Tirupati Forge Limited

Industrials — Metal Fabrication · NSE

₹70.11−₹0.26 (−0.37%)

DalalBaazaar Score

42 / 100

🟡 Moderate

Verdict

CAUTION

Risk

High

Driven by negative free cash flow, micro-cap size, which brings thin liquidity, a very high earnings multiple, which leaves little margin for disappointment.

In simple words: The business is earning a fairly low return on the money invested in it, 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, 7:48 pm

Understanding the Business

Company site ↗

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

What does this company do?

Tirupati Forge Limited produces and sells carbon steel forged flanges, forged, and other automotive components in India.

IndustryMetal Fabrication

SectorIndustrials

Employees189

Annual revenue₹149 Cr

How does it make money?

Turns over ₹149 Cr a year. Of every ₹100 of sales, about ₹4 reaches shareholders as profit, with ₹13 left at the operating level before interest, tax and depreciation. Each of its 189 employees supports ₹78.9 lakh of revenue a year, the signature of a people-led business.

Revenue / employee₹78.9 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?Little sign of one

Returns on capital of 6.9% 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 ROE18.7%

What has been driving growth?

Sales and margins have both contributed to where profit is now. Over 3 years revenue moved +79% while net margin moved -63% 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+79%

Margin effect-63%

DalalBaazaar Score

42/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ P/E of 146.1x is demanding — it needs sustained high growth to justify
✗ P/E is 188% above its own historical median of 50.8x — expensive by its own standards
✗ P/B of 6.66x is a steep premium to book

Quality vs. Valuation

Company Quality

44/ 100

Weak

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

Valuation

23/ 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

146.1x

3Y Median

50.8x

40 monthly readings · mean 55.0x · range 8.5x–153.4x

Sector Median

12.2x

median of 4 sector peers

⚠️Current valuation is approximately 188% above its 3y median of 50.8x. 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 1101% above the peer median of 12.2x.

vs. its own history

Expensive

50.8x median over 40 months · +188%

vs. sector peers

Expensive

12.2x median of 4 peers · +1101%

vs. generic bands

Expensive

Above 35x

EV/EBITDA

48.5x

PEG

—

What's Good / What's Bad

🟢 What's Going Well1

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

🔴 What Needs Attention2

Return on equity is falling
ROE has dropped from 26.0% to 4.7% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 34.8% to 6.9% — often a sign of competition or overexpansion.

Red Flags

6 items require attention · 3 high · 3 watch

🔴Debt has risen sharplyFinancial
Total debt is up 311% over 3 years, from ₹10 Cr to ₹42 Cr.
🔴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.
🔴Significant margin compressionFinancial
EBITDA margin has fallen 6.2 points, from 19.0% to 12.8%.
🟡Interest coverage is deterioratingFinancial
Cover has fallen from 8.7x to 4.1x.
🟡Profit is decliningFinancial
Net profit is down 33% over 3 years.
🟡Shareholders have been dilutedOwnership
Shares outstanding are up 29% over 3 years — each existing share owns a smaller slice of the company.

Investment Thesis

🟢 Bull CaseWhat could make this work?

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 19.0% to 12.8%. If the trend continues, profit falls even on flat sales — and margin decline rarely reverses quickly.
The price already assumes success
The stock trades 188% 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 26.0% to 4.7%. 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
3 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 16% a year✓ 21.4% CAGR
Latest reported year was 18.0%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 11%✓ 12.8%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Debt / EBITDA stays below 2x✗ 2.2x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
4Free cash flow remains positive✗ -₹61 Cr
Profit that never becomes cash eventually stops being profit.
5ROCE stays above 8%✗ 6.9%
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

3 good · 2 neutral · 6 weak

Market Cap

₹888 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

146.1x

Expensive

Expensive — verify against sector peers

P/B Ratio

6.66x

Rich

Steep premium to book — needs high, durable returns to justify

EPS (TTM)

₹0.48

Profitable

Profitable on a per-share basis

ROE

4.7%

Weak

Weak capital efficiency

ROCE

6.9%

Weak

Low return on total capital employed

Debt/Equity

0.31x

Low

Conservative leverage

Revenue Growth (YoY)

18.0%

Healthy

Healthy top-line growth

Profit Growth (YoY)

-25.0%

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

-₹61 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

Operating Margin

6.0%

Average

Average margins

Net Margin

3.6%

Average

Average bottom-line conversion

Current Ratio

1.82

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.29

Defensive

Steadier than the market

52W Range Position

74%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

73.4 / 70.3

Bullish alignment (short > long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

28.2

Oversold zone

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹83 Cr	₹99 Cr	₹103 Cr	₹149 Cr	+21.4%
EBITDA	₹16 Cr	₹13 Cr	₹16 Cr	₹19 Cr	+6.4%
EBITDA Margin	19.0%	13.3%	15.7%	12.8%	—
PAT (Net Profit)	₹9 Cr	₹7 Cr	₹8 Cr	₹6 Cr	-12.6%
EPS	₹0.96	₹0.67	₹0.73	₹0.5	-19.5%
ROE	26.0%	13.3%	7.3%	4.7%	—
ROCE	34.8%	18.6%	9.6%	6.9%	—
Total Debt	₹10 Cr	₹13 Cr	₹26 Cr	₹42 Cr	+60.2%
Free Cash Flow	₹1 Cr	-₹5 Cr	-₹43 Cr	-₹61 Cr	—

🟢 Revenue has grown at 21.4% a year over 3 years.

🟢 EBITDA has grown at 6.4% a year over 3 years.

🔴 EBITDA Margin has fallen from 19.0% to 12.8% over 3 years (-6.2 pts).

🔴 PAT (Net Profit) has shrunk at 12.6% a year over 3 years.

🔴 EPS has shrunk at 19.5% a year over 3 years.

🔴 ROE has fallen from 26.0% to 4.7% over 3 years (-21.3 pts).

🔴 ROCE has fallen from 34.8% to 6.9% over 3 years (-27.9 pts).

🔴 Total Debt has grown at 60.2% a year over 3 years.

🔴 Free Cash Flow has turned negative, from ₹1 Cr to -₹61 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹204 Cr

Total Liabilities

₹70 Cr

Cash & Equivalents

₹6 Cr

Operating Cash Flow

₹16 Cr

Capex

-₹77 Cr

Corporate Actions

Ex-Dividend Date

12 Aug 2021

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

1 mixed5 general

Tirupati Forge Reaches ₹9.3b Market Cap Benefiting Insider Stock Buying

Simply Wall Street, 26 Sept

Tirupati Forge Share Price Outlook: Where It Could Be in 3 Years

Univest, 04 Aug

Tirupati Forge Ltd. Peer Comparison – Compare with Others

Value Research, 31 Aug

Tirupati Forge publishes corrigendum to correct EGM shareholding data

scanx.trade, 17 Jul

Why Is Tirupati Forge Share Price Surging Today? Stock Jumps Over 16% to Enter Top Gainers

Kalkine India, 29 JunPrice 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.

Compare ADITYA FORGE with

Equitymaster, 12 Oct

Watch Items

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

MiddlingFinancial Health · Growth · Risk

WeakBusiness Quality · Profitability · Valuation

Points for each in the Score ↑

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

3 of 5 tripwires tripped — Debt / EBITDA stays below 2x; Free cash flow remains positive; ROCE stays above 8% · see Key things to watch ↑