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1. At a Glance
Revenue hit ₹370 Cr in FY26, a jump from ₹311 Cr a year prior—the highest in four years. But raw number alone masks the business inside: net profit landed at ₹218 Cr, flat-ish against ₹407 Cr in FY25, because that prior year carried a one-time ₹263 Cr gain from flogging off Ferro Scrap Nigam.
The operating machine itself—stripping out the casino winnings—produced PAT of ₹221 Cr, up 23% on core earnings. EBITDA margin held steady at 59%, a sign that competition didn’t eat margins. Yet here sits the hinge: margins-first PSU in a shift. Management is exiting ferrous scrap trading (last gasps in Q4), doubling down on e-commerce platforms, and launching two untested verticals—an EPR certificate exchange and a travel-booking portal.
A ₹1,328 Cr cash pile against a ₹3,988 Cr market cap signals cushion. ROE rings in at 27%, ROCE at 30%. Debtor days of 224—still long, the working-capital tax of the trading model.
The tension: can platform fees grow without the legacy trading crutch?
2. Introduction
MSTC is a Mini-Ratna Category-I PSU born in 1964 to regulate ferrous scrap exports. The Government of India holds 64.75% after the IPO shuffle in March 2019.
For three decades the company was merchant and middleman—buying, selling, holding inventory. The 2002 pivot toward e-auctions started the real shift. By now, 93% of 9MFY26 revenue came from platform services: e-tendering, e-procurement, asset auctions for coal, minerals, scrap, real estate, telecom spectrum, and government scheme administration (UDAN, RLNG, DDUGJY, agricultural produce, forest goods, coal allocations).
The trading tail still wagged the dog into FY25. FY26 marks the moment management decided to cut it off. The company completed the sale of wholly owned subsidiary Ferro Scrap Nigam in early FY25 for ₹302 Cr net proceeds (cost basis ₹16 Cr). A full-year drag from the trading unit landed at ₹1.49 Cr revenue in FY26 and will “exit our business basket” by Q1 FY27.
Three other moves frame the pivot: partnership with EaseMyTrip for government travel tech; an agreement with Shri Mata Vaishno Devi Shrine Board to auction precious metals and ELVs; and two new-age ambitions—the EPR (Extended Producer Responsibility) certificate exchange platform and MSTC Smart Travel, a B2B portal.
3. Business Model: WTF Do They Even Do?
MSTC operates two segments: e-commerce (93% of 9MFY26) and trading/marketing (7%, exiting).
E-Commerce Segment — The money engine. The company hosts digital auctions and procurement platforms for state and central government departments, PSUs, and private clients. Revenue rolls in as transaction fees, not as spread on purchases.
The volume is staggering: ₹797 Cr in GMV (Gross Merchandise Value) moved through the platform in FY26—a proxy for how much economic value flowed through MSTC’s pipes. Coal mine block auctions (10 major auctions), mineral block auctions (200+), scrap asset sales, DGFT gold quota allocation portal (new in FY26)—all of it, plugged in.
Government pays because the math works: transparent bidding, no middleman skew, bulk allocation of scarce resources (mining concessions, spectrum). MSTC skims the transaction. Margin scales with volume, not with working capital borrowed for inventory. It’s the inverse of the trading model.
Trading / Marketing Segment — A relic. The company once bought ferrous scrap, coke, coal, iron ore, and sold on margin. Transactions backed by 110% bank guarantees from clients. Cash-intensive, thin-margin, and now unwound. ₹1.49 Cr in FY26 (down from ₹6-7 Cr prior years). Management says it’s dead by Q1 FY27.
Joint Venture: Mahindra MSTC Recycling (MMRPL, 50/50) — A subsidiary bet from 2017. Dismantles end-of-life vehicles (ELVs) and white goods into shredded scrap for steel mills. Six facilities (Kalyan, Chennai, Indore, Ahmedabad, Guwahati, Bengaluru) plus 45 collection centres. The JV bled ₹10 Cr in impairment losses two years back; by Q4 FY26 it was down to ₹1.44 Cr. Sequential improvement flagged; still not cash-positive for MSTC’s consolidated view (consolidated share of loss halved to ₹4.70 Cr from ₹5.97 Cr YoY). The path: regulatory push for formal vehicle scrappage and OEM compliance with EPR rules. It’s long-bet infrastructure, not a near-term cash driver.
4. Financials Overview
Figures are consolidated, in ₹ crore.
Metric
Mar 2026
Mar 2025
Mar 2024
YoY Change
Revenue
369.66
310.96
316.25
+18.9%
EBITDA
219.28
185.22
82.98
+18.4%
PAT
218.43
407.07
165.04
-46.4%
EPS
31.03
57.82
23.44
-46.3%
The apparent drop in PAT masks the operating reality. FY25 included an exceptional gain of ₹263 Cr from the FSNL sale. Strip that out: FY25 operating PAT was ₹144 Cr. FY26 (with no exceptional items) produced ₹218 Cr—a 51% jump on core business.
EBITDA jumped 18.4% to ₹219 Cr. OPM (Operating Profit Margin) improved to 59.4% from 59.1%, though management claimed margin “maintained… at the same level year-on-year” despite “stiff competition” and “global macroeconomic uncertainty.”
Concall note: Management flagged the exiting trading margin as a drag on absolute dollars but a lift on quality—moving from facilitation fees (7% of revenue) to platform economics (93%).
5. Market Expectations & Historical Multiples
This section describes how the market is currently pricing the company and how that compares with its own history and peer group. It is descriptive, not predictive.
Metric
Current
5-Yr Average
Peer Median
P/E
18.3
15.5
23.9
EV/EBITDA
9.3
9.7
~11–15 (varied)
ROE
26.6%
28.7%
5.0%
ROCE
30.3%
29.0%
5.95%
P/B
4.43
N/A
2.73
The market pays 18.3x earnings here versus a peer median of 23.9x for listed services and trading firms. The spread widens on operational metrics: ROE of 27% against a peer median of 5%, ROCE of 30% against 6%. The company’s balance sheet earns at rates peers do not, yet the multiple discount suggests the market is pricing in uncertainty around the business-model transition (exit from trading, launch of unproven platforms).
EV/EBITDA sits at 9.3x, below its own 5-year average of 9.7x and in the lower half of peer range. The company appears to be pricing in slower growth from core e-commerce and a wait-and-see posture on EPR and travel.
6. What’s Cooking
EPR Certificate Electronic Trading Platform (ETP) — Developed and ready. CPCB designated MSTC to
