Suraj Limited

Basic Materials — Steel · NSE

₹204.98+₹0.32 (+0.16%)

DalalBaazaar Score

38 / 100

🔴 Weak

Verdict

CAUTION

Risk

Moderate

Driven by 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. Valuation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:10 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 Suraj Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Suraj Limited manufactures and sells stainless steel seamless pipes, tubes, U tubes, flanges, and fittings in India.

IndustrySteel

SectorBasic Materials

Employees121

Annual revenue₹203 Cr

How does it make money?

Turns over ₹203 Cr a year. Of every ₹100 of sales, about ₹4 reaches shareholders as profit, with ₹10 left at the operating level before interest, tax and depreciation. Each of its 121 employees supports ₹1.68 Cr of revenue a year, the signature of a capital- or asset-led business.

EBITDA margin10.4%

Net margin3.7%

Revenue / employee₹1.68 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.

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 10.5% 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.

ROCE10.5%

ROE5.4%

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 -44% while net margin moved -33% 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-44%

Margin effect-33%

DalalBaazaar Score

38/ 100

Weak

Weighted across six categories. Every point is explained below.

✗ Revenue has contracted at 17.7% a year
✗ Profit has declined at 28.1% a year

Quality vs. Valuation

Company Quality

37/ 100

Weak

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

Valuation

35/ 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

45.3x

2Y Median

34.5x

28 monthly readings · mean 36.4x · range 26.9x–50.4x

Sector Median

18.2x

median of 4 sector peers

⚠️Current valuation is approximately 32% above its 2y median of 34.5x. 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 149% above the peer median of 18.2x.

vs. its own history

Expensive

34.5x median over 28 months · +32%

vs. sector peers

Expensive

18.2x median of 4 peers · +149%

vs. generic bands

Expensive

Above 35x

P/E (Trailing)

45.3x

P/B

2.73x

EV/EBITDA

20.7x

PEG

1.47

Dividend Yield

1.46%

What's Good / What's Bad

🟢 What's Going Well1

Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention5

Debt is rising
Total debt is up 178% over 3 years — worth checking what it funded.
Return on equity is falling
ROE has dropped from 19.4% to 5.4% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 30.9% to 10.5% — often a sign of competition or overexpansion.
Inventory building faster than sales
Inventory is up 123% against revenue growth of -44% — stock may not be moving.
Valuation above its historical average
At 45.3x the stock trades 32% above its own median of 34.5x.

Red Flags

3 items require attention · 2 high · 1 watch

🔴Debt has risen sharplyFinancial
Total debt is up 178% over 3 years, from ₹22 Cr to ₹60 Cr.
🔴Inventory building faster than salesFinancial
Inventory up 123% against revenue up -44% — stock may not be moving.
🟡Profit is decliningFinancial
Net profit is down 63% over 3 years.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Self-funding with balance-sheet headroom
Positive free cash flow of ₹8 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?

The price already assumes success
The stock trades 32% 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 19.4% to 5.4%. 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.
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

1EBITDA margin holds above 8%✓ 10.4%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Debt / EBITDA stays below 2x✗ 2.9x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
3Interest cover stays above 3x✓ 3.6x
How much operating profit can fall before interest stops being comfortably covered.
4Free cash flow remains positive✓ ₹8 Cr
Profit that never becomes cash eventually stops being profit.
5ROCE stays above 8%✓ 10.5%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

5 / 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 · 4 neutral · 3 weak

Market Cap

₹376 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

45.3x

Expensive

Expensive — verify against sector peers

P/B Ratio

2.73x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹4.52

Profitable

Profitable on a per-share basis

ROE

5.4%

Weak

Weak capital efficiency

ROCE

10.5%

Moderate

Moderate return on the capital in the business

Debt/Equity

0.44x

Low

Conservative leverage

Revenue Growth (YoY)

-22.5%

Shrinking

Sales are contracting

Profit Growth (YoY)

30.9%

Healthy

Profits growing at a healthy clip

Dividend Yield

1.46%

Modest

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

Free Cash Flow

₹8 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

CMP

₹204.98

Operating Margin

12.9%

Average

Average margins

Net Margin

4.3%

Average

Average bottom-line conversion

Current Ratio

1.35

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.36

Defensive

Steadier than the market

52W Range Position

16%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

197.4 / 204.1

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

53.6

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹364 Cr	₹330 Cr	₹231 Cr	₹203 Cr	-17.7%
EBITDA	₹40 Cr	₹43 Cr	₹33 Cr	₹21 Cr	-19.3%
EBITDA Margin	11.0%	13.1%	14.5%	10.4%	—
PAT (Net Profit)	₹20 Cr	₹22 Cr	₹13 Cr	₹7 Cr	-28.1%
EPS	₹10.69	₹11.72	₹7.24	₹4.07	-27.5%
ROE	19.4%	17.6%	10.0%	5.4%	—
ROCE	30.9%	27.5%	17.0%	10.5%	—
Total Debt	₹22 Cr	₹34 Cr	₹64 Cr	₹60 Cr	+40.7%
Free Cash Flow	₹26 Cr	₹6 Cr	-₹24 Cr	₹8 Cr	-33.0%

🔴 Revenue has shrunk at 17.7% a year over 3 years.

🔴 EBITDA has shrunk at 19.3% a year over 3 years.

🟡 EBITDA Margin has held roughly flat at 10.4% over 3 years.

🔴 PAT (Net Profit) has shrunk at 28.1% a year over 3 years.

🔴 EPS has shrunk at 27.5% a year over 3 years.

🔴 ROE has fallen from 19.4% to 5.4% over 3 years (-14.0 pts).

🔴 ROCE has fallen from 30.9% to 10.5% over 3 years (-20.4 pts).

🔴 Total Debt has grown at 40.7% a year over 3 years.

🔴 Free Cash Flow has shrunk at 33.0% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹226 Cr

Total Liabilities

₹88 Cr

Total Debt

₹60 Cr

Cash & Equivalents

₹0 Cr

Operating Cash Flow

₹17 Cr

Capex

-₹10 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

82.8%

Corporate Actions

Dividend Rate

₹3

Ex-Dividend Date

23 Jan 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 mixed5 general

Suraj Industries Ltd Partly Paid-up Share Price

Business Today, 15 Oct

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

Univest, 08 Oct

Why Suraj Estate Developers Limited (NSE:SURAJEST) Could Be Worth Watching

Simply Wall Street, 03 Jun

Suraj Industries Ltd. Shareholding Pattern – Promoters, FIIs & DIIs

Value Research, 29 Aug

Suraj Estate Developers shares jumps 16% on acquiring land with GDV of Rs 100cr

Moneycontrol.com, 16 AprPrice 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.

Suraj Ltd Share: Bull Case vs Bear Case for 2026

Univest, 25 Sept

Watch Items

Revenue growth is negative (-22.5%) 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

🔴Business QualityWeak7.5/20

🟢Financial HealthStrong13.4/20

🔴GrowthWeak2.4/20

🔴ProfitabilityWeak4.6/15

🔴ValuationDemanding4.9/15

🟡RiskModerate5.2/10

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

This thesis breaks if

✓EBITDA margin holds above 8%10.4%
✗Debt / EBITDA stays below 2x2.9x
✓Interest cover stays above 3x3.6x
✓Free cash flow remains positive₹8 Cr
✓ROCE stays above 8%10.5%