Sharvaya Metals Limited

Basic Materials — Aluminum · BSE

₹204.00+₹9.50 (+4.88%)

DalalBaazaar Score

63 / 100

🟢 Good

Verdict

REASONABLE

Risk

Moderate

Driven by negative free cash flow, micro-cap size, which brings thin liquidity, falling profits.

In simple words: Strong business and financial position, though profits are falling even as sales grow. Cash generation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:02 pm

Understanding the Business

Company site ↗

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

What does this company do?

Sharvaya Metals Limited manufactures, exports, and supplies aluminium products in India. It offers aluminium alloyed ingots, billets, slabs, sheets, circles, and extrusion dies, as well as electric vehicle battery housing products.

IndustryAluminum

SectorBasic Materials

Employees49

Annual revenue₹230 Cr

How does it make money?

Turns over ₹230 Cr a year. Of every ₹100 of sales, about ₹5 reaches shareholders as profit, with ₹8 left at the operating level before interest, tax and depreciation. Each of its 49 employees supports ₹4.69 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹4.69 Cr

Who are its competitors?

The closest listed comparisons in its industry are HINDALCO INDUSTRIES LTD, VEDANTA LIMITED, TATA STEEL LIMITED, JSW STEEL LIMITED. 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 22.3%. Returns that high normally get competed away; when they persist, something is protecting them, and its ROE of 23.3% against a peer median of 18.7% is consistent with that. What that something is — brand, scale, switching costs, regulation — the accounts cannot tell you.

Peer median ROE18.7%

What has been driving growth?

Growth has come mainly from selling more, rather than from keeping more of each sale. Over 3 years revenue moved +228% while net margin moved +83% 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+228%

Margin effect+83%

DalalBaazaar Score

63/ 100

Good

Weighted across six categories. Every point is explained below.

✗ Micro Cap: thinner liquidity and sharper drawdowns are normal
✗ Profits have swung sharply from year to year — earnings are hard to forecast
✗ Trading within 10% of its 52-week high — entries here carry more pullback risk
✗ Negative free cash flow means dependence on external funding

Quality vs. Valuation

Company Quality

70/ 100

Good

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

Valuation

47/ 100

Fair

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

15.6x

1.3Y Median

11.9x

15 monthly readings · mean 12.4x · range 8.1x–16.7x

Sector Median

12.2x

median of 4 sector peers

⚠️Current valuation is approximately 31% above its 1.3y median of 11.9x. 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 28% above the peer median of 12.2x.

vs. its own history

Expensive

11.9x median over 15 months · +31%

vs. sector peers

Expensive

12.2x median of 4 peers · +28%

vs. generic bands

Fair

15x–35x

EV/EBITDA

11.6x

PEG

0.19

What's Good / What's Bad

🟢 What's Going Well5

Margins are improving
EBITDA margin is up from 5.3% to 8.0% over 3 years.
Debt is being paid down
Total debt is down 19% over 3 years.
High return on capital employed
ROCE of 22.3% is the mark of a business that converts capital into profit efficiently.
Very low debt
Debt/Equity of 0.16x leaves the balance sheet with plenty of headroom.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention2

Return on equity is falling
ROE has dropped from 32.0% to 15.1% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 27.4% to 22.3% — often a sign of competition or overexpansion.

Red Flags

1 item require attention · 1 watch

🟡Free cash flow is negativeFinancial
Free cash flow was -₹37 Cr in the latest year.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Capital compounds at a high rate
ROCE of 22.3% 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.
Margin expansion has further to run
EBITDA margin has risen from 5.3% to 8.0%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
Deleveraging frees up earnings
Debt is down 19% over 3 years. Every rupee of interest not paid drops to the bottom line, so profit can grow even if revenue does not.
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 price already assumes success
The stock trades 31% 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.
Returns on shareholder capital are falling
ROE has dropped from 32.0% to 15.1%. 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

1Revenue growth stays above 36% a year✓ 48.5% CAGR
Latest reported year was 96.4%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 6%✓ 8.0%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Free cash flow remains positive✗ -₹37 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 0.7x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 19%✓ 22.3%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

