Sarda Energy & Minerals Limited

Basic Materials — Steel · NSE

₹488.00+₹3.65 (+0.75%)

DalalBaazaar Score

73 / 100

🟢 Good

Verdict

REASONABLE

Risk

Low

Driven by small-cap size, which brings sharper price swings.

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

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:01 pm

Understanding the Business

Company site ↗

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

What does this company do?

Sarda Energy & Minerals Limited produces and sells steel products in India and internationally. The company product portfolio includes pellets, sponge iron, steel billets and wire rods, ferro alloys, eco-bricks, and HB wires.

IndustrySteel

SectorBasic Materials

Employees1,942

Annual revenue₹5,644 Cr

How does it make money?

Turns over ₹5,644 Cr a year. Of every ₹100 of sales, about ₹20 reaches shareholders as profit, with ₹34 left at the operating level before interest, tax and depreciation. Each of its 1,942 employees supports ₹2.91 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹2.91 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?Some evidence

ROCE of 16.1% is above what capital typically costs, which suggests some pricing power, though not yet the sustained, wide gap that marks a durable advantage.

Peer median ROE10.8%

What has been driving growth?

Sales and margins have both contributed to where profit is now. Over 3 years revenue moved +35% while net margin moved +36% 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+35%

Margin effect+36%

DalalBaazaar Score

73/ 100

Good

Weighted across six categories. Every point is explained below.

✓ Beta of 0.52 — historically steadier than the index
✗ Small Cap: thinner liquidity and sharper drawdowns are normal

Quality vs. Valuation

Company Quality

75/ 100

Good

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

Valuation

71/ 100

Cheap

What you are being asked to pay, ignoring how good the business is.

A good business currently available at an undemanding price — the combination this framework is built to look for.

Historical Valuation

Current P/E

15.2x

3Y Median

25.7x

40 monthly readings · mean 22.7x · range 11.9x–34.6x

Sector Median

18.2x

median of 4 sector peers

🟢Current valuation is approximately 41% below its 3y median of 25.7x. 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 16% below the peer median of 18.2x.

vs. its own history

Cheap

25.7x median over 40 months · -41%

vs. sector peers

Fair

18.2x median of 4 peers · -16%

vs. generic bands

Fair

15x–35x

EV/EBITDA

10.3x

PEG

0.68

What's Good / What's Bad

🟢 What's Going Well3

Margins are improving
EBITDA margin is up from 26.8% to 33.8% over 3 years.
Cash generation is improving
Free cash flow is up 188% over 3 years.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention1

Return on capital is falling
ROCE has declined from 19.4% to 16.1% — often a sign of competition or overexpansion.

Red Flags

1 item require attention · 1 high

🔴Debt has risen sharplyFinancial
Total debt is up 84% over 3 years, from ₹1,433 Cr to ₹2,632 Cr.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Margin expansion has further to run
EBITDA margin has risen from 26.8% to 33.8%. 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 41% 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.
Self-funding with balance-sheet headroom
Positive free cash flow of ₹1,397 Cr alongside low debt means growth, buybacks or dividends need no outside money — and a downturn can be absorbed rather than refinanced.
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?

Size brings its own risk
Small 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

1Revenue growth stays above 8% a year✓ 10.4% CAGR
Latest reported year was -1.5%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 32%✓ 33.8%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Free cash flow remains positive✓ ₹1,397 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 1.4x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 13%✓ 16.1%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

9 / 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

5 good · 5 neutral · 1 weak

Market Cap

₹17,196 Cr

Small Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

15.2x

Fair

Fairly valued against the generic band

P/B Ratio

2.34x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹32.05

Profitable

Profitable on a per-share basis

ROE

15.0%

Strong

Strong capital efficiency

ROCE

16.1%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

0.35x

Low

Conservative leverage

Revenue Growth (YoY)

-1.5%

Shrinking

Sales are contracting

Profit Growth (YoY)

