1. At a Glance
MSTC — once just the Government’s metal scrap trader, now a PSU-flavoured e-commerce and auction powerhouse — posted Q1 FY26 revenue of ₹77 crore and a ₹42 crore profit. Margins are fatter than most traders dream of, but that’s because the business model is asset-light and fee-heavy. Add to that an8.74% dividend yield, and you’ve got a stock that’s more income machine than growth rocket.
2. Introduction
Think of MSTC as the middleman India didn’t know it needed — the Government’s go-to for selling scrap, surplus, minerals, agri-forestry products, and occasionally conducting high-profile e-auctions (coal blocks, spectrum, you name it).
It’s part scrap dealer, part auctioneer, part platform operator — and 100% under Government control. Which means stability in dividends… and unpredictability in corporate bureaucracy.
3. Business Model (WTF Do They Even Do?)
Three main streams:
- Trading/Marketing(~37% of FY22 revenue) — Facilitates bulk raw material procurement (scrap, coke, HR coil, crude oil) for secondary steel and petrochemical industries. Works on a markup.
- E-commerce Services— Online auctions and tender platforms for PSUs, Government departments, and private clients.
- Scrap Disposal & Recycling— Ferrous/non-ferrous scrap, surplus equipment, and industrial leftovers.
Revenue is skewed toward service fees rather than holding inventory — which explains the high margins.
4. Financials Overview
Quarterly Performance – YoY & QoQ
(All values in ₹ crore unless stated)
| Metric | Q1 FY26 | Q1 FY25 | Q4 FY25 | YoY % | QoQ % |
|---|---|---|---|---|---|
| Revenue | 77 | 69 | 89 | 11.59% | -13.48% |
| EBITDA* | 46 | 41 | 55 | 12.20% | -16.36% |
| PAT | 42.34 | 39.00 | 76.00 | 8.56% | -44.39% |
| EPS (₹) | 6.01 | 5.58 | 10.73 | 7.71% | -43.99% |
*EBITDA = Operating Profit (₹44 Cr) + Depreciation (₹2 Cr)
Commentary:
- YoY revenue and profit both grew in single digits — steady, but
- not fireworks.
- QoQ fall in PAT largely due to a softer “other income” quarter (Q4 had chunky one-offs).
- Annualised EPS from Q1 = ₹24.04 → At CMP ₹464, annualised P/E ≈ 19.3 (vs TTM P/E 15 due to FY25’s bumper “other income”).
5. Valuation (Fair Value RANGE only)
Method 1 – P/E
- Historical P/E ~12–18x.
- EPS annualised ₹24.04 → FV range = ₹288 – ₹433.
Method 2 – EV/EBITDA
- TTM EBITDA ≈ ₹182 Cr.
- Sector EV/EBITDA ~8–10x → EV range = ₹1,456 – ₹1,820 Cr → Per share ≈ ₹207 – ₹259.
Method 3 – DCF (Simplified)
- Base FCF ~₹150 Cr, growth 5%, discount 10%, terminal 3%.
- FV ≈ ₹250 – ₹300.
Educational FV Range: ₹207 – ₹433(For educational purposes only, not investment advice.)
6. What’s Cooking – News, Triggers, Drama
- Dividend Yield Heaven– At 8.7%, it’s basically the SBI FD your uncle wishes he could buy.
- e-Auction Contracts–
