S.A.L. Steel Limited

Basic Materials — Steel · NSE

₹80.70−₹3.01 (−3.60%)

DalalBaazaar Score

33 / 100

🔴 Weak

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: The business is earning a fairly low return on the money invested in it, but sales are shrinking. Debt is the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:09 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 S.A.L. Steel Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

S.A.L. Steel Limited manufactures and sells ferro alloys and sponge iron in India. The company offers low silicon and high carbon ferro chrome products for use in steelmaking.

IndustrySteel

SectorBasic Materials

Employees443

Annual revenue₹207 Cr

How does it make money?

Turns over ₹207 Cr a year. Of every ₹100 of sales, about ₹-0 reaches shareholders as profit, with ₹7 left at the operating level before interest, tax and depreciation. Each of its 443 employees supports ₹46.8 lakh of revenue a year, the signature of a people-led business.

EBITDA margin6.9%

Net margin-0.2%

Revenue / employee₹46.8 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.

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 4.0% 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.

ROCE4.0%

ROE-0.2%

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 -58% while net margin moved -124% 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-58%

Margin effect-124%

DalalBaazaar Score

33/ 100

Weak

Weighted across six categories. Every point is explained below.

✗ Revenue has contracted at 25.2% a year
✗ Latest-year revenue growth of -31.5% is below the longer-term trend — momentum is fading

Quality vs. Valuation

Company Quality

31/ 100

Weak

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

Valuation

42/ 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

64.0x

3Y Median

385.5x

40 monthly readings · mean 477.6x · range 37.7x–1651.0x

Sector Median

18.2x

median of 4 sector peers

🟢Current valuation is approximately 83% below its 3y median of 385.5x. 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 252% above the peer median of 18.2x.

vs. its own history

Cheap

385.5x median over 40 months · -83%

vs. sector peers

Expensive

18.2x median of 4 peers · +252%

vs. generic bands

Expensive

Above 35x

P/E (Trailing)

64.0x

P/B

8.02x

EV/EBITDA

105.3x

PEG

—

Dividend Yield

None

What's Good / What's Bad

🟢 What's Going Well2

Margins are improving
EBITDA margin is up from 4.6% to 6.9% over 3 years.
Valuation below its historical average
At 64.0x the stock trades 83% below its own median of 385.5x.

🔴 What Needs Attention5

Debt is rising
Total debt is up 179% over 3 years — worth checking what it funded.
Free cash flow is negative
The business is not currently covering its capital spending from operations.
Return on equity is falling
ROE has dropped from 8.7% to -0.2% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 7.1% to 4.0% — often a sign of competition or overexpansion.
Inventory building faster than sales
Inventory is up 298% against revenue growth of -58% — stock may not be moving.

Red Flags

8 items require attention · 6 high · 2 watch

🔴Debt has risen sharplyFinancial
Total debt is up 179% over 3 years, from ₹125 Cr to ₹349 Cr.
🔴High leverageFinancial
Debt/Equity of 2.38x — earnings must service borrowings before shareholders see anything.
🔴Thin interest coverageFinancial
Operating profit covers interest only 1.0x — little room if earnings dip.
🔴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.
🔴The company is lossmakingFinancial
Net profit of -₹0 Cr in the latest reported year.
🔴Inventory building faster than salesFinancial
Inventory up 298% against revenue up -58% — stock may not be moving.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹259 Cr in the latest year.
🟡Shareholders have been dilutedOwnership
Shares outstanding are up 70% over 3 years — each existing share owns a smaller slice of the company.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Margin expansion has further to run
EBITDA margin has risen from 4.6% to 6.9%. 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 83% 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.

🔴 Bear CaseWhat could go wrong?

The debt load needs earnings to hold up
Debt is 24.2x EBITDA. At that level a downturn in earnings turns a manageable balance sheet into a refinancing problem, and lenders get paid before shareholders.
A premium to the sector to defend
It trades 252% above the peer median. That premium needs a reason that persists, or it closes.
Returns on shareholder capital are falling
ROE has dropped from 8.7% to -0.2%. 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.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1EBITDA margin holds above 5%✓ 6.9%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Debt / EBITDA falls below 3x✗ 24.2x
Already stretched, so this is a reduction target rather than a level to hold. Around 3x is where lenders typically start attaching conditions.
3Free cash flow remains positive✗ -₹259 Cr
Profit that never becomes cash eventually stops being profit.
4Interest cover stays above 3x✗ 1.0x
How much operating profit can fall before interest stops being comfortably covered.
5ROCE stays above 8%✗ 4.0%
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 · 2 neutral · 7 weak

