Surat Trade and Mercantile Limited

Financial Services — Capital Markets · BSE

₹4.22−₹0.05 (−1.17%)

DalalBaazaar Score

61 / 100

🟢 Good

Verdict

NEUTRAL

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, with both sales and profits growing well. Nothing obvious stands out as stretched — the usual checks on business quality and management still apply.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:57 pm

Understanding the Business

Company site ↗

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

What does this company do?

Surat Trade and Mercantile Limited engages in the commodity trading business and other commodity related activities in India. It buys and sells metal, such as gold and silver; and other products.

IndustryCapital Markets

SectorFinancial Services

Employees25

Annual revenue₹108 Cr

How does it make money?

Turns over ₹108 Cr a year. Of every ₹100 of sales, about ₹10 reaches shareholders as profit, with ₹10 left at the operating level before interest, tax and depreciation. Each of its 25 employees supports ₹4.32 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹4.32 Cr

Who are its competitors?

The closest listed comparisons in its industry are BAJAJ FINANCE LIMITED, HDFC LIFE INS CO LTD, SBI LIFE INSURANCE CO LTD. 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?Not assessable from these ratios

For a lender, returns on capital are shaped by leverage and funding cost rather than by pricing power, so the usual financial signature of an advantage does not apply. Judge this one on deposit franchise, cost of funds and asset quality — none of which are in this data.

Peer median ROE13.7%

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 +327% while net margin moved -96% 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+327%

Margin effect-96%

DalalBaazaar Score

61/ 100

Good

Weighted across six categories. Every point is explained below.

✗ ROE of 4.8% is weak
✗ ROE has fallen by 27.0 points over the period

Quality vs. Valuation

Company Quality

58/ 100

Average

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

Valuation

77/ 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

7.7x

3Y Median

9.1x

40 monthly readings · mean 10.3x · range 3.1x–22.8x

Sector Median

58.4x

median of 3 sector peers

🟢Current valuation is approximately 16% below its 3y median of 9.1x. 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 87% below the peer median of 58.4x.

vs. its own history

Fair

9.1x median over 40 months · -16%

vs. sector peers

Cheap

58.4x median of 3 peers · -87%

vs. generic bands

Cheap

Below 15x

EV/EBITDA

8.3x

PEG

0.60

What's Good / What's Bad

🟢 What's Going Well3

Margins are improving
EBITDA margin is up from -5.3% to 9.6% over 3 years.
Return on capital is rising
ROCE has improved from 1.9% to 6.1%.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention1

Return on equity is falling
ROE has dropped from 31.8% to 4.8% — each rupee of shareholder capital earns less than it did.

Red Flags

1 item require attention · 1 watch

🟡Profit is decliningFinancial
Net profit is down 82% over 3 years.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Margin expansion has further to run
EBITDA margin has risen from -5.3% to 9.6%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
Cheaper than its peers
It trades 87% 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?

Returns on shareholder capital are falling
ROE has dropped from 31.8% to 4.8%. 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

1Revenue growth stays above 47% a year✓ 62.2% CAGR
Latest reported year was 32.3%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 8%✓ 9.6%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Return on equity stays above 8%✗ 4.8%
For a lender this is the cleanest single read on whether the book is being grown profitably.
4Valuation vs its own median of 9.1x✓ 7.7x today
A re-rating above its own history needs a reason; without one it is just a higher price.

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

6 good · 3 neutral · 2 weak

Market Cap

₹94 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

7.7x

Cheap

Cheap against the generic band

P/B Ratio

0.40x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹0.55

Profitable

Profitable on a per-share basis

ROE

4.8%

Weak

Weak capital efficiency

ROCE

6.1%

Weak

Low return on total capital employed

Debt/Equity

0.69x

Moderate

Moderate leverage

Revenue Growth (YoY)

32.3%

Healthy

Healthy top-line growth

Profit Growth (YoY)

12.8%

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

₹15 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

Operating Margin

6.3%

Average

Average margins

Net Margin

9.7%

Average

Average bottom-line conversion

Current Ratio

39.76

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.77

Defensive

Steadier than the market

52W Range Position

35%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

4.5 / 4.6

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

26.3

Oversold zone

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹25 Cr	₹60 Cr	₹71 Cr	₹108 Cr	+62.2%
EBITDA	-₹1 Cr	₹14 Cr	₹4 Cr	₹10 Cr	—
EBITDA Margin	-5.3%	23.2%	5.7%	9.6%	—
PAT (Net Profit)	₹62 Cr	₹9 Cr	₹12 Cr	₹11 Cr	-44.0%
EPS	₹2.81	₹0.41	₹0.53	₹0.49	-44.1%
ROE	31.8%	4.4%	5.4%	4.8%	—
ROCE	1.9%	6.4%	4.3%	6.1%	—
Total Debt	₹0 Cr	₹2 Cr	₹2 Cr	₹2 Cr	+105.8%
Free Cash Flow	-₹6 Cr	-₹23 Cr	-₹10 Cr	₹15 Cr	—

🟢 Revenue has grown at 62.2% a year over 3 years.

🟢 EBITDA has turned positive, from -₹1 Cr to ₹10 Cr.

🟢 EBITDA Margin has risen from -5.3% to 9.6% over 3 years (+15.0 pts).

🔴 PAT (Net Profit) has shrunk at 44.0% a year over 3 years.

🔴 EPS has shrunk at 44.1% a year over 3 years.

🔴 ROE has fallen from 31.8% to 4.8% over 3 years (-27.0 pts).

🟢 ROCE has risen from 1.9% to 6.1% over 3 years (+4.2 pts).

🔴 Total Debt has grown at 105.8% a year over 3 years.

🟢 Free Cash Flow has turned positive, from -₹6 Cr to ₹15 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹233 Cr

Total Liabilities

₹5 Cr

Cash & Equivalents

₹9 Cr

Operating Cash Flow

₹18 Cr

Capex

-₹2 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

71.0%

Peer Comparison

Company	P/E	ROE
BAJAJ FINANCE LIMITED	30.2x	17.8%
HDFC LIFE INS CO LTD	58.4x	11.3%
SBI LIFE INSURANCE CO LTD	63.9x	13.7%

Recent News

1 positive1 mixed4 general

Surat Trade & Mercantile net profit rises 12% in Q1FY26

scanx.trade, 12 AugResults

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

Surat Trade & Mercantile Ltd (BSE: SURATRAML) Business Overview and Financial Snapshot

Kalkine India, 09 Sept

CFEL Stock Price and Chart — NSE:CFEL

TradingView, 18 Aug

Surat Trade & Mercantile Limited Announces Q3FY26 Financial Results for Quarter Ended December 2025

scanx.trade, 14 FebResults

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

Surat Trade & Mercantile Limited Conducts Independent Directors Meeting on March 24, 2026

scanx.trade, 24 Mar

Surat Trade re-appoints K S Jagirdar as internal auditor for FY27

scanx.trade, 26 May

Watch Items

This is a financial-sector business: borrowing is its raw material, not leverage in the usual sense. Debt/Equity and ROCE here aren't comparable to a manufacturer's — read them alongside NIM, GNPA and capital adequacy from the company's own disclosures.
Cross-check against the company's latest quarterly filing / investor presentation before acting.
RSI is in oversold territory — could mean either a bargain or a stock still falling for good reason. Check the 'why' before assuming reversal.

DalalBaazaar Thesis

StrongFinancial Health · Valuation

MiddlingBusiness Quality · Risk

WeakGrowth · Profitability

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.

1 of 4 tripwires tripped — Return on equity stays above 8% · see Key things to watch ↑