VMS TMT Limited

Basic Materials — Steel · NSE

₹46.51+₹1.51 (+3.36%)

DalalBaazaar Score

48 / 100

🟡 Moderate

Verdict

NEUTRAL

Risk

High

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

In simple words: Strong business and financial position, 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, 6:59 pm

Understanding the Business

Company site ↗

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

What does this company do?

VMS TMT Limited manufactures and sells thermo-mechanically treated high-strength reinforcement steel bars in India. The company offers TMT bars under the Kamdhenu NXT brand name; and sells scrap, binding wires and billets.

IndustrySteel

SectorBasic Materials

Employees225

Annual revenue₹836 Cr

How does it make money?

Turns over ₹836 Cr a year. Of every ₹100 of sales, about ₹3 reaches shareholders as profit, with ₹7 left at the operating level before interest, tax and depreciation. Each of its 225 employees supports ₹3.72 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹3.72 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.

Compared side by side in Peers ↓

What is its competitive advantage?Some evidence

ROCE of 17.8% 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 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 -5% while net margin moved +429% 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-5%

Margin effect+429%

DalalBaazaar Score

48/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ 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

45/ 100

Average

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

Valuation

81/ 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

13.0x

1.3Y Median

15.6x

15 monthly readings · mean 15.7x · range 9.2x–27.3x

Sector Median

18.2x

median of 4 sector peers

🟢Current valuation is approximately 16% below its 1.3y median of 15.6x. 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 28% below the peer median of 18.2x.

vs. its own history

Fair

15.6x median over 15 months · -16%

vs. sector peers

Cheap

18.2x median of 4 peers · -28%

vs. generic bands

Cheap

Below 15x

EV/EBITDA

7.4x

PEG

0.18

What's Good / What's Bad

🟢 What's Going Well3

Margins are improving
EBITDA margin is up from 2.5% to 7.4% over 3 years.
Return on capital is rising
ROCE has improved from 14.2% to 17.8%.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention1

Return on equity is falling
ROE has dropped from 13.6% to 9.2% — each rupee of shareholder capital earns less than it did.

Red Flags

4 items require attention · 3 high · 1 watch

🔴Free cash flow negative for 4 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 282% against revenue up -5% — sales are being booked faster than they are collected.
🔴Inventory building faster than salesFinancial
Inventory up 116% against revenue up -5% — stock may not be moving.
🟡Debt is increasingFinancial
Total debt is up 42% over 3 years.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Margin expansion has further to run
EBITDA margin has risen from 2.5% to 7.4%. 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 28% 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?

The debt load needs earnings to hold up
Debt is 3.7x EBITDA. At that level a downturn in earnings turns a manageable balance sheet into a refinancing problem, and lenders get paid before shareholders.
Sales are being booked faster than collected
Receivables are up 282% against revenue up -5%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
Returns on shareholder capital are falling
ROE has dropped from 13.6% to 9.2%. 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.
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.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1EBITDA margin holds above 5%✓ 7.4%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Debt / EBITDA falls below 3x✗ 3.7x
Already stretched, so this is a reduction target rather than a level to hold. Around 3x is where lenders typically start attaching conditions.
3Free cash flow remains positive✗ -₹65 Cr
Profit that never becomes cash eventually stops being profit.
4Interest cover stays above 3x✗ 2.1x
How much operating profit can fall before interest stops being comfortably covered.
5ROCE stays above 15%✓ 17.8%
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

5 good · 4 neutral · 2 weak

Market Cap

₹231 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

13.0x

Cheap

Cheap against the generic band

P/B Ratio

1.01x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹3.57

Profitable

Profitable on a per-share basis

ROE

9.2%

Moderate

Moderate capital efficiency

ROCE

17.8%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

1.01x

Moderate

Moderate leverage

Revenue Growth (YoY)

16.8%

Healthy

Healthy top-line growth

Profit Growth (YoY)

-63.7%

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

-₹65 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

Operating Margin

3.9%

Weak

Thin margins leave little room for error

Net Margin

1.9%

Weak

Very little revenue reaches the bottom line

Current Ratio

1.31

Comfortable

Healthy short-term liquidity

52W Range Position

30%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

46.5 / 46.9

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

49.9

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹882 Cr	₹873 Cr	₹762 Cr	₹836 Cr	-1.8%
EBITDA	₹22 Cr	₹41 Cr	₹46 Cr	₹62 Cr	+41.8%
EBITDA Margin	2.5%	4.7%	6.1%	7.4%	—
PAT (Net Profit)	₹4 Cr	₹13 Cr	₹15 Cr	₹21 Cr	+71.2%
EPS	₹0.85	₹2.71	₹2.97	₹4.95	+80.2%
ROE	13.6%	29.0%	20.1%	9.2%	—
ROCE	14.2%	23.7%	19.2%	17.8%	—
Total Debt	₹163 Cr	₹198 Cr	₹276 Cr	₹231 Cr	+12.3%
Free Cash Flow	-₹38 Cr	-₹13 Cr	-₹80 Cr	-₹65 Cr	—

🟡 Revenue has been broadly flat over 3 years (-1.8% a year).

🟢 EBITDA has grown at 41.8% a year over 3 years.

🟢 EBITDA Margin has risen from 2.5% to 7.4% over 3 years (+4.9 pts).

🟢 PAT (Net Profit) has grown at 71.2% a year over 3 years.

🟢 EPS has grown at 80.2% a year over 3 years.

🔴 ROE has fallen from 13.6% to 9.2% over 3 years (-4.4 pts).

🟢 ROCE has risen from 14.2% to 17.8% over 3 years (+3.6 pts).

🔴 Total Debt has grown at 12.3% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹519 Cr

Total Liabilities

₹291 Cr

Cash & Equivalents

₹0 Cr

Operating Cash Flow

-₹10 Cr

Capex

-₹55 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

74.8%

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

VMS TMT LIMITED Share Price - Live NSE: VMSTMT Stock Price & Chart

Upstox, 05 May

VMS TMT Guides For Long-Term Growth Driven By Integrated Manufacturing Model

Sahi, 19 Aug

Multibagger small-cap stock under ₹50 jumps following stock market rebound

Livemint, 20 Feb

VMS TMT net profit rises 95% QoQ to ₹4.47 crore in Q1FY27

scanx.trade, 13 AugResults

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

VMS TMT Limited Announces Q4 FY26 and FY26 Results

Business Standard, 03 JunResults

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

Compare with

Equitymaster, 08 Oct

Watch Items

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

DalalBaazaar Thesis

StrongValuation

MiddlingBusiness Quality · Growth

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

3 of 5 tripwires tripped — Debt / EBITDA falls below 3x; Free cash flow remains positive; Interest cover stays above 3x · see Key things to watch ↑