Bajaj Steel Inds (507944)

FairStock Score: 17/100 — RISKY

Score breakdown: P/E: 2/3 · ROCE: 1/2 · Growth: 0/2 · Dividend: 0/1

Key Financials

Strengths

• ROCE of 21.29% indicates solid underlying capital efficiency despite the downturn.
• Latest quarter remains profitable with ₹6 Cr net profit on ₹125 Cr sales, avoiding a loss.
• Headline P/E of 16.42 is not excessive if earnings power can be stabilised.
• Established revenue base of ₹125 Cr per quarter provides a platform for any recovery.

Concerns

• Sales growth is -9.26% and profit growth is -56.89%, showing clear fundamental deterioration.
• Latest quarter net margin of ~4.8% makes the headline P/E misleading; annualised profit is only ~₹24 Cr.
• Piotroski F-Score of 3/9 and FairStock Score of 16/100 signal high financial risk.
• At ₹1,773.20, near the 52-week high, with 10.75x book value and 0.24% dividend yield, there is little margin of safety.

AI Analysis

As a value investor, I first ask what a business is worth, not what the ticker has done lately. Bajaj Steel Industries is an industrial products company trading at ₹1,773.20 with a market cap of ₹3,733 Cr. The headline P/E of 16.42 looks acceptable until I look under the hood. Sales have fallen 9.26%, and profit has collapsed 56.89%. The latest quarter earned just ₹6 Cr on ₹125 Cr of sales—a net margin of roughly 4.8%. Annualised, that's only about ₹24 Cr of profit, which would put the stock at an enormous forward multiple, not 16 times. This is a classic case where trailing earnings overstate normal earning power. The Piotroski F-score of 3/9 is a red flag; it tells me the balance sheet and operating efficiency are deteriorating, not improving. The 52-week range of ₹302 to ₹1,773.20 shows a stock that has run far ahead of its fundamental evidence. A 10.75 price-to-book and 0.24% dividend yield offer no margin of safety. On the positive side, ROCE of 21.29% suggests the company can earn good returns when conditions are normal, and it has avoided a loss even in this weak quarter. But Graham would demand a margin of safety: buy a dollar for 50 cents, not pay a premium for a cyclical company whose profits are sliding. I need to see proof—several quarters of sales and profit recovery, stable margins, and a reasonable price—before I consider this a serious value candidate. Right now, this is a cyclical business being priced like a growth star, and that is not my game.

Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer