Simplex Castings Limited

Industrials — Metal Fabrication · BSE

₹129.95−₹2.45 (−1.85%)

DalalBaazaar Score

72 / 100

🟢 Good

Verdict

REASONABLE

Risk

High

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

In simple words: Strong business and financial position, with both sales and profits growing well. Cash generation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:50 pm

Understanding the Business

Company site ↗

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

What does this company do?

Simplex Castings Limited engages in the manufacture and sale of castings and equipment worldwide.

IndustryMetal Fabrication

SectorIndustrials

Employees276

Annual revenue₹203 Cr

How does it make money?

Turns over ₹203 Cr a year. Of every ₹100 of sales, about ₹10 reaches shareholders as profit, with ₹20 left at the operating level before interest, tax and depreciation. Each of its 276 employees supports ₹73.5 lakh of revenue a year, the signature of a people-led business.

Revenue / employee₹73.5 lakh

Who are its competitors?

The closest listed comparisons in its industry are TATA STEEL LIMITED, JSW STEEL LIMITED, HINDALCO INDUSTRIES LTD, VEDANTA 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?Some evidence

ROCE of 24.8% 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 ROE18.7%

What has been driving growth?

Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved +74% while net margin moved -172% 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+74%

Margin effect-172%

DalalBaazaar Score

72/ 100

Good

Weighted across six categories. Every point is explained below.

• Beta of 1.03 — 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

81/ 100

Excellent

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

Valuation

52/ 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

27.5x

2Y Median

25.1x

28 monthly readings · mean 44.4x · range 17.1x–94.9x

Sector Median

12.2x

median of 4 sector peers

🟡Currently trading close to its 2y median of 25.1x — the market is paying about what it usually pays for this company.

⚠️Against its sector it trades 126% above the peer median of 12.2x.

vs. its own history

Fair

25.1x median over 28 months · +10%

vs. sector peers

Expensive

12.2x median of 4 peers · +126%

vs. generic bands

Fair

15x–35x

EV/EBITDA

14.7x

PEG

1.12

What's Good / What's Bad

🟢 What's Going Well5

Margins are improving
EBITDA margin is up from 12.5% to 19.6% over 3 years.
Debt is being paid down
Total debt is down 24% over 3 years.
Return on equity is rising
ROE has improved from -55.7% to 18.7%.
Return on capital is rising
ROCE has improved from -18.9% to 24.8%.
High return on capital employed
ROCE of 24.8% is the mark of a business that converts capital into profit efficiently.

🔴 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

🔴Free cash flow negative for 3 yearsFinancial
The business has not covered its capital spending from operations for several years running, which has to be funded externally.
🔴Receivables growing faster than salesFinancial
Receivables up 174% against revenue up 74% — sales are being booked faster than they are collected.
🟡Shareholders have been dilutedOwnership
Shares outstanding are up 34% over 3 years — each existing share owns a smaller slice of the company.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Capital compounds at a high rate
ROCE of 24.8% 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.
Margin expansion has further to run
EBITDA margin has risen from 12.5% to 19.6%. 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 24% over 3 years. Every rupee of interest not paid drops to the bottom line, so profit can grow even if revenue does not.

🔴 Bear CaseWhat could go wrong?

Sales are being booked faster than collected
Receivables are up 174% against revenue up 74%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
A premium to the sector to defend
It trades 126% 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
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 15% a year✓ 20.3% CAGR
Latest reported year was 34.8%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 18%✓ 19.6%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Free cash flow remains positive✗ -₹6 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 1.3x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 22%✓ 24.8%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

10 / 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

6 good · 4 neutral · 1 weak

Market Cap

₹533 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

27.5x

Fair

Fairly valued against the generic band

P/B Ratio

4.32x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹4.72

Profitable

Profitable on a per-share basis

ROE

18.7%

Strong

Strong capital efficiency

ROCE

24.8%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

0.44x

Low

Conservative leverage

Revenue Growth (YoY)

34.8%

Healthy

Healthy top-line growth

Profit Growth (YoY)

24.6%

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

-₹6 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

Operating Margin

17.3%

Good

Healthy core-business profitability

Net Margin

10.7%

Good

Strong bottom-line conversion

Current Ratio

1.97

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

1.03

Market-like

Moves roughly in line with the market

52W Range Position

75%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

133.6 / 118.1

Bullish alignment (short > long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

40.9

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹117 Cr	₹122 Cr	₹171 Cr	₹203 Cr	+20.3%
EBITDA	₹15 Cr	₹15 Cr	₹30 Cr	₹40 Cr	+39.7%
EBITDA Margin	12.5%	12.3%	17.7%	19.6%	—
PAT (Net Profit)	-₹17 Cr	₹2 Cr	₹15 Cr	₹21 Cr	—
EPS	₹-5.54	₹0.78	₹4.28	₹5.64	—
ROE	-55.7%	7.2%	26.7%	18.7%	—
ROCE	-18.9%	18.4%	27.1%	24.8%	—
Total Debt	₹66 Cr	₹72 Cr	₹77 Cr	₹50 Cr	-8.6%
Free Cash Flow	₹11 Cr	-₹3 Cr	-₹5 Cr	-₹6 Cr	—

🟢 Revenue has grown at 20.3% a year over 3 years.

🟢 EBITDA has grown at 39.7% a year over 3 years.

🟢 EBITDA Margin has risen from 12.5% to 19.6% over 3 years (+7.1 pts).

🟢 PAT (Net Profit) has turned positive, from -₹17 Cr to ₹21 Cr.

🟢 EPS has turned positive, from ₹-5.54 to ₹5.64.

🟢 ROE has risen from -55.7% to 18.7% over 3 years (+74.4 pts).

🟢 ROCE has risen from -18.9% to 24.8% over 3 years (+43.8 pts).

🟢 Total Debt has shrunk at 8.6% a year over 3 years.

🔴 Free Cash Flow has turned negative, from ₹11 Cr to -₹6 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹197 Cr

Total Liabilities

₹84 Cr

Cash & Equivalents

₹1 Cr

Operating Cash Flow

₹14 Cr

Capex

-₹19 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

71.7%

Corporate Actions

Ex-Dividend Date

12 Sept 2018

Peer Comparison

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

Recent News

2 mixed4 general

Simplex Castings board to consider share split on May 28

scanx.trade, 20 May

Simplex Castings Reports Strong FY26 Growth as Railway Business Revival Gains Momentum

Business Standard, 30 May

Simplex Castings sets EGM for Oct 15 to approve ₹99.71 crore preferential issue

scanx.trade, 18 Sept

Simplex Castings Share Price Rises 8.97%: Stock Analysis

Univest, 15 SeptPrice 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.

Simplex Castings uploads Q4FY26 earnings call recording

scanx.trade, 20 AugResults

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

Simplex Castings fixes July 20 record date for share split

scanx.trade, 02 Jul

Watch Items

Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

StrongBusiness Quality · Financial Health · Growth · Profitability

MiddlingValuation

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

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