1. At a Glance – The Comeback Kid of Smallcap Steel?
₹109 crore market cap.
₹160 current price.
P/E at 9.92.
ROE at 13.7%.
Debt at a microscopic ₹1.35 crore.
Quarterly sales up 46.7% YoY.
Quarterly profit up 79.5% YoY.
Ladies and gentlemen, this is Garg Furnace Ltd, a once-bleeding steel furnace that today looks like it has discovered protein powder and a gym membership.
In Q3 FY26 (quarter ended December 2025), revenue came in at ₹92.39 crore, and PAT jumped to ₹3.68 crore. Margins are still thin like papad (OPM 3.88%), but growth is undeniable.
Stock has given:
- 10.1% return in 3 months
- -27.8% in 1 year
- 45.3% in 3 years
- 56.5% in 5 years
Translation? Volatility is its middle name.
But here’s the twist — the company just acquired 51.27% stake in Vaneera Industries for ₹36.27 crore to enter alloy steel. Promoters infused equity instead of borrowing.
Is this a disciplined steel manufacturer?
Or is this a smallcap story that just discovered capital markets?
Let’s open the furnace door and see what’s cooking.
2. Introduction – From NPA Drama to BBB- Respectability
In the past, this company’s accounts were declared NPA. Banks took symbolic possession. There were one-time settlements. Suppliers avoided them.
And today?
CRISIL says BBB-/Stable.
From “sir please extend due date” to “sir rating reaffirmed.”
That’s a transformation.
Revenue in FY25 stood at ₹262.55 crore. PAT was ₹7.64 crore. Margins modest at 2.91%.
Steel is a brutal business. It doesn’t forgive inefficiency. You either run tight working capital or you run out of oxygen.
Now Garg Furnace is:
- Expanding capacity
- Entering alloy steel
- Planning rolling mill additions
Question is — are they scaling smartly or heating the furnace too fast?
Because in steel, one wrong expansion and balance sheet melts.
3. Business Model – WTF Do They Even Do?
Let’s simplify.
They manufacture:
- Non-alloy steel round bars
- Wire rods
- Billets
Installed capacity: 40,000 tonnes per annum.
Revenue breakup FY22:
- Sale of products ~87%
- Sale of stock in trade ~13%
Product mix:
- Non-alloy steel round ~56%
- Wire rod ~21%
- Billets ~8%
- Others ~13%
Now they acquired Vaneera Industries to enter alloy steel.
Why alloy steel?
Because plain vanilla steel margins are like local tea stalls. Alloy steel? That’s the Starbucks version. Better pricing power.
But alloy steel
