1. At a Glance
Kalyani Steels (KSL) is not your friendly neighbourhood steel reroller — it’s part of the heavyweight Kalyani Group, supplying steel for camshafts, gears, and transmission shafts that keep the auto and engineering world moving. With a ₹3,912 crore market cap, FY25 profit of ₹262 crore, and an ROCE of 15.6%, this is a company that has been quietly compounding — while also cutting debt like it’s on a keto diet. The stock trades at a modest P/E of ~14.9, but its sales growth has been more like a Sunday drive than a drag race.
2. Introduction
Founded in the era when “Make in India” wasn’t a campaign but a necessity, Kalyani Steels has grown into a specialized steel producer feeding critical sectors like automotive, engineering, and seamless tube manufacturing. Think of it as the guy supplying protein powder to the world’s mechanical muscles.
While competitors chase volume in commodity steel, KSL plays in the higher-margin, value-added niche — products like round casts for seamless tubes, rolled bars for engineering applications, and custom steel grades for industrial use. Its customer list reads like an auto parts hall of fame.
The problem? Demand cycles in steel are as moody as the monsoon, and growth has been steady but far from spectacular. Over the last five years, sales grew at 11% CAGR and profits at 13%, but in the last three years, profit growth has been basically flat. Still, a low debt-to-equity, stable dividend payout, and strong promoter commitment make it a sturdy —
if not flashy — play.
3. Business Model (WTF Do They Even Do?)
Kalyani Steels manufactures and sells specialty iron and steel products, with a product range including:
- Automotive Parts Steel: Camshafts, connecting rods, gears, axle beams, steering knuckles.
- Seamless Tube Industry: Round casts.
- Engineering Applications: Rolled bars and custom steel grades.
Unlike generic steel producers, KSL’s business is driven by relationships with OEMs and engineering companies, where specifications and quality matter as much as price. This makes the business less prone to commodity price volatility — but still dependent on industrial demand cycles.
4. Financials Overview
Recalculated P/E:
- FY25 Net Profit = ₹262 crore
- Equity Capital = ₹22 crore → Shares = 4.4 crore (FV ₹5)
- EPS = ₹59.54
- CMP ₹896 → P/E ≈ 15.05 (close to Screener’s 14.9)
Key Numbers (₹ crore):
- Revenue (FY25): 1,982 (+1.2% YoY)
- EBITDA: 373 (EBITDA Margin ~19%)
- PAT: 253 → TTM ₹262 (Net Margin ~13.3%)
- ROE: 14% | ROCE: 15.6%
- Debt: ₹438 crore (down from ₹596 crore in FY24)
