1. At a Glance – Blink and You’ll Miss It
Scan Steels Ltd is that classic Indian secondary steel stock that quietly sits in the corner of the market, sipping chai, while everyone else chases shiny new metal stories. With a market cap of ₹185 Cr, a current price of ₹31.5, and sales of ₹798 Cr (TTM), this company is literally selling ₹4+ of steel for every ₹1 of market value. Sounds exciting? Hold that thought.
The stock is trading at 0.43× book value (book value ₹73), which in steel-land usually screams either “undervalued gem” or “value trap with commitment issues.” ROE sits at 4.32%, ROCE at 6.39%, and margins hover around mid-single digits. Basically, Scan Steels works hard, lifts heavy iron, but doesn’t flex much profit muscle.
Recent quarters show QoQ sales growth of ~9.8% and profit growth of ~10.7%, but zoom out and you’ll notice the stock is down 25% over one year and -18.6% in the last 3 months. Steel is cyclical, brutal, and emotionally unavailable — and Scan Steels behaves exactly like that.
So is this a forgotten balance-sheet bargain or just another steel company stuck in neutral gear? Let’s open the furnace and look inside.
2. Introduction – Welcome to the Secondary Steel Gym
Scan Steels Ltd was incorporated in 1990, which means it has survived liberalisation, commodity cycles, demonetisation, pandemics, and at least three steel booms that promised to change everything. That alone deserves mild respect.
The company operates as an integrated secondary steel manufacturer, producing sponge iron, MS billets, TMT bars, structurals, roofing sheets, and even fly ash bricks. If it’s heavy, grey, and used in construction, Scan Steels probably makes some version of it.
Unlike primary steel giants who dig iron ore like pirates, Scan Steels operates in the secondary steel space — tighter margins, higher sensitivity to raw material prices, but lower capital intensity. This is not a glamour business. This is “wake up at 6 AM, pray iron ore prices behave, and hope government infrastructure orders don’t get delayed” business.
The company also generates captive power, which is steel-company speak for “we don’t trust DISCOMs.” That helps a bit with cost control but doesn’t magically turn low-margin steel into champagne
economics.
If you’re expecting explosive growth, this company will politely disappoint you. If you’re looking for balance-sheet survival and steady (but boring) operations, Scan Steels might at least show up on time.
3. Business Model – WTF Do They Even Do?
Let’s explain Scan Steels like you’re smart but tired.
They buy raw materials → make sponge iron → convert it into MS billets → roll those into TMT bars and structurals → sell to construction and infrastructure players → repeat.
Product Stack (No Fancy Buzzwords Edition)
- MS Billets – Mostly for captive consumption
- TMT Bars (Shrishtii TMT) – The bread-and-butter product
- Structurals – Flats, angles, channels, rods
- PVC Coated Sheets – Roofing under “Shrishtii Roofing”
- Fly Ash Bricks – Because ESG presentations need at least one slide
Manufacturing Footprint
- 4 plants across Odisha (Rourkela) and Karnataka (Bellary)
- Bellary sponge iron unit was leased out from Dec 2022, which is management saying: “Margins are trash, let’s earn rent instead.”
Volumes (FY23)
- Billets: 166,075 MT produced
- Sponge Iron: 177,956 MT produced
- Long & Flat Products: ~101,410 MT produced
This is not a growth-at-any-cost model. This is a survive-the-cycle model.
Question for you: In a capital-hungry, cyclical industry like steel, is survival itself a competitive advantage?
4. Financials Overview – Numbers Don’t Lie, They Just Yawn
Quarterly Comparison Table (Standalone, ₹ Cr)
| Metric | Latest Qtr (Q3 FY26) | YoY Qtr (Q3 FY25) | Prev Qtr (Q2 FY26) | YoY % | QoQ % |
|---|---|---|---|---|---|
| Revenue | 191.64 | 174.51 | 132.96 | 9.8% | 44.1% |
| EBITDA | 10.42 | 9.93 | 5.68 | 5.0% | 83.5% |
| PAT | 3.10 | 2.80 | -0.25 | 10.7% | NA |
| EPS (₹) | 0.53 | 0.48 | -0.04 | 10.4% | NA |
Annualised EPS (Q3 rule):
Average EPS of Q1–Q3 FY26 = (1.71 + (-0.04)
