Author: Prashant Marathe
Date Published: May 21, 2025
⚠️ At a Glance
- Revenue (Q4): ₹98.49 Cr
- Net Profit (Q4): ₹116.44 Cr (!?)
- EPS (Q4): ₹4.83
- FY25 Net Profit: ₹568.09 Cr
- Full Year EPS: ₹23.55
- CMP: ₹479
- EduFair Value: ₹470–₹520
👉 Verdict: This steel stock prints more profit than it sells steel. Literally.
🧾 What’s Going On?
Yes, you read that right — PAT > Revenue.
This isn’t a glitch. It’s because Gallantt has:
- 💰 Huge “Other Income” from investments and treasury operations
- 🔁 Real estate or asset disposal gains likely
- 📈 Possibly fair-value adjustments that blow up reported profits
So while the reported PAT is ₹116 Cr in Q4, we know this isn’t core steel operations.
🏭 About the Company
Gallantt Ispat Ltd is a fully integrated steel manufacturer making:
- Sponge iron
- TMT Bars
- Billets
- Power generation (for captive use)
They operate units in Gorakhpur (UP) and Kutch (Gujarat) — strategically placed for raw material and port access.
📊 FY25 Financials Snapshot
| Metric | Q4 FY25 | FY25 Total |
|---|---|---|
| Revenue from Ops | ₹98.49 Cr | ₹374.03 Cr |
| Net Profit | ₹116.44 Cr | ₹568.09 Cr |
| EPS (Basic) | ₹4.83 | ₹23.55 |
| Equity Capital | ₹241.28 Cr | ₹241.28 Cr |
That FY25 PAT of ₹568 Cr is 5.7x annual revenue. Clearly, bulk of the earnings came from non-operating gains.
🧠 EduInvesting Take
“Gallantt isn’t making steel money — it’s making spreadsheet money.”
This is not a manufacturing margin story. It’s:
- ✅ A company with a huge treasury
- ✅ Possibly asset revaluation
- ✅ Definitely some non-recurring gains
If these continue, the stock is undervalued.
If not, this PAT is a mirage, and you’re left holding a steel business with ~3% margin.
🧮 EduFair Value (EPS-Based)
- Full-year EPS = ₹23.55
- Assign a fair 20x P/E for stability + cash
✅ EduFair Value = ₹470–₹520
Since CMP is ₹479 — it’s fairly valued already.
⚠️ Risks
- 🧾 Overdependence on non-core income
- 🏗️ Steel sector slowdown = low core margins
- 🧮 EPS won’t repeat if revaluation/book profits disappear
- 🤫 No clear communication from management on income sources
💸 CMP vs Valuation
| Metric | Value |
|---|---|
| CMP | ₹479 |
| FY25 EPS | ₹23.55 |
| P/E at CMP | 20.3x |
| EduFair Value | ₹470–₹520 |
| Upside | Neutral |
🏁 Final Word
Gallantt’s earnings look mind-blowing — but they aren’t steel-driven. They’re balance sheet-driven.
Edu Verdict:
Great quarterly report. But unless this PAT is sustainable, this stock isn’t going anywhere fast.
📉 Buy for short-term rerating? Maybe.
🏗️ Long-term core fundamentals? Wait and track the next 2 quarters.
