🧠 At a Glance
In the unsexy world of castings, Steelcast Ltd has quietly pulled a Fast & Furious franchise – underrated, industrial, and somehow keeps making money. With ROCE nearing 33%, EPS multiplying 15x in 5 years, and debt gone poof, is this Bhavnagar-based alloy beast ready for another breakout – or is the metal cooling?
1. Introduction – From Foundry to Fortune 🔩
Steelcast Ltd isn’t the kind of name you hear in drawing room conversations. But maybe you should. They don’t sell you stuff – they make the stuff that makes your stuff. From mining to defense, from Earthmovers to the oil rigs – their steel & alloy castings power heavy-duty machines across sectors.
The best part? They’ve scaled without scaling stupidity. Sales have grown at 13% CAGR over 5 years, profits at 56%. And yet, nobody’s hyping them up like a Zomato IPO.
2. WTF Do They Even Do? (Business Model)
Steelcast Ltd manufactures customized steel and alloy steel castings. Think:
- Carbon Steel
- Low Alloy Steel
- Manganese Steel
- High Alloy Steel (wear & abrasion resistant)
They serve sectors like:
- Mining & Earthmoving 🪨
- Railways 🚆
- Construction Equipment 🏗️
- Defense 🪖
- Energy (Oil & Gas) ⚡
They use sand and shell moulding processes to make over 300+ parts ranging from 2.5 kg to 2,500 kg. Basically, if your favorite machine does anything hardcore, there’s a chance Steelcast is inside it.
3. Financials – Profit, Margins, ROE, Growth 💰
| Metric | FY20 | FY21 | FY22 | FY23 | FY24 | FY25 |
|---|---|---|---|---|---|---|
| Revenue (₹ Cr) | 201 | 158 | 302 | 477 | 410 | 376 |
| Net Profit (₹ Cr) | 8 | 12 | 33 | 71 | 75 | 72 |
| EPS (₹) | 3.94 | 5.94 | 16.44 | 34.84 | 37.06 | 35.67 |
| OPM % | 19% | 20% | 21% | 24% | 29% | 28% |
| ROE % | 8% | 12% | 22% | 34% | 28% | 24% |
📈 EPS 15x from FY20 to FY25.
🔥 OPM doubled to 28%+
💥 ROCE last 3Y avg: 35%+
4. Valuation – Is It Cheap, Meh, or Crack?
- CMP: ₹1,186
- PE: 33.3x (TTM EPS ~₹35.67)
- Book Value: ₹161 ⇒ P/B = 7.37x
- Market Cap: ₹2,400 Cr
For a company growing this fast with near-zero debt, high ROCE, and consistent margins, the PE seems… justifiable? But it’s definitely not cheap.
📊 EduFair Value Range:
- If we assume FY26 EPS of ₹42–₹45 and assign:
- 20x = ₹840–₹900 (Conservative)
- 25x = ₹1,050–₹1,125 (Balanced)
- 30x = ₹1,260–₹1,350 (Aggressive)
🧮 Fair Value Range: ₹900–₹1,300
5. What’s Cooking – News, Triggers, Drama 🍿
- 🛠️ Capex done. FY25 saw cash flow into PPE and investments. Future growth without major spending possible.
- 🧾 Strong order visibility across OEMs in India + exports.
- 📜 Zero debt – no interest burden = smooth sailing.
- 🧍♂️ Low institutional holding – could change if funds discover it.
6. Balance Sheet – How Much Debt, How Many Dreams?
| Metric | FY20 | FY21 | FY22 | FY23 | FY24 | FY25 |
|---|---|---|---|---|---|---|
| Borrowings (₹ Cr) | 45 | 23 | 63 | 24 | 0 | 0 |
| Reserves (₹ Cr) | 108 | 119 | 146 | 205 | 260 | 316 |
| Cash Conversion Cycle | 150 | 244 | 230 | 78 | 111 | 152 |
✅ Debt-free by FY24
❗ Working Capital Days rising – monitor this in FY26
7. Cash Flow – Sab Number Game Hai 🧾
| Year | CFO (₹ Cr) | FCF (Approx) |
|---|---|---|
| FY23 | 107 | ~₹85 Cr |
| FY24 | 68 | ~₹44 Cr |
| FY25 | 74 | ~₹58 Cr |
💡 Healthy cash generation, reinvested smartly.
8. Ratios – Sexy or Stressy?
| Ratio | FY23 | FY24 | FY25 |
|---|---|---|---|
| ROCE % | 42 | 40 | 33 |
| ROE % | 34 | 28 | 24 |
| OPM % | 24 | 29 | 28 |
| Dividend Payout % | 28 | 19 | 20 |
Verdict: Still 🔥, just slightly less hot than peak FY23
9. P&L Breakdown – Show Me the Money 💸
- Sales dipped slightly in FY24/FY25 due to industrial slowdown, but margins held strong.
- EBITDA range: ₹100–₹110 Cr annually.
- PAT stable around ₹70–₹75 Cr zone.
10. Peer Comparison – Who Else in the Game?
| Company | ROCE % | OPM % | PE | P/B | Market Cap (Cr) |
|---|---|---|---|---|---|
| AIA Engg | 19 | 26.8 | 31 | 4.7 | ₹32,631 |
| Balu Forge | 31 | 27.2 | 37 | 7.0 | ₹7,556 |
| Happy Forgings | 19 | 28.9 | 32 | 4.8 | ₹8,783 |
| Steelcast | 33 | 28.2 | 33 | 7.4 | ₹2,401 |
Steelcast punches way above its weight vs ₹30K+ Cr peers.
11. Misc – Shareholding, Promoters, Etc.
| Category | Mar 2025 |
|---|---|
| Promoter Holding | 45% (Stable) |
| Public Holding | 54.5% |
| FII + DII | 0.5% (Tiny!) |
| No. of Shareholders | 12,209 (Flat YoY) |
👀 Still under radar of institutional money.
12. EduInvesting Verdict™
Steelcast Ltd is a stealthy compounder. It has grown profits 10x+ in 5 years, gone debt-free, and maintained premium margins in a tough industry. Valuation is no longer cheap, but it still offers high RoCE + optionality if institutions start sniffing around.
⚖️ Fair Value Range: ₹900–₹1,300
🏁 Verdict: Casting Metal, Casting Profits. But Don’t Get Burned Chasing Heat.
✍️ Written by Prashant | 📅 July 10, 2025
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