At a Glance
Mangalam Worldwide Ltd (MWL) just rolled out Q1 FY26 results, and the numbers are shinier than its stainless steel pipes. The Ahmedabad-based steel player clocked a PAT of ₹10.13 Cr, up 68% YoY, with revenue at ₹279 Cr (up 21% YoY). OPM stood at 6%, modest but consistent. The stock trades at ₹181 (P/E 17x), and with promoters holding a strong 66.5%, there’s confidence in the game. But don’t ignore the warning signs: debtor days have stretched, cash flows remain erratic, and margins barely break into double digits. Is this the next mid-cap steel star or just another cyclical shimmer? Let’s dissect.
Introduction
When steel companies usually depend on commodity price cycles, Mangalam Worldwide tries to play smarter by integrating operations—from scrap melting to seamless pipe production. Q1 FY26 numbers prove they’re not just another trader; they’re manufacturing with intent. But here’s the twist: the company’s cash flows are as unpredictable as monsoon rains, and an ongoing SEBI compliance & amalgamation process adds a regulatory subplot.
Over the last 5 years, profit CAGR is 82%, and revenue CAGR is 27%—impressive. However, debt has been creeping up, and working capital cycles are stretching, indicating that the engine runs hot and needs constant fuel. Investors love growth, but growth with leverage? That’s where debates heat up.
Business Model (WTF Do They Even Do?)
MWL is a fully integrated stainless steel manufacturer, proudly ISO-certified for everything under the sun. The company does it all:
- Melts scrap → creates billets → rolls them into pipes/tubes.
- Trades steel when manufacturing margins look thin.
- Consults (because why not throw in some advisory for good measure?).
Their primary products are stainless steel seamless pipes and tubes catering to industries like oil & gas, petrochemicals, and construction. Integration helps them control costs, but they still dance to global steel price tunes.
Financials Overview
Q1 FY26 looked healthy with sales ₹275.7 Cr, OPM 6%, and PAT ₹10.1 Cr. Net profit margin at 3.6% is modest, but YoY growth is solid.
FY25 was a blockbuster:
- Revenue: ₹1,060 Cr
- EBITDA: ₹54 Cr
- PAT: ₹29 Cr
- EPS: ₹9.9
5-year profit CAGR is 82%, and revenue CAGR is 27%, which screams expansion phase.
Commentary: The company is growing like bamboo – tall, fast, but with a hollow center (low margins).
Valuation
1. P/E Method
- EPS (FY25) = ₹9.9
- CMP ₹181 → P/E = 18x
Peers like Lloyds trade at insane multiples, but those are anomalies.
2. EV/EBITDA
- FY25 EBITDA ≈ ₹54 Cr
- EV ≈ Market Cap ₹538 Cr + Debt ₹192 Cr – Cash negligible = ₹730 Cr
- EV/EBITDA ≈ 13.5x
3. DCF (Loose)
- Assume revenue growth 15%, discount 12%, terminal 3%.
- Fair Value Range: ₹160 – ₹200
Conclusion: Stock is fairly valued, with upside dependent on margin expansion.
What’s Cooking – News, Triggers, Drama
- Q1 FY26 PAT up 68% – investors cheer.
- Amalgamation pending – potential restructuring benefits.
- SEBI compliance in focus – regulatory overhang.
- PR advisory signed – maybe prepping for market-friendly news.
- Steel price volatility – always the elephant in the room.
Balance Sheet (Standup Edition)
| Assets | ₹ Cr |
|---|---|
| Total Assets | 627 |
| Fixed Assets | 88 |
| Investments | 32 |
| Other Assets | 507 |
| Liabilities | ₹ Cr |
|---|---|
| Borrowings | 192 |
| Other Liabilities | 187 |
| Net Worth | 248 |
Remark: The balance sheet looks like a builder who keeps taking loans to add floors – impressive, but risky if the market shakes.
Cash Flow – Sab Number Game Hai
| Year | Ops (₹ Cr) | Investing (₹ Cr) | Financing (₹ Cr) |
|---|---|---|---|
| FY23 | -61 | -38 | 98 |
| FY24 | -12 | -19 | 26 |
| FY25 | -87 | -7 | 94 |
Remark: Negative operating cash flows despite profits – classic “growth eats cash” scenario.
Ratios – Sexy or Stressy?
| Metric | Value |
|---|---|
| ROE | 13.1% |
| ROCE | 14.4% |
| P/E | 17x |
| PAT Margin | 3.6% |
| D/E | 0.8x |
Remark: Ratios are okay-ish, but D/E creeping close to 1x is worth watching.
P&L Breakdown – Show Me the Money
| Year | Revenue ₹ Cr | EBITDA ₹ Cr | PAT ₹ Cr |
|---|---|---|---|
| FY23 | 644 | 19 | 17 |
| FY24 | 818 | 38 | 20 |
| FY25 | 1,060 | 54 | 29 |
| TTM | 1,107 | 58 | 34 |
Remark: Revenue climbs steadily, margins crawl slowly – classic steel story.
Peer Comparison
| Company | Rev (₹ Cr) | PAT (₹ Cr) | P/E |
|---|---|---|---|
| Lloyds Enterprises | 1,488 | 57 | 180x |
| Nupur Recyclers | 158 | 14 | 35x |
| Emergent Industrial | 796 | 3.7 | 108x |
| Mangalam Worldwide | 1,107 | 34 | 17x |
Remark: MWL trades at a sane multiple compared to overhyped peers.
Miscellaneous – Shareholding, Promoters
- Promoters: 66.5% (rock solid)
- FIIs: 0% (foreigners not impressed yet)
- Public: 33.5%
- Amalgamation & PR advisory suggest corporate grooming for investors.
EduInvesting Verdict™
Mangalam Worldwide has transformed from a small steel trader to an integrated stainless steel manufacturer with consistent growth. Profitability is improving, promoters are committed, and the company is actively restructuring for the future. However, cash flow issues, rising debt, and thin margins remain the nagging weaknesses.
SWOT
- Strengths: Integrated operations, strong promoter holding, high profit CAGR.
- Weaknesses: Negative operating cash flow, low margins, growing debt.
- Opportunities: Amalgamation benefits, export markets, stainless steel demand growth.
- Threats: Steel price cycles, regulatory overhang, SEBI scrutiny.
Final Word:
MWL is not a hype-fueled steel penny, but a solid mid-cap in the making. For investors, it’s a “growth with caution” play – rewarding if the company keeps scaling without burning too much cash.
Written by EduInvesting Team | 01 Aug 2025
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Mangalam Worldwide, Stainless Steel Manufacturer, Q1 FY26 Results, Steel Sector Analysis