5.4%

Modest

Slow profit growth

Dividend Yield

0.41%

Modest

Small cash return — most of the return has to come from the price

Free Cash Flow

₹1,397 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

P/E (Forward)

10.3x

Improving

Below the trailing multiple — the street expects earnings to grow into the price

Operating Margin

35.1%

Good

Healthy core-business profitability

Net Margin

19.9%

Good

Strong bottom-line conversion

Current Ratio

4.50

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.52

Defensive

Steadier than the market

52W Range Position

20%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

494.3 / 503.8

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

46.8

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹4,189 Cr	₹3,823 Cr	₹4,605 Cr	₹5,644 Cr	+10.4%
EBITDA	₹1,121 Cr	₹887 Cr	₹1,369 Cr	₹1,909 Cr	+19.4%
EBITDA Margin	26.8%	23.2%	29.7%	33.8%	—
PAT (Net Profit)	₹602 Cr	₹523 Cr	₹700 Cr	₹1,106 Cr	+22.5%
EPS	₹16.99	₹14.84	₹19.86	₹31.38	+22.7%
ROE	17.7%	13.4%	11.1%	15.0%	—
ROCE	19.4%	15.0%	12.3%	16.1%	—
Total Debt	₹1,433 Cr	₹1,366 Cr	₹2,861 Cr	₹2,632 Cr	+22.5%
Free Cash Flow	₹485 Cr	₹477 Cr	₹395 Cr	₹1,397 Cr	+42.3%

🟢 Revenue has grown at 10.4% a year over 3 years.

🟢 EBITDA has grown at 19.4% a year over 3 years.

🟢 EBITDA Margin has risen from 26.8% to 33.8% over 3 years (+7.1 pts).

🟢 PAT (Net Profit) has grown at 22.5% a year over 3 years.

🟢 EPS has grown at 22.7% a year over 3 years.

🔴 ROE has fallen from 17.7% to 15.0% over 3 years (-2.7 pts).

🔴 ROCE has fallen from 19.4% to 16.1% over 3 years (-3.3 pts).

🔴 Total Debt has grown at 22.5% a year over 3 years.

🟢 Free Cash Flow has grown at 42.3% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹11,371 Cr

Total Liabilities

₹3,894 Cr

Cash & Equivalents

₹108 Cr

Operating Cash Flow

₹1,735 Cr

Capex

-₹338 Cr

Shareholding (proxy)

Institutional Holding

2.8%

Insider Holding

74.8%

Corporate Actions

Dividend Rate

₹2

Ex-Dividend Date

14 Aug 2026

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

Here's What We Like About Sarda Energy & Minerals' (NSE:SARDAEN) Upcoming Dividend

Simply Wall Street, 10 AugCapital return

🟢Potentially positiveCash or shares returned to holders. A buyback is only good value if the shares were cheap when bought.

Sarda Energy & Minerals Ltd is Rated Sell

MarketsMojo, 14 Oct

Volumes soar at Sarda Energy & Minerals Ltd counter

Business Standard, 13 Aug

Sarda Energy to set up Dubai subsidiary for product trading

scanx.trade, 17 Oct

Sarda Energy shares jump 9%, turn positive for 2026 - Here are the key triggers

CNBC TV18, 13 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.

Why Sarda Energy & Minerals Share Price is Rising

Equitymaster, 27 Feb

Watch Items

Revenue growth is negative (-1.5%) 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.

DalalBaazaar Thesis

StrongBusiness Quality · Financial Health · Growth · Profitability · Valuation

MiddlingRisk

Points for each in the Score ↑

Attractive on both counts

A good business currently available at an undemanding price — the combination this framework exists to look for. The work left is qualitative: whether the advantage the numbers imply is one you can identify and expect to last. 1 high-severity red flag sits above this conclusion and should be read first.

All 5 tripwires holding · see Key things to watch ↑