Riddhi Steel and Tube Limited

Basic Materials — Steel · BSE

₹289.50₹0.00 (0.00%)

DalalBaazaar Score

52 / 100

🟡 Moderate

Verdict

CAUTION

Risk

Very High

Driven by high debt relative to equity, negative free cash flow, micro-cap size, which brings thin liquidity.

In simple words: Strong business and financial position, but sales are shrinking. Debt is the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:45 pm

Understanding the Business

Company site ↗

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

What does this company do?

Riddhi Steel and Tube Limited manufactures, deals, trades in, and exports ERW steel tubes and pipes in India and internationally. The company offers MS black, galvanized, and pre-galvanized pipes in round, square, and rectangular hollow sections.

IndustrySteel

SectorBasic Materials

Employees82

Annual revenue₹458 Cr

How does it make money?

Turns over ₹458 Cr a year. Of every ₹100 of sales, about ₹3 reaches shareholders as profit, with ₹7 left at the operating level before interest, tax and depreciation. Each of its 82 employees supports ₹5.58 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹5.58 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?The numbers suggest a real one

ROCE has stayed above 15% in every year available and stands at 23.8%. Returns that high normally get competed away; when they persist, something is protecting them, and its ROE of 16.9% against a peer median of 10.8% is consistent with that. What that something is — brand, scale, switching costs, regulation — the accounts cannot tell you.

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 +51% while net margin moved +123% 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+51%

Margin effect+123%

DalalBaazaar Score

52/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ P/E of 47.1x is demanding — it needs sustained high growth to justify
✗ P/E is 156% above its own historical median of 18.4x — expensive by its own standards

Quality vs. Valuation

Company Quality

56/ 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

47.1x

3Y Median

18.4x

40 monthly readings · mean 22.2x · range 7.8x–47.5x

Sector Median

18.2x

median of 4 sector peers

⚠️Current valuation is approximately 156% above its 3y median of 18.4x. 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 159% above the peer median of 18.2x.

vs. its own history

Expensive

18.4x median over 40 months · +156%

vs. sector peers

Expensive

18.2x median of 4 peers · +159%

vs. generic bands

Expensive

Above 35x

EV/EBITDA

15.7x

PEG

0.95

What's Good / What's Bad

🟢 What's Going Well4

Return on equity is rising
ROE has improved from 6.5% to 15.6%.
Return on capital is rising
ROCE has improved from 16.6% to 23.8%.
High return on capital employed
ROCE of 23.8% is the mark of a business that converts capital into profit efficiently.
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 · 2 high · 1 watch

🔴High leverageFinancial
Debt/Equity of 1.87x — earnings must service borrowings before shareholders see anything.
🔴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 100% against revenue up 51% — stock may not be moving.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Capital compounds at a high rate
ROCE of 23.8% means each rupee reinvested earns well above what capital costs. If the company can keep deploying at this rate, growth creates value rather than just consuming cash.
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?

The debt load needs earnings to hold up
Debt is 4.4x EBITDA. At that level a downturn in earnings turns a manageable balance sheet into a refinancing problem, and lenders get paid before shareholders.
The price already assumes success
The stock trades 156% 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.
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

1Revenue growth stays above 11% a year✓ 14.8% CAGR
Latest reported year was -10.8%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 5%✓ 6.8%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Debt / EBITDA falls below 3x✗ 4.4x
Already stretched, so this is a reduction target rather than a level to hold. Around 3x is where lenders typically start attaching conditions.
4Interest cover stays above 3x✗ 2.2x
How much operating profit can fall before interest stops being comfortably covered.
5Free cash flow remains positive✓ ₹4 Cr
Profit that never becomes cash eventually stops being profit.

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

3 good · 3 neutral · 5 weak

Market Cap

₹360 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

47.1x

Expensive

Expensive — verify against sector peers

P/B Ratio

4.89x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹6.14

Profitable

Profitable on a per-share basis

ROE

16.9%

Strong

Strong capital efficiency

ROCE

23.8%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

1.87x

High

High leverage

Revenue Growth (YoY)

-10.8%

Shrinking

Sales are contracting

Profit Growth (YoY)

-57.6%

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

-₹10 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

ROA

8.0%

Average

Average asset productivity

Operating Margin

5.7%

Average

Average margins

Net Margin

2.5%

Weak

Very little revenue reaches the bottom line

Current Ratio

2.01

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.71

Defensive

Steadier than the market

52W Range Position

100%

Near high

Near its 52-week high

Technical Snapshot

SMA 20 / SMA 50

255.1 / 224.4

Bullish alignment (short > long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

99.4

Overbought zone

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹303 Cr	₹328 Cr	₹391 Cr	₹458 Cr	+14.8%
EBITDA	₹19 Cr	₹21 Cr	₹25 Cr	₹31 Cr	+17.1%
EBITDA Margin	6.4%	6.4%	6.3%	6.8%	—
PAT (Net Profit)	₹3 Cr	₹5 Cr	₹8 Cr	₹11 Cr	+49.9%
EPS	₹2.73	₹3.86	₹6.1	—	—
ROE	6.5%	8.4%	12.2%	15.6%	—
ROCE	16.6%	18.0%	20.1%	23.8%	—
Total Debt	₹120 Cr	₹132 Cr	₹130 Cr	₹137 Cr	+4.6%
Free Cash Flow	₹16 Cr	₹8 Cr	₹12 Cr	₹4 Cr	-35.7%

🟢 Revenue has grown at 14.8% a year over 3 years.

🟢 EBITDA has grown at 17.1% a year over 3 years.

🟡 EBITDA Margin has held roughly flat at 6.8% over 3 years.

🟢 PAT (Net Profit) has grown at 49.9% a year over 3 years.

🟢 ROE has risen from 6.5% to 15.6% over 3 years (+9.1 pts).

🟢 ROCE has risen from 16.6% to 23.8% over 3 years (+7.2 pts).

🔴 Total Debt has grown at 4.6% a year over 3 years.

🔴 Free Cash Flow has shrunk at 35.7% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹217 Cr

Total Liabilities

₹143 Cr

Cash & Equivalents

₹9 Cr

Operating Cash Flow

₹6 Cr

Capex

-₹2 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

91.5%

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

Riddhi Steel & Tube Share Price near 52-week high, Rs 360 cr

Univest, 09 Oct

Riddhi Steel & Tube passes all AGM resolutions with 100% support

scanx.trade, 02 Oct

Riddhi Steel & Tube Ltd. Key Financial Ratios – Valuation, Profitability & More

Value Research, 04 Sept

Riddhi Steel & Tube Ltd. Upper Circuit Today: Price, Data and Peers

Univest, 01 Oct

Riddhi Steel & Tube Ltd

Equitypandit, 09 Mar

Riddhi Steel FY26 net profit rises 51% to ₹1,145.37 lakh

scanx.trade, 26 MayResults

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

Watch Items

Revenue growth is negative (-10.8%) on the latest reported period — check if this is one-off or a trend.
Trading very close to its 52-week high — momentum-driven entries here carry more mean-reversion risk.
Cross-check against the company's latest quarterly filing / investor presentation before acting.
RSI is in overbought territory — momentum entries here carry more short-term pullback risk.

DalalBaazaar Thesis

StrongGrowth · Profitability

MiddlingBusiness Quality

WeakFinancial Health · Valuation · 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. 2 high-severity red flags sit above this conclusion and should be read first.

2 of 5 tripwires tripped — Debt / EBITDA falls below 3x; Interest cover stays above 3x · see Key things to watch ↑