Market Cap

₹1,168 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

64.0x

Expensive

Expensive — verify against sector peers

P/B Ratio

8.02x

Rich

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

EPS (TTM)

₹1.26

Profitable

Profitable on a per-share basis

ROE

-0.2%

Weak

Weak capital efficiency

ROCE

4.0%

Weak

Low return on total capital employed

Debt/Equity

2.38x

High

High leverage

Revenue Growth (YoY)

-31.5%

Shrinking

Sales are contracting

Profit Growth (YoY)

94.5%

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

-₹259 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

CMP

₹80.7

Operating Margin

12.4%

Average

Average margins

Net Margin

7.4%

Average

Average bottom-line conversion

Current Ratio

2.31

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

1.03

Market-like

Moves roughly in line with the market

52W Range Position

69%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

88.4 / 79.7

Bullish alignment (short > long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

29.3

Oversold zone

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹496 Cr	₹577 Cr	₹544 Cr	₹207 Cr	-25.2%
EBITDA	₹23 Cr	₹23 Cr	₹24 Cr	₹14 Cr	-14.3%
EBITDA Margin	4.6%	4.0%	4.3%	6.9%	—
PAT (Net Profit)	₹4 Cr	₹0 Cr	-₹6 Cr	-₹0 Cr	—
EPS	₹0.42	₹0.06	₹-0.76	₹-0.04	—
ROE	8.7%	1.1%	-16.6%	-0.2%	—
ROCE	7.1%	7.1%	4.9%	4.0%	—
Total Debt	₹125 Cr	₹125 Cr	₹178 Cr	₹349 Cr	+40.8%
Free Cash Flow	₹6 Cr	₹13 Cr	-₹40 Cr	-₹259 Cr	—

🔴 Revenue has shrunk at 25.2% a year over 3 years.

🔴 EBITDA has shrunk at 14.3% a year over 3 years.

🟢 EBITDA Margin has risen from 4.6% to 6.9% over 3 years (+2.3 pts).

🔴 PAT (Net Profit) has turned negative, from ₹4 Cr to -₹0 Cr.

🔴 EPS has turned negative, from ₹0.42 to ₹-0.04.

🔴 ROE has fallen from 8.7% to -0.2% over 3 years (-9.0 pts).

🔴 ROCE has fallen from 7.1% to 4.0% over 3 years (-3.2 pts).

🔴 Total Debt has grown at 40.8% a year over 3 years.

🔴 Free Cash Flow has turned negative, from ₹6 Cr to -₹259 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹621 Cr

Total Liabilities

₹475 Cr

Total Debt

₹349 Cr

Cash & Equivalents

₹0 Cr

Operating Cash Flow

-₹84 Cr

Capex

-₹175 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

75.8%

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

SAL Steel Share Price Rises 8.17%: Technicals, Valuation

Univest, 19 AugPrice 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.

SAL Steel seeks shareholder approval for material related party deals

scanx.trade, 16 Oct

SAL Steel SALSTEEL Reg 74(5) Certificate Q2 FY27

Kalkine India, 08 OctResults

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

SAL Steel Ltd. Share Price Rise: Technicals and Valuation

Univest, 17 AugPrice 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.

S.A.L. Steel Limited (SALSTEEL.NS) Slips 5% as Stock Tests Key Support Near ₹67.50 - Institutional Flow Picks

siam.in, 15 Sept

SAL Steel Ltd. Shareholding Pattern – Promoters, FIIs & DIIs

Value Research, 29 Aug

Watch Items

Revenue growth is negative (-31.5%) 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.
RSI is in oversold territory — could mean either a bargain or a stock still falling for good reason. Check the 'why' before assuming reversal.

DalalBaazaar Thesis

🔴Business QualityWeak5.9/20

🔴Financial HealthStretched7/20

🔴GrowthWeak5/20

🔴ProfitabilityWeak4.9/15

🔴ValuationDemanding6.7/15

🔴RiskHigh3.3/10

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. 6 high-severity red flags sit above this conclusion and should be read first.

This thesis breaks if

✓EBITDA margin holds above 5%6.9%
✗Debt / EBITDA falls below 3x24.2x
✗Free cash flow remains positive-₹259 Cr
✗Interest cover stays above 3x1.0x
✗ROCE stays above 8%4.0%