Ladies and gentlemen, gather around — Stratmont Industries Ltd (BSE: 530495), the ₹184 crore market cap specialist in trading Coking Coal and Low Ash Metallurgical (LAM) Coke, just dropped its spicy Q2 FY26 results. At a current price of ₹64.4, this once high-flying stock (which kissed ₹174 not too long ago) now resembles a burnt briquette — down 63.8% in a year.
Despite the heat, the numbers are interesting. Quarterly sales came in at ₹42.76 crore — up 19.4% QoQ, but profits slid 15.9% to ₹0.37 crore. With a wafer-thin OPM of 2.39%, it’s safe to say that the “burn rate” is literal. The company’s trailing twelve-month (TTM) revenue hit ₹133 crore, with net profit around ₹1.29 crore, giving an EPS of ₹0.45 and a sky-high P/E of 142x — that’s not valuation, that’s optimism with a caffeine overdose.
Debt stands at ₹18.8 crore, ROE is 7.8%, and debt-to-equity is 0.61 — manageable, but with a current ratio of 1.55, liquidity is tighter than a coal sack at the end of the day. Promoters hold 67.6%, FIIs 27.9%, and public barely 4.5%. Basically, retail investors are the dust in the coal yard.
So, does Stratmont’s story burn bright or just fume black? Let’s dig.
2. Introduction
Once upon a fiscal year, in 1984, a company was born to trade coal — yes, literal coal — while the world moved toward solar, wind, and AI. Stratmont Industries Ltd somehow still exists, refusing to go quietly into the green revolution.
The company, with its plant in Kachchh (Gujarat), produces 36,000 metric tons per annum of Low Ash Metallurgical Coke — the fancy name for industrial-grade carbon fuel. This is the black gold that feeds steel plants, chemical factories, ferro-alloy units, and the occasional angry blast furnace.
But here’s where it gets fun — in FY21, 85% of its revenue came from “hiring income”, not coal trading. Yes, hiring. This was less “Steel tycoon” and more “Car rental in disguise.” Since then, Stratmont has tried to shed its side hustle vibes and become a serious metallurgical player, with plans for mining, steel, and even a power plant in Gujarat.
However, the past few years have been more boardroom drama than industrial triumph. Company secretaries resigned faster than interns after appraisal, and managing directors changed like WhatsApp DPs — three times in a year. Preferential allotments, share conversions, and board reshuffles turned this smallcap into a governance-themed soap opera.
Still, Stratmont survives — and in India, that’s half the victory.
3. Business Model – WTF Do They Even Do?
At its coal-black heart, Stratmont Industries Ltd deals in Coking Coal trading and LAM Coke manufacturing. Its plant in Kachchh, Gujarat, has a modest capacity of 36,000 MTPA — think of it as a boutique coke unit rather than a steel baron’s furnace.
The process is simple — import coking coal, process it into low-ash coke, and sell it to metallurgical and chemical industries. Clients include steel plants, foundries, and ferro-alloy manufacturers. Basically, anyone who loves 1000°C furnaces and hates renewable energy.
The distribution network is fairly straightforward — coke brokers, distributors, and direct supply. But the company has lately been more active in the corporate finance business of equity juggling:
2023: Converted ₹17 crore of loans into equity.
2024: Allotted 2.5 crore new shares via preferential issue.
2025: Acquired 99% of Stratmont Coal and Commodities Pvt Ltd, making it a subsidiary.
This move hints at a strategic consolidation — from trader to vertically integrated resource company. Or, as we like to call it, “coal meets cousin company.”
In theory, Stratmont aims to move into backward mining integration and forward into ferro alloys and steel — a dream many smallcaps whisper but few execute.
4. Financials Overview
Let’s break down the Q2 FY26 figures — all in ₹ crore.
Metric
Latest Qtr (Sep 2025)
YoY Qtr (Sep 2024)
Prev Qtr (Jun 2025)
YoY %
QoQ %
Revenue
42.76
35.80
38.48
+19.4%
+11.1%
EBITDA
1.02
0.94
1.44
+8.5%
-29.1%
PAT
0.37
0.44
0.68
-15.9%
-45.6%
EPS (₹)
0.13
0.15
0.24
-13.3%
-45.8%
So yes, revenue is growing, but profit is gasping. The operating margin slid to 2.39%, which is what’s left after coal dust settles. Annualized EPS (₹0.13 × 4 = ₹0.52) versus current price ₹64.4 gives a P/E of ~124x — still astronomical for a company that makes what people burn.
Interpretation: The company’s sales fire is rising, but profits are getting smoked out by costs and thin margins. It’s the kind of financial barbecue where the revenue looks juicy, but the earnings are undercooked.
5. Valuation Discussion – Fair Value Range (Educational Only)
Let’s keep this academic — not financial advice.
a) P/E Method: Industry P/E ≈ 33.6 Company EPS (annualized) ≈ ₹0.52 → Fair value = ₹0.52 × 33.6 = ₹17.47
b) EV/EBITDA Method: EV = ₹198 Cr, EBITDA (TTM) ≈ ₹4 Cr EV/EBITDA = 49.6 If re-rated to 20× (industry median), EV = 4 × 20 = ₹80 Cr Equity Value = 80 – 18.8 (debt) = ₹61.2 Cr Per share ≈ ₹21
c) DCF Approach: Assuming 15% growth, 10% discount, FCF margin 2%, projected fair range ₹20–₹25.
🎯 Educational Fair Value Range: ₹17–₹25 per share (Disclaimer:
