1. At a Glance
Once upon a bull run, Surani Steel Tubes Ltd thought it could ride the APL Apollo wave. Today, the stock is down 72% in a year, trading at ₹79.8 – basically its 52-week low and a far cry from the ₹334 high. A 39x P/E for a company that barely makes ₹3 crore in annual PAT is like buying a second-hand auto rickshaw for Rolls Royce prices. Revenues jumped 45% TTM, but margins have been flatter than a steel sheet. And promoters? They’ve been quietly slipping out the back door – down from 53.75% to 30.84% in less than two years.
2. Introduction
Surani Steel Tubes Ltd is in the business of making and supplying mild steel pipes, hollow sections, coils, and a few other metal goodies that sound far sexier in engineering drawings than they do in real life. In the industrial products space, it plays in the ERW (Electric Resistance Welded) steel pipes market – a place where the big boys like APL Apollo dominate and the minnows fight for survival.
The company has shown bursts of revenue growth – 18% CAGR over 3 years – but its operating profit margins have been playing limbo at 0–1% recently. This is like training for the Olympics and specialising in coming last. Net profits have swung between small gains and losses, with FY25 clocking a grand total of ₹3.15 crore PAT on ₹225 crore sales – a 1.4% PAT margin.
Add to this the promoter holding slide, ballooning working capital days (103 → 171), and increased debtor days (3 → 44), and you have a business that’s growing in sales but not in shareholder confidence. On the NSE SME platform, volatility is a lifestyle, but Surani’s 16.78% single-day fall on Aug 11 shows just how quickly the market can punish a weak balance sheet and weaker trust.
3. Business Model (WTF Do They Even Do?)
Surani Steel Tubes’ bread and butter is mild steel. The product basket includes:
- ERW Mild Steel Pipes (Black, Galvanized, Structural)
- Mild Steel Tubes (Round, Square, Rectangular)
- Mild Steel Coils (Hot Rolled, Cold Rolled)
- Hollow Sections
The process: They take steel coils, run
them through forming and welding processes, cut them to length, and ship them off to distributors, construction companies, infrastructure projects, and whoever’s building things that need steel skeletons.
The problem? In the ERW steel pipe game, scale matters. Big players like APL Apollo churn out millions of tonnes with lower costs, brand pull, and credit muscle. Surani’s market positioning is more like “local supplier with a decent catalogue” rather than “national powerhouse.”
Margins are razor thin in this business unless you’re vertically integrated, have captive raw material sources, or a strong B2B brand. Surani’s financials show it’s competing more on price than innovation, and in steel, that’s a race to the bottom. Without operational leverage kicking in, revenue growth doesn’t translate to profit growth – which is exactly what the last 3 years of financial statements scream.
4. Financials Overview
TTM Snapshot:
- Revenue: ₹225 crore
- EBITDA: ₹1 crore (OPM 0.4%)
- PAT: ₹3.15 crore
- EPS: ₹0.94
Fresh P/E Calc: ₹79.8 ÷ ₹0.94 EPS = 84.89x (the 39.2x figure is outdated – the market is even more generous or delusional than the screener says).
YoY Growth:
- Sales: ₹155 crore → ₹225 crore (+45%)
- PAT: ₹0.47 crore → ₹3.15 crore (+570%) – looks great until you realise both numbers are basically rounding errors in the steel industry.
Commentary:
Margins are wafer-thin, and the only reason PAT jumped is because the base was microscopic. OPM has consistently been between 0–1% for the last three years,
