At a Glance
Ahmedabad Steelcraft Ltd, a fireproof window and door section manufacturer (yes, that’s a thing), posted an epic FY25 profit after a decade of losses, ramped up quarterly sales from ₹0.02 Cr to ₹65 Cr, and is suddenly sitting on a ₹367 Cr market cap. ROCE? 22%. ROE? 19%. Stock up 109% YoY. But… is this real? Or just another preferential-allotment-pumped illusion?
1. 🧨 Introduction with Hook
This isn’t your usual TMT bar stock.
Ahmedabad Steelcraft, a boring BSE-listed company selling steel window sections since 1992, somehow just 20x’ed its sales in 12 months, posted its first legit profit in forever, and pumped out warrants like Diwali crackers.
Retail investors are confused. Auditors resigned. CFO quit.
But the price? Up 3x in a year. Welcome to SME Bollywood 🎬
2. 🏢 Business Model – WTF Do They Even Do?
- Manufactures and exports mild steel window/door/ventilator sections (fire & termite proof)
- Custom orders per British, German, Indian standards
- 🧱 Real estate LLP investments on the side (surprise!)
- Possible future real estate expansion — hinted but not detailed
In short: legacy steel frames + side hustle in property = capital cycle drama waiting to happen.
3. 💰 Financials Overview – Profit, Margins, ROE, Growth
| Metric | FY24 | FY25 |
|---|---|---|
| Revenue (₹ Cr) | 1 | 172 |
| PAT (₹ Cr) | -2 | 11 |
| OPM | -609% | 7% |
| ROCE | -18% | 22% |
| ROE | -5% | 18.9% |
📈 TTM Profit Growth: 363%
📈 3Y Revenue CAGR: 529%
📉 Was a penny stock. Now it’s not.
But is it because of operational excellence?
Or just a masterclass in preferential placement + P&L wizardry?
4. 📊 Valuation – Is It Cheap, Meh, or Crack?
- CMP: ₹243
- P/E: 34.3x
- P/BV: 4.06x
- FY25 PAT: ₹11 Cr
- Market Cap: ₹367 Cr
🎯 Fair Value Range (FY27E PAT ₹20–25 Cr at 18–22x)
- MCap: ₹360 Cr – ₹550 Cr
- FV Per Share: ₹240 – ₹367
🚨 Stock has already priced in 2-year future growth.
5. 🧾 What’s Cooking – News, Triggers, Drama
- 💥 FY25 Q4: ₹65 Cr revenue vs ₹0.02 Cr in Q1FY24
- 🪙 Preferential warrants:
- 1.1 Cr issued at ₹72
- Converted into equity in June 2025
- 🧳 CFO + Auditor resigned in FY24 — not great optics
- 📢 Open offer made at ₹54 (then stock ran to ₹240+)
- 🏢 Corporate office revamp + new plans = unclear
This smells like a narrative + liquidity pump cycle, not pure business strength.
6. 💼 Balance Sheet – How Much Debt, How Many Dreams?
| FY25 Snapshot | ₹ Cr |
|---|---|
| Equity Capital | ₹10 Cr (up from ₹4 Cr) |
| Reserves | ₹81 Cr |
| Borrowings | Zero |
| Total Liabilities | ₹125 Cr |
| Total Assets | ₹125 Cr |
✅ Zero debt
✅ Asset-light (zero fixed assets after sale?)
⚠️ 100% growth came post-warrant dilution
7. 💵 Cash Flow – Sab Number Game Hai
| FY25 | Value |
|---|---|
| CFO | -₹77 Cr 😱 |
| CFI | +₹18 Cr |
| CFF | +₹56 Cr (warrant money) |
🧮 Business consumed cash. All liquidity came from equity funding.
Red flag for sustainability.
8. 📉 Ratios – Sexy or Stressy?
| Metric | FY25 |
|---|---|
| ROCE | 22% ✅ |
| ROE | 18.9% ✅ |
| Debtor Days | 260 (🚨 high) |
| CCC | 260 days (wild) |
| P/BV | 4.06x |
These are great return ratios, but working capital is terrible — collection issues or revenue stacking?
9. 📜 P&L Breakdown – Show Me the Money
| Quarter | Sales (₹ Cr) | PAT (₹ Cr) | OPM |
|---|---|---|---|
| Q1FY24 | ₹0.00 | ₹0.00 | — |
| Q2FY24 | ₹38.4 | ₹1.5 | 3.9% |
| Q3FY24 | ₹68.1 | ₹5.7 | 9.0% |
| Q4FY25 | ₹65.3 | ₹3.49 | 7.3% |
📈 Sudden hockey-stick growth after years of ₹1–2 Cr annual sales.
But no clarity on new customers, segments, or manufacturing shift.
10. 🧬 Peer Comparison – Who Else in the Game?
| Company | P/E | ROCE | PAT (₹ Cr) | OPM | P/B |
|---|---|---|---|---|---|
| APL Apollo | 63x | 22.8% | ₹757 Cr | 5.8% | 11.4x |
| Welspun Corp | 16x | 25.6% | ₹1,510 Cr | 11.9% | 3.2x |
| Jindal Saw | 10x | 19.3% | ₹1,473 Cr | 16.6% | 1.3x |
| Steelcraft | 34x | 22.0% | ₹11 Cr | 7.3% | 4.06x |
🧠 Way overvalued vs large caps with actual scale. But retail loves a low float rocket.
11. 🧠 Miscellaneous – Promoters, Allotments, Warnings
- Promoter Holding: 70.3% (up from 66.2% in 2023) ✅
- 🧾 Multiple warrant rounds → Equity capital more than doubled
- 🔄 Open Offer @ ₹54 → Now stock is at ₹243
- 📉 Auditor + CFO resignations in same year = 🚩🚩
Watch out for:
- Corporate governance
- Real estate entry announcements
- Any further related party transactions
12. 🧑⚖️ EduInvesting Verdict™
Ahmedabad Steelcraft is a stock market thriller:
- Dormant for years ✅
- Massive revenue spike out of nowhere ✅
- Warrants, open offers, equity dilution ✅
- CFO and auditor exits ✅
- ROCE suddenly 22% ✅
- Public loves it ✅
- Fundamentals? 🤷♂️
This is not a scam, but neither is it boring.
It walks the tightrope between turnaround story and stock manipulation suspicion.
🎯 Fair Value Range: ₹240 – ₹367 (Already in FV zone)
🧠 High risk, high drama. If you’re in — keep your stop-loss tight.
If you’re not — wait for clarity (or SEBI letters, whichever comes first 😅).
✍️ Written by Prashant | 📅 July 8, 2025
Tags: Ahmedabad Steelcraft, BSE multibagger, window section stock, preferential warrants, steel stocks, SME rally, turnaround stock, open offer, EduInvesting analysis, hidden gems or hidden traps