7 / 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 · 4 neutral · 2 weak

Market Cap

₹205 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

15.6x

Fair

Fairly valued against the generic band

P/B Ratio

2.65x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹13.11

Profitable

Profitable on a per-share basis

ROE

23.3%

Strong

Strong capital efficiency

ROCE

22.3%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

0.16x

Low

Conservative leverage

Revenue Growth (YoY)

96.4%

Healthy

Healthy top-line growth

Profit Growth (YoY)

-73.2%

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

-₹21 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

ROA

15.1%

Good

Assets are working hard

Operating Margin

2.7%

Weak

Thin margins leave little room for error

Net Margin

5.1%

Average

Average bottom-line conversion

Current Ratio

4.57

Comfortable

Healthy short-term liquidity

52W Range Position

96%

Near high

Near its 52-week high

Technical Snapshot

SMA 20 / SMA 50

160.0 / 150.6

Bullish alignment (short > long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

80.8

Overbought zone

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹70 Cr	₹71 Cr	₹113 Cr	₹230 Cr	+48.5%
EBITDA	₹4 Cr	₹4 Cr	₹19 Cr	₹18 Cr	+71.1%
EBITDA Margin	5.3%	5.0%	17.2%	8.0%	—
PAT (Net Profit)	₹2 Cr	₹2 Cr	₹12 Cr	₹12 Cr	+81.6%
EPS	₹1.94	₹1.53	₹12.19	—	—
ROE	32.0%	20.1%	53.7%	15.1%	—
ROCE	27.4%	26.5%	66.0%	22.3%	—
Total Debt	₹15 Cr	₹13 Cr	₹15 Cr	₹12 Cr	-6.6%
Free Cash Flow	₹4 Cr	₹3 Cr	-₹3 Cr	-₹37 Cr	—

🟢 Revenue has grown at 48.5% a year over 3 years.

🟢 EBITDA has grown at 71.1% a year over 3 years.

🟢 EBITDA Margin has risen from 5.3% to 8.0% over 3 years (+2.8 pts).

🟢 PAT (Net Profit) has grown at 81.6% a year over 3 years.

🔴 ROE has fallen from 32.0% to 15.1% over 3 years (-16.9 pts).

🔴 ROCE has fallen from 27.4% to 22.3% over 3 years (-5.1 pts).

🟢 Total Debt has shrunk at 6.6% a year over 3 years.

🔴 Free Cash Flow has turned negative, from ₹4 Cr to -₹37 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹99 Cr

Total Liabilities

₹22 Cr

Cash & Equivalents

₹2 Cr

Operating Cash Flow

-₹34 Cr

Capex

-₹3 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

76.3%

Peer Comparison

Company	P/E	ROE
HINDALCO INDUSTRIES LTD	12.3x	12.0%
VEDANTA LIMITED	10.4x	18.7%
TATA STEEL LIMITED	19.8x	10.8%
JSW STEEL LIMITED	12.0x	24.7%

Recent News

6 general

SHARVAYA Share Price Near One-Year High, P/E and ROE View

Univest, 14 Oct

Sharvaya Metals to raise ₹41.92 crore via share swap and warrants

scanx.trade, 15 Oct

Sharvaya Metals to buy Success Electronics in Rs 30.24 crore share swap, adds die-casting capability

Dalal Street Investment Journal, 14 Oct

SHARVAYA METALS LIMITED Share Price - Live SHARVAYA Stock Price & Chart

Upstox, 05 May

Compare GALADA TELE. with

Equitymaster, 07 Oct

SHARVAYA METALS Upper Circuit Today: Price, Data and Peers

Univest, 08 Oct

Watch Items

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

StrongFinancial Health · Growth

MiddlingBusiness Quality · Profitability · Valuation

WeakRisk

Points for each in the Score ↑

Good business at a fair price

A sound business at a reasonable valuation. Suitable for a long-term holding, with the valuation and the direction of margins worth watching rather than the business itself.

1 of 5 tripwires tripped — Free cash flow remains positive · see Key things to watch ↑