Suraj Products Limited

Basic Materials — Steel · BSE

₹261.95+₹12.40 (+4.97%)

DalalBaazaar Score

48 / 100

🟡 Moderate

Verdict

NEUTRAL

Risk

Very High

Driven by high debt relative to equity, micro-cap size, which brings thin liquidity, a beta above 1.3, so it swings harder than the index.

In simple words: Reasonable but unspectacular business quality, with modest growth. Debt is the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:03 pm

Understanding the Business

Company site ↗

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

What does this company do?

Suraj Products Limited engages in the manufacture and sales of sponge iron by direct reduction of iron ore, pig iron, ingots and billet, TMT bars, and generation of power in India. It also provides quality control and support and maintenance services.

IndustrySteel

SectorBasic Materials

Annual revenue₹304 Cr

How does it make money?

Turns over ₹304 Cr a year. Of every ₹100 of sales, about ₹6 reaches shareholders as profit, with ₹10 left at the operating level before interest, tax and depreciation.

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?Little sign of one

Returns on capital of 14.4% 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.

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 +7% while net margin moved -32% 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+7%

Margin effect-32%

DalalBaazaar Score

48/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ Revenue CAGR of only 2.2% — barely ahead of inflation
✗ Profit has declined at 10.4% a year

Quality vs. Valuation

Company Quality

45/ 100

Average

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

Valuation

75/ 100

Cheap

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

14.4x

3Y Median

15.7x

40 monthly readings · mean 17.1x · range 9.2x–35.8x

Sector Median

18.2x

median of 4 sector peers

🟡Currently trading close to its 3y median of 15.7x — the market is paying about what it usually pays for this company.

🟢Against its sector it trades 21% below the peer median of 18.2x.

vs. its own history

Fair

15.7x median over 40 months · -8%

vs. sector peers

Cheap

18.2x median of 4 peers · -21%

vs. generic bands

Cheap

Below 15x

EV/EBITDA

9.4x

PEG

0.32

What's Good / What's Bad

🟢 What's Going Well2

Debt is being paid down
Total debt is down 88% over 3 years.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention2

Return on equity is falling
ROE has dropped from 25.2% to 11.3% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 30.2% to 14.4% — often a sign of competition or overexpansion.

Red Flags

4 items require attention · 2 high · 2 watch

🔴High leverageFinancial
Debt/Equity of 4.03x — earnings must service borrowings before shareholders see anything.
🔴Significant margin compressionFinancial
EBITDA margin has fallen 6.5 points, from 17.0% to 10.5%.
🟡Profit is decliningFinancial
Net profit is down 28% over 3 years.
🟡Inventory building faster than salesFinancial
Inventory up 34% against revenue up 7% — stock may not be moving.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Deleveraging frees up earnings
Debt is down 88% over 3 years. Every rupee of interest not paid drops to the bottom line, so profit can grow even if revenue does not.
Cheaper than its peers
It trades 21% below the sector median. Either the market sees a problem the numbers do not show, or the discount closes.
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?

Margins are being competed away
EBITDA margin has fallen from 17.0% to 10.5%. If the trend continues, profit falls even on flat sales — and margin decline rarely reverses quickly.
Leverage amplifies any setback
Debt/Equity of 4.03x. Interest is payable whether or not the business has a good year.
Growth barely outpaces inflation
Revenue compounding at 2.2% a year is close to the rate prices rise, so the business is gaining little ground in real terms. That leaves the share price dependent on a re-rating rather than on earnings growth.
Returns on shareholder capital are falling
ROE has dropped from 25.2% to 11.3%. 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.
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 8%✓ 10.5%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Revenue growth stays above 4% a year✗ 2.2% CAGR
Latest reported year was 8.7%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
3Free cash flow remains positive✓ ₹37 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 0.2x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 11%✓ 14.4%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

6 / 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

4 good · 6 neutral · 1 weak

Market Cap

₹299 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

14.4x

Cheap

Cheap against the generic band

P/B Ratio

1.80x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹18.22

Profitable

Profitable on a per-share basis

ROE

11.3%

Moderate

Moderate capital efficiency

ROCE

14.4%

Moderate

Moderate return on the capital in the business

Debt/Equity

4.03x

High

High leverage

Revenue Growth (YoY)

8.7%

Modest

Modest growth

Profit Growth (YoY)

44.7%

Healthy

Profits growing at a healthy clip

Dividend Yield

0.86%

Modest

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

Free Cash Flow

₹37 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

Operating Margin

9.0%

Average

Average margins

Net Margin

6.7%

Average

Average bottom-line conversion

Current Ratio

8.62

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

1.40

High swing

Swings more than the market in both directions

52W Range Position

37%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

248.6 / 249.8

Bearish alignment (short < long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

52.0

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹285 Cr	₹345 Cr	₹326 Cr	₹304 Cr	+2.2%
EBITDA	₹48 Cr	₹51 Cr	₹38 Cr	₹32 Cr	-13.1%
EBITDA Margin	17.0%	14.9%	11.5%	10.5%	—
PAT (Net Profit)	₹26 Cr	₹29 Cr	₹21 Cr	₹19 Cr	-10.4%
EPS	₹22.81	₹25.38	₹18.8	₹16.42	-10.4%
ROE	25.2%	22.2%	14.3%	11.3%	—
ROCE	30.2%	28.6%	18.8%	14.4%	—
Total Debt	₹54 Cr	₹41 Cr	₹21 Cr	₹7 Cr	-50.1%
Free Cash Flow	₹33 Cr	₹30 Cr	₹26 Cr	₹37 Cr	+4.0%

🟢 Revenue has grown at 2.2% a year over 3 years.

🔴 EBITDA has shrunk at 13.1% a year over 3 years.

🔴 EBITDA Margin has fallen from 17.0% to 10.5% over 3 years (-6.5 pts).

🔴 PAT (Net Profit) has shrunk at 10.4% a year over 3 years.

🔴 EPS has shrunk at 10.4% a year over 3 years.

🔴 ROE has fallen from 25.2% to 11.3% over 3 years (-13.9 pts).

🔴 ROCE has fallen from 30.2% to 14.4% over 3 years (-15.8 pts).

🟢 Total Debt has shrunk at 50.1% a year over 3 years.

🟢 Free Cash Flow has grown at 4.0% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹187 Cr

Total Liabilities

₹21 Cr

Cash & Equivalents

₹8 Cr

Operating Cash Flow

₹40 Cr

Capex

-₹3 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

73.7%

Corporate Actions

Dividend Rate

₹2.25

Ex-Dividend Date

04 Sept 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

Suraj Products independent director exits after tenure completion

scanx.trade, 05 Oct

Suraj Products standalone net profit rises 46.62% in the June 2026 quarter

Business Standard, 15 AugResults

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

Suraj Products Limited Announces Cessation of Gagan Goyal as Executive Director, Effective September 12, 2026

www.marketscreener.com, 05 Oct

Suraj Ltd. Share Price Near Low: Price Action and Valuation

Univest, 08 Oct

A-ONE STEELS INDIA LTD. Stock/Share price , NSE/BSE Forecast News and Live Quotes

Equitymaster, 02 Oct

Suraj Products shareholders approve capital raise and FY26 results at AGM

scanx.trade, 12 SeptResults

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

Watch Items

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

DalalBaazaar Thesis

StrongFinancial Health · Valuation

MiddlingProfitability

WeakBusiness Quality · Growth · 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.

1 of 5 tripwires tripped — Revenue growth stays above 4% a year · see Key things to watch ↑