Welspun Specialty Solutions Limited

Basic Materials — Steel · NSE

₹49.84+₹1.11 (+2.28%)

DalalBaazaar Score

48 / 100

🟡 Moderate

Verdict

CAUTION

Risk

High

Driven by high debt relative to equity, 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, but sales are shrinking. Debt is the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:07 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 Welspun Specialty Solutions Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Welspun Specialty Solutions Limited manufactures and sells steel and steel products in India and internationally.

IndustrySteel

SectorBasic Materials

Employees736

Annual revenue₹870 Cr

How does it make money?

Turns over ₹870 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 736 employees supports ₹1.18 Cr of revenue a year, the signature of a capital- or asset-led business.

EBITDA margin7.2%

Net margin2.6%

Revenue / employee₹1.18 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 10.1% 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.

ROCE10.1%

ROE5.0%

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 +111% while net margin moved -178% 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+111%

Margin effect-178%

DalalBaazaar Score

48/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ P/E of 118.7x is demanding — it needs sustained high growth to justify
✗ P/B of 7.23x is a steep premium to book

Quality vs. Valuation

Company Quality

54/ 100

Average

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

Valuation

24/ 100

Expensive

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

118.7x

Sector Median

18.2x

median of 4 sector peers

⚠️Against its sector it trades 553% above the peer median of 18.2x.

vs. its own history

Not enough price and earnings history

vs. sector peers

Expensive

18.2x median of 4 peers · +553%

vs. generic bands

Expensive

Above 35x

P/E (Trailing)

118.7x

P/B

7.23x

EV/EBITDA

53.3x

PEG

—

Dividend Yield

None

What's Good / What's Bad

🟢 What's Going Well4

Debt is being paid down
Total debt is down 84% over 3 years.
Cash generation is improving
Free cash flow is up 51% over 3 years.
Return on equity is rising
ROE has improved from -46.8% to 5.0%.
Return on capital is rising
ROCE has improved from 5.4% to 10.1%.

🔴 What Needs Attention1

Receivables growing faster than sales
Receivables are up 246% against revenue growth of 111% — customers are taking longer to pay.

Red Flags

3 items require attention · 3 high

🔴High leverageFinancial
Debt/Equity of 7.69x — earnings must service borrowings before shareholders see anything.
🔴Thin interest coverageFinancial
Operating profit covers interest only 1.9x — little room if earnings dip.
🔴Receivables growing faster than salesFinancial
Receivables up 246% against revenue up 111% — sales are being booked faster than they are collected.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Deleveraging frees up earnings
Debt is down 84% over 3 years. Every rupee of interest not paid drops to the bottom line, so profit can grow even if revenue does not.

🔴 Bear CaseWhat could go wrong?

Leverage amplifies any setback
Debt/Equity of 7.69x. Interest is payable whether or not the business has a good year.
Sales are being booked faster than collected
Receivables are up 246% against revenue up 111%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
A premium to the sector to defend
It trades 553% above the peer median. That premium needs a reason that persists, or it closes.
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

1Revenue growth stays above 21% a year✓ 28.3% CAGR
Latest reported year was -3.8%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 5%✓ 7.2%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Interest cover stays above 3x✗ 1.9x
How much operating profit can fall before interest stops being comfortably covered.
4Free cash flow remains positive✓ ₹67 Cr
Profit that never becomes cash eventually stops being profit.
5Debt / EBITDA stays below 2x✓ 0.6x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.

Investment Checklist

4 / 10 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

Price history

Quick Metrics

3 good · 3 neutral · 5 weak

Market Cap

₹3,302 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

118.7x

Expensive

Expensive — verify against sector peers

P/B Ratio

7.23x

Rich

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

EPS (TTM)

₹0.42

Profitable

Profitable on a per-share basis

ROE

5.0%

Weak

Weak capital efficiency

ROCE

10.1%

Moderate

Moderate return on the capital in the business

Debt/Equity

7.69x

High

High leverage

Revenue Growth (YoY)

-3.8%

Shrinking

Sales are contracting

Profit Growth (YoY)

654.3%

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

₹67 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

CMP

₹49.84

Operating Margin

3.2%

Weak

Thin margins leave little room for error

Net Margin

3.3%

Average

Average bottom-line conversion

Current Ratio

1.42

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.64

Defensive

Steadier than the market

52W Range Position

20%

Mid-range

Technical Snapshot

RSI (14)

26.5

Oversold zone

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹412 Cr	₹681 Cr	₹713 Cr	₹870 Cr	+28.3%
EBITDA	₹28 Cr	₹72 Cr	₹52 Cr	₹62 Cr	+30.9%
EBITDA Margin	6.8%	10.5%	7.3%	7.2%	—
PAT (Net Profit)	-₹14 Cr	₹62 Cr	-₹4 Cr	₹23 Cr	—
ROE	-46.8%	67.1%	-0.9%	5.0%	—
ROCE	5.4%	25.2%	7.9%	10.1%	—
Total Debt	₹217 Cr	₹241 Cr	—	₹35 Cr	-45.5%
Free Cash Flow	₹45 Cr	-₹5 Cr	₹42 Cr	₹67 Cr	+14.6%

🟢 Revenue has grown at 28.3% a year over 3 years.

🟢 EBITDA has grown at 30.9% a year over 3 years.

🟡 EBITDA Margin has held roughly flat at 7.2% over 3 years.

🟢 PAT (Net Profit) has turned positive, from -₹14 Cr to ₹23 Cr.

🟢 ROE has risen from -46.8% to 5.0% over 3 years (+51.7 pts).

🟢 ROCE has risen from 5.4% to 10.1% over 3 years (+4.7 pts).

🟢 Total Debt has shrunk at 45.5% a year over 3 years.

🟢 Free Cash Flow has grown at 14.6% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹871 Cr

Total Liabilities

₹414 Cr

Total Debt

₹35 Cr

Cash & Equivalents

₹11 Cr

Operating Cash Flow

₹128 Cr

Capex

-₹61 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

83.6%

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

4 mixed2 general

Shareholders Will Be Pleased With The Quality of Welspun Specialty Solutions' (NSE:WELSPLSOL) Earnings

Simply Wall Street, 08 MayResults

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

Welspun Specialty Solutions | Stock Share Price Live

MarketSmith India, 13 Aug

Welspun Specialty Solutions posts Q1 FY27 profit, EBITDA doubles

scanx.trade, 19 JulResults

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

WELSPLSOL Stock Price and Chart — NSE:WELSPLSOL

TradingView, 20 Apr

Welspun Specialty share price jumps over 6% on Q3 turnaround

Business Standard, 27 JanPrice 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.

Welspun Specialty Solutions Ltd (BOM:500365) Q1 2027 Earnings Call Highlights: Strong EBITDA ...

Yahoo Finance, 23 JulResults

🟡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

Revenue growth is negative (-3.8%) 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.
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

🟡Business QualityAdequate10.2/20

🟡Financial HealthAdequate10.6/20

🟢GrowthStrong13/20

🟡ProfitabilityModerate7.1/15

🔴ValuationDemanding3.2/15

🔴RiskHigh3.9/10

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.

This thesis breaks if

✓Revenue growth stays above 21% a year28.3% CAGR
✓EBITDA margin holds above 5%7.2%
✗Interest cover stays above 3x1.9x
✓Free cash flow remains positive₹67 Cr
✓Debt / EBITDA stays below 2x0.6x