Rhetan TMT Limited

Basic Materials — Steel · NSE

₹16.57−₹0.87 (−4.99%)

DalalBaazaar Score

58 / 100

🟡 Moderate

Verdict

CAUTION

Risk

High

Driven by negative free cash flow, 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, 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, 7:03 pm

Understanding the Business

Company site ↗

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

What does this company do?

Rhetan TMT Limited engages in the manufacture and sale of thermo-mechanically treated (TMT) bars in India.

IndustrySteel

SectorBasic Materials

Employees40

Annual revenue₹24 Cr

How does it make money?

Turns over ₹24 Cr a year. Of every ₹100 of sales, about ₹42 reaches shareholders as profit, with ₹62 left at the operating level before interest, tax and depreciation. Each of its 40 employees supports ₹61.1 lakh of revenue a year, the signature of a people-led business.

Revenue / employee₹61.1 lakh

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 10.8% 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 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 -72% while net margin moved +569% 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-72%

Margin effect+569%

DalalBaazaar Score

58/ 100

Moderate

Weighted across six categories. Every point is explained below.

• Beta of 0.93 — moves roughly with the market
✗ 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

64/ 100

Average

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

Valuation

39/ 100

Expensive

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

97.5x

1.3Y Median

623.9x

15 monthly readings · mean 524.4x · range 127.5x–789.7x

Sector Median

18.2x

median of 4 sector peers

🟢Current valuation is approximately 84% below its 1.3y median of 623.9x. 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 436% above the peer median of 18.2x.

vs. its own history

Cheap

623.9x median over 15 months · -84%

vs. sector peers

Expensive

18.2x median of 4 peers · +436%

vs. generic bands

Expensive

Above 35x

EV/EBITDA

89.4x

PEG

4.08

What's Good / What's Bad

🟢 What's Going Well3

Margins are improving
EBITDA margin is up from 10.5% to 62.4% over 3 years.
Return on equity is rising
ROE has improved from 6.4% to 9.5%.
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

4 items require attention · 3 high · 1 watch

🔴Debt has risen sharplyFinancial
Total debt is up 136% over 3 years, from ₹18 Cr to ₹42 Cr.
🔴Profit up while operating cash flow fallsFinancial
Reported profit rose but cash generated by operations declined — worth checking whether earnings are being supported by non-cash items or working capital.
🔴Inventory building faster than salesFinancial
Inventory up 60% against revenue up -72% — stock may not be moving.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹3 Cr in the latest year.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Margin expansion has further to run
EBITDA margin has risen from 10.5% to 62.4%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
Priced below its own history
The stock trades 84% below its own median multiple. If the business performs as it has and simply re-rates back to normal, that gap is return on its own.
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?

A premium to the sector to defend
It trades 436% above the peer median. That premium needs a reason that persists, or it closes.
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
3 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 60%✓ 62.4%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Debt / EBITDA stays below 2x✗ 2.8x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
3Free cash flow remains positive✗ -₹3 Cr
Profit that never becomes cash eventually stops being profit.
4ROCE stays above 8%✓ 10.8%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.
5Valuation vs its own median of 623.9x✓ 97.5x today
A re-rating above its own history needs a reason; without one it is just a higher price.

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

3 good · 4 neutral · 4 weak

Market Cap

₹1,320 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

97.5x

Expensive

Expensive — verify against sector peers

P/B Ratio

12.16x

Rich

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

EPS (TTM)

₹0.17

Profitable

Profitable on a per-share basis

ROE

9.5%

Moderate

Moderate capital efficiency

ROCE

10.8%

Moderate

Moderate return on the capital in the business

Debt/Equity

0.38x

Low

Conservative leverage

Revenue Growth (YoY)

-19.3%

Shrinking

Sales are contracting

Profit Growth (YoY)

300.0%

Healthy

Profits growing at a healthy clip

Dividend Yield

None

No dividend yield reported — usually means no payout, but verify if one was recently initiated

Free Cash Flow

-₹3 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

Operating Margin

-20.0%

Weak

Thin margins leave little room for error

Net Margin

54.1%

Good

Strong bottom-line conversion

Current Ratio

4.25

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.93

Market-like

Moves roughly in line with the market

52W Range Position

11%

Near low

Near its 52-week low

Technical Snapshot

SMA 20 / SMA 50

17.1 / 21.2

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

56.1

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹86 Cr	₹65 Cr	₹37 Cr	₹24 Cr	-34.3%
EBITDA	₹9 Cr	₹7 Cr	₹6 Cr	₹15 Cr	+18.9%
EBITDA Margin	10.5%	11.4%	14.9%	62.4%	—
PAT (Net Profit)	₹5 Cr	₹4 Cr	₹3 Cr	₹10 Cr	+23.9%
EPS	₹0.09	₹0.05	₹0.04	₹0.13	+13.0%
ROE	6.4%	4.3%	3.3%	9.5%	—
ROCE	9.2%	7.3%	4.9%	10.8%	—
Total Debt	₹18 Cr	₹17 Cr	₹23 Cr	₹42 Cr	+33.2%
Free Cash Flow	-₹45 Cr	₹5 Cr	₹3 Cr	-₹3 Cr	—

🔴 Revenue has shrunk at 34.3% a year over 3 years.

🟢 EBITDA has grown at 18.9% a year over 3 years.

🟢 EBITDA Margin has risen from 10.5% to 62.4% over 3 years (+51.8 pts).

🟢 PAT (Net Profit) has grown at 23.9% a year over 3 years.

🟢 EPS has grown at 13.0% a year over 3 years.

🟢 ROE has risen from 6.4% to 9.5% over 3 years (+3.1 pts).

🟢 ROCE has risen from 9.2% to 10.8% over 3 years (+1.6 pts).

🔴 Total Debt has grown at 33.2% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹165 Cr

Total Liabilities

₹57 Cr

Cash & Equivalents

₹0 Cr

Operating Cash Flow

₹1 Cr

Capex

-₹4 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

82.7%

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 positive5 general

250% Return In 3 Years: Iron & Steel Stock Hits Fresh 52-Week High After Key Business Update

Goodreturns, 16 Oct

Rhetan TMT Lower Circuit Today: Price, Data and Peers

Univest, 15 Oct

Rhetan TMT (RHETAN) Share/Stock Price Live, NSE

TechGraph, 08 Oct

Iron, steel stock Rhetan TMT retraces after inching close to 52-week high. Do you own?

Livemint, 27 Jul

Rhetan TMT Q1 Profit Jumps 4× to ₹3.16 Cr

HDFC Sky, 14 AugResults

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

Rhetan TMT Ltd leads losers in 'B' group

Business Standard, 11 Aug

Watch Items

Revenue growth is negative (-19.3%) 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.

DalalBaazaar Thesis

StrongBusiness Quality · Financial Health · Profitability

MiddlingGrowth

WeakValuation · 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.

2 of 5 tripwires tripped — Debt / EBITDA stays below 2x; Free cash flow remains positive · see Key things to watch ↑