1. At a Glance – When Steel Melts, So Do Profits?
Market cap: ₹939 Cr.
Current price: ₹736.
3-month return: -16.8%.
Stock P/E: 19.
ROCE: 31.6%.
Debt: ₹1,170 Cr.
Book value: ₹-121.
And now the spicy part — Q3 FY26 revenue stands at ₹904 Cr. But PAT? A cool -₹35 Cr. Yes, negative.
Operating margin has slipped into negative territory at -3% in the latest quarter. Meanwhile, auditors have qualified results citing ₹1,356.71 Cr of unprovided interest. That number alone is bigger than the company’s entire market cap.
So what exactly are we looking at?
A 65% market share leader in induction melting equipment.
A steel division that once grew 44% in FY24.
An EV segment that contributes less than 1%.
And a balance sheet that reads like a crime thriller.
Ladies and gentlemen, welcome to Electrotherm — where furnaces are hot, but the financials are hotter.
2. Introduction – From Steel Champion to Courtroom Drama
Founded in 1983, Electrotherm operates in three areas: Engineering & Technologies, Special Steel, and Electric Vehicles. On paper, that sounds diversified. In reality, 75% of revenue comes from Special Steel.
They command over 65% market share in induction melting equipment in India. Installed 7,000+ furnaces domestically and 800+ globally. That’s serious engineering muscle.
But here’s the twist.
The company was declared a willful defaulter after defaulting on ₹2,675+ Cr loans in FY11-FY12. There is a pending CBI chargesheet against the company and directors. Enforcement Directorate actions. Loan settlements under OTS. Auditor qualifications. CFO resignations.
If corporate governance was a Bollywood genre, this would be a full-scale masala film.
And yet — ROCE is 31.6%. Steel division grew 44% in FY24. Debt reduced from ~₹2,300 Cr in FY20 to ₹1,170 Cr in Sep 2025.
Is this a phoenix rising? Or a phoenix running from bankers?
Let’s dig deeper.
3. Business Model – WTF Do They Even Do?
1) Special Steel Division (74.6% revenue in Q1 FY25)
This is the bread and butter.
They manufacture:
- TMT bars
- Ductile iron pipes
- Epoxy coated BIS-approved TMT
Capacity: 0.7 MTPA.
FY24 steel division growth: 44%.
So essentially — they melt scrap using induction furnaces (which they also manufacture) and convert it into steel products.
