Manaksia Steels (MANAKSTEEL)
CyclicalFairStock Score: 37/100 — MIXED
Score breakdown: P/E: 2/3 · ROCE: 0/2 · Growth: 2/2 · Dividend: 0/1
Key Financials
| Current Price | ₹86.12 |
| Market Cap | ₹564.38 Cr |
| P/E Ratio | 14.14 |
| ROCE | 4.06% |
| ROE | 7.5% |
| Dividend Yield | 0% |
| Profit Growth | 249.5% |
| Debt/Equity | 0.46 |
| Sales Growth | 50.6% |
| Promoter Holding | 74.75% |
| 52-Week Range | ₹45.11 — ₹122 |
| Sector | Ferrous Metals |
| Book Value | ₹49.77 |
Strengths
- Sales growth of 109.66% and profit growth of 240.82% show strong recent momentum.
- Piotroski F-Score of 7/9 suggests healthy recent financials.
- Promoter holding of 74.75% aligns owner interests.
- Debt/equity at 0.67 is manageable for a capital-intensive firm.
- Current quarter profitable: ₹9 Cr net profit on ₹298 Cr sales.
Concerns
- ROCE of only 4.06% indicates weak capital efficiency and limited moat.
- ROE of 7.50% is below the return I expect from a steel business.
- Zero dividend yield forces reliance on cyclical price appreciation.
- Trading at 1.67 times book and 15.96 times earnings; no margin of safety for a commodity cyclical.
AI Analysis
I do not chase growth in a commodity business. Steel is steel; no promoter can create a durable pricing edge in a global market. Manaksia Steels reports 109.66% sales growth and 240.82% profit growth, but I must ask from what base. The latest quarter shows ₹298 Cr sales and only ₹9 Cr net profit—roughly a 3% margin. That is thin, cyclical earnings, not franchise quality. The balance sheet is tolerable: debt/equity is 0.67, and the Piotroski score of 7 suggests recent improvement. Promoter holding of 74.75% aligns interests. But my checklist demands more. ROCE is just 4.06%, and ROE is 7.50%. For a capital-intensive steel maker, these returns are too low to compensate for cyclical risk. The stock trades at ₹80.24, over 1.6 times book value of ₹48.10, and at a P/E of 15.96. I prefer buying commodity producers at a discount, not at a premium, unless I see a structural advantage. I see none. At this price, there is little margin of safety for a company earning only 7.5% on equity. A PEG of 0.09 looks tempting, but using cyclical peak growth to compute PEG is a trap. Dividend yield is zero, so the shareholder depends entirely on the steel cycle continuing. If margins normalize, high growth will reverse quickly. This is a cyclical, not a growing franchise. I would wait for a lower price, a cleaner balance sheet, or evidence of sustainably higher returns before investing. I will remain patient.
Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer