does it make money?

Turns over ₹355 Cr a year. Of every ₹100 of sales, about ₹-3 reaches shareholders as profit, with ₹-0 left at the operating level before interest, tax and depreciation.

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 -7.0% 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.

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 -25% while net margin moved -692% 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-25%

Margin effect-692%

DalalBaazaar Score

34/ 100

Weak

Weighted across six categories. Every point is explained below.

✗ Return on equity is negative
✗ ROE has fallen by 16.4 points over the period

Quality vs. Valuation

Company Quality

30/ 100

Weak

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

Valuation

36/ 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

No P/E — the company is lossmaking

EV/EBITDA

—

PEG

—

What's Good / What's Bad

🟢 What's Going Well1

Cash flow has turned positive
Free cash flow moved from negative to positive over 3 years.

🔴 What Needs Attention2

Return on equity is falling
ROE has dropped from 2.9% to -13.6% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 7.7% to -7.0% — often a sign of competition or overexpansion.

Red Flags

4 items require attention · 2 high · 2 watch

🔴Thin interest coverageFinancial
Operating profit covers interest only -1.2x — little room if earnings dip.
🔴The company is lossmakingFinancial
Net profit of -₹12 Cr in the latest reported year.
🟡Interest coverage is deterioratingFinancial
Cover has fallen from 1.6x to -1.2x.
🟡Margins are compressingFinancial
EBITDA margin is down 3.4 points over 3 years.

Investment Thesis

🟢 Bull CaseWhat could make this work?

No clear supporting case emerges from the available numbers.

🔴 Bear CaseWhat could go wrong?

Margins are being competed away
EBITDA margin has fallen from 3.2% to -0.2%. If the trend continues, profit falls even on flat sales — and margin decline rarely reverses quickly.
Returns on shareholder capital are falling
ROE has dropped from 2.9% to -13.6%. 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.
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 -2%✓ -0.2%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Interest cover stays above 3x✗ -1.2x
How much operating profit can fall before interest stops being comfortably covered.
3Free cash flow remains positive✓ ₹1 Cr
Profit that never becomes cash eventually stops being profit.
4ROCE stays above 8%✗ -7.0%
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

2 good · 3 neutral · 6 weak

Market Cap

₹25 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

0.30x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹-17.14

Loss-making

Negative earnings per share — the business is losing money

ROE

-13.6%

Weak

Weak capital efficiency

ROCE

-7.0%

Weak

Low return on total capital employed

Debt/Equity

1.01x

Moderate

Moderate leverage

Revenue Growth (YoY)

-27.5%

Shrinking

Sales are contracting

Profit Growth (YoY)

-549.1%

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

₹1 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

Operating Margin

-10.1%

Weak

Thin margins leave little room for error

Net Margin

-11.9%

Weak

Very little revenue reaches the bottom line

Current Ratio

1.33

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.28

Defensive

Steadier than the market

52W Range Position

Near low

Near its 52-week low

Technical Snapshot

SMA 20 / SMA 50

15.3 / 16.2

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

48.3

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹471 Cr	₹602 Cr	₹489 Cr	₹355 Cr	-9.0%
EBITDA	₹15 Cr	₹14 Cr	₹14 Cr	-₹1 Cr	—
EBITDA Margin	3.2%	2.4%	2.9%	-0.2%	—
PAT (Net Profit)	₹3 Cr	₹4 Cr	₹3 Cr	-₹12 Cr	—
EPS	₹1.58	₹2.19	₹1.57	₹-7.06	—
ROE	2.9%	3.8%	2.7%	-13.6%	—
ROCE	7.7%	9.0%	8.8%	-7.0%	—
Total Debt	₹72 Cr	₹67 Cr	₹82 Cr	₹86 Cr	+5.9%
Free Cash Flow	-₹2 Cr	₹11 Cr	-₹9 Cr	₹1 Cr	—

🔴 Revenue has shrunk at 9.0% a year over 3 years.

🔴 EBITDA has turned negative, from ₹15 Cr to -₹1 Cr.

🔴 EBITDA Margin has fallen from 3.2% to -0.2% over 3 years (-3.4 pts).

🔴 PAT (Net Profit) has turned negative, from ₹3 Cr to -₹12 Cr.

🔴 EPS has turned negative, from ₹1.58 to ₹-7.06.

🔴 ROE has fallen from 2.9% to -13.6% over 3 years (-16.4 pts).

🔴 ROCE has fallen from 7.7% to -7.0% over 3 years (-14.8 pts).

🔴 Total Debt has grown at 5.9% a year over 3 years.

🟢 Free Cash Flow has turned positive, from -₹2 Cr to ₹1 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹254 Cr

Total Liabilities

₹169 Cr

Cash & Equivalents

₹0 Cr

Operating Cash Flow

₹1 Cr

Capex

-₹0 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

64.0%

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 positive1 mixed4 general

Compare LLOYDS STEEL IND. with RATHI BARS

Equitymaster, 13 Oct

Rathi Bars closes trading window from Oct 1 for Q2FY27 results

scanx.trade, 23 SeptResults

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

Rathi Bars names CFO Uddhav Rathi as interim compliance officer

scanx.trade, 25 Aug

Rathi Bars seeks approval for ₹200 crore related-party deals at AGM

scanx.trade, 26 Aug

Motisons Jewellers standalone net profit rises 37.61% in the June 2026 quarter

Business Standard, 12 AugResults

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

Zee share price to be in focus on Monday after Sebi bars Subhash Chandra, Punit Goenka for one year

Livemint, 01 Aug

Watch Items

Revenue growth is negative (-27.5%) on the latest reported period — check if this is one-off or a trend.
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

MiddlingFinancial Health · Valuation

WeakBusiness Quality · Growth · Profitability · Risk

Points for each in the Score ↑

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.

2 of 4 tripwires tripped — Interest cover stays above 3x; ROCE stays above 8% · see Key things to watch ↑