1. At a Glance
Welcome to MSP Steel & Power Ltd, where the “Power” stands for power of patience and “Steel” stands for the nerves investors need. The stock closed at ₹33.9 on 21st November 2025, down 2.25%, giving the company a market cap of ₹1,920 crore. In the last six months, the stock rose 25%, but over one year—it’s down nearly 19%. That’s the kind of return that makes you question if you’re investing or donating.
The latest quarter (Q2 FY26) turned into a Shakespearean tragedy with a net loss of ₹74.77 crore, largely due to an exceptional item of ₹100.88 crore. The management immediately announced a preferential warrant issue of ₹98 crore, because when in doubt—print shares. Sales stood at ₹677 crore, flat QoQ, while PAT sank faster than a steel anchor in the Ganges. The stock trades at a P/E of 105—because the “E” is so small it almost disappeared.
Promoter holding is 35.2%, but hold your breath—81.3% of that is pledged. Basically, if the promoters sneeze, the banks will own the factory. ROE is -3.78%, ROCE 6.43%, and debt-to-equity a mild 0.31. On paper, the company’s debt is “under control,” but we all know that “control” is relative—like your diet during Diwali.
2. Introduction
Founded in 1968, MSP Steel & Power Ltd is like that old Bollywood actor who refuses to retire—occasionally giving a hit but mostly living off nostalgia. Based in Chhattisgarh, the company produces sponge iron, billets, TMT bars, and generates power from its own integrated plant. It’s been through everything: CDR exits, OCD conversions, preferential allotments, and enough board meetings to make the BSE website crash.
In 2025, the company has been in the headlines not for record profits but for record restructuring. The September quarter saw a massive one-off item that dragged it into loss territory. Yet, management’s solution is to raise ₹98 crore via warrants—because who needs profit when you have dilution?
The funny part? Credit agencies seem optimistic. CARE upgraded it to BBB; Stable, probably because it survived another year without defaulting. But the real entertainment lies in its financial journey—a mixture of debt repayment drama, pledge panic, and promoter reshuffles that could make for an entire Netflix mini-series: “Steel, Sweat & Suspense.”
3. Business Model – WTF Do They Even Do?
MSP Steel & Power Ltd makes iron and steel products and also generates power—basically, they melt metal and burn money simultaneously. The company produces sponge iron, billets, and premium-grade TMT bars using “3-Stage Turbo Quench Technology” (which sounds like something Iron Man would use, but really it’s about cooling steel rods efficiently).
They also produce structural steel—beams, channels, and angles—because India builds a new flyover every time someone sneezes. Their ERW pipes go into everything from agriculture to construction.
Its ISO 14001:2015-certified integrated plant in Raigarh, Chhattisgarh handles the entire value chain: pelletization, sponge iron making, steel melting, rolling, and power generation. In FY23, MSP produced:
- Pellets: 10.67 lakh MT
- Sponge Iron: 3.65 lakh MT
- Billets: 3.60 lakh MT
- TMT/Structural Steel: 3.27 lakh MT
- Power: 50.7 crore kWh
The product mix is classic steel mill economics: about 67% revenue from TMT/structural, 22% from pellets, and the rest from other goods. About 69% of sales are via intermediaries,
proving that middlemen never go extinct in India—just evolve.
4. Financials Overview
| Metric | Latest Qtr (Sep 2025) | YoY Qtr (Sep 2024) | Prev Qtr (Jun 2025) | YoY % | QoQ % |
|---|---|---|---|---|---|
| Revenue | ₹677 Cr | ₹656 Cr | ₹711 Cr | 3.2% | -4.8% |
| EBITDA | ₹23 Cr | ₹27 Cr | ₹45 Cr | -15% | -49% |
| PAT | ₹-74.8 Cr | ₹-10 Cr | ₹18 Cr | Loss ↑ | Swing |
| EPS (₹) | -1.32 | -0.20 | 0.31 | NA | NA |
Commentary:
MSP’s profit graph looks like a seismograph during an earthquake. From ₹18 crore profit in June to ₹75 crore loss in September—an impressive 500% drop. EBITDA halved QoQ, and margins melted faster than a steel ingot in summer.
At a P/E of 105, this is the kind of “valuation premium” only Indian retail optimism can justify. If profits don’t recover, P/E will soon stand for Please Explain.
5. Valuation Discussion – Fair Value Range Only
Method 1: P/E-Based Approach
Industry P/E (Iron & Steel peers) ≈ 21. MSP P/E = 105 (distorted due to losses).
If normalized earnings (say ₹25 crore annual) are used → EPS ≈ ₹0.44 → Fair value at 20x = ₹9.
If cyclical recovery lifts EPS to ₹2 → Fair value = ₹40.
👉 Range: ₹9 – ₹40 per share
Method 2: EV/EBITDA
EV = ₹2,167 crore
EBITDA (TTM) = ₹134 crore
EV/EBITDA = ~16x
Industry median ≈ 8–10x →
If re-rated to 10x → EV = ₹1,340 crore → Equity value ≈ ₹1,140 crore → Fair Value ≈ ₹20 per share
Method 3: DCF (Back-of-Envelope)
Assuming FCF ≈ ₹100 crore growing 8% for 5 years at 12% discount → ₹1,650 crore value → ≈ ₹29/share
👉 Educational Fair Value Range: ₹20–₹35 per share
(For educational purposes only. Not investment advice.)
6. What’s Cooking – News, Triggers, Drama
This quarter was pure entertainment. Let’s recap:
- 14 Nov 2025: Board meeting declared a ₹74.77 crore loss (thanks to ₹100.88 crore exceptional item).
- Immediately after, company proposed preferential warrants up to ₹98 crore—classic “loss today, dilution tomorrow.”
- EGM scheduled for 12 Dec 2025—because no Indian turnaround story is complete without an extraordinary general meeting.
- CARE Ratings (Sep 2025) upgraded to BBB; Stable—apparently, survival is the new profitability.
- 15 Sep 2025: Company exited CDR after repaying consortium lenders; SBI, BoB, and IOB gave blessings.
- Multiple OCD conversions in late 2024 and early 2025 added ~7 crore new shares—so much equity dilution, even SEBI’s
