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Last Updated on: 25 June, 2024|Author: Getaka | Social: X Twitter Profile

Fundamental Analysis of Vardhman Special Steels Ltd

Basic Stock Data

Last Updated: June 19, 2024, 2:19 pm

Market Cap 2,423 Cr.
Current Price 297
High / Low345/171
Stock P/E26.4
Book Value 88.3
Dividend Yield0.68 %
ROCE17.8 %
ROE13.5 %
Face Value 10.0
PEG Ratio0.28

Competitors of Vardhman Special Steels Ltd

Stock NameMarket CapCurrent PriceHigh / LowStock P/EBook ValueDividend YieldROCEROEFace Value
Alliance Integrated Metaliks Ltd 1,080 Cr. 82.089.0/19.3 14.50.00 %%% 1.00
Industry Average1,080.00 Cr82.000.0014.500.00%0.00%0.00%1.00

Quarterly Result

MonthMar 2021Jun 2021Sep 2021Dec 2021Mar 2022Jun 2022Sep 2022Dec 2022Mar 2023Jun 2023Sep 2023Dec 2023Mar 2024
Sales334330336359343469443401422409415397439
Expenses282279290321305423408364398380384364391
Operating Profit52514639384635362429313349
OPM %16%15%14%11%11%10%8%9%6%7%8%8%11%
Other Income2332226141357689
Interest5455444554555
Depreciation10777777777779
Profit before tax40433729494138381825252944
Tax %34%35%35%34%40%25%25%25%24%26%26%25%25%
Net Profit26282419293028281419182233
EPS in Rs3.253.433.002.403.603.743.453.511.682.292.272.684.03

Last Updated: June 10, 2024, 6:55 am

Quarterly Chart

Profit & Loss - Annual Report

Last Updated: June 25, 2024, 9:14 pm

MonthMar 2013Mar 2014Mar 2015Mar 2016Mar 2017Mar 2018Mar 2019Mar 2020Mar 2021Mar 2022Mar 2023Mar 2024
Sales4403676586536748591,1218469371,3681,7351,661
Expenses4235726466106127971,0538068341,1951,5941,519
Operating Profit18-205124362626840104174141142
OPM %4%-56%2%7%9%7%6%5%11%13%8%9%
Other Income620971462913293930
Interest111220232821242620171818
Depreciation4614171822242630272831
Profit before tax8-13-154192522-266158134123
Tax %42%28%-0%0%0%0%-0%244%33%36%25%25%
Net Profit5-9-15419252234410110092
EPS in Rs0.78-1.52-2.450.683.103.513.110.415.4612.4212.3611.25
Dividend Payout %0%0%0%0%0%0%0%0%14%14%8%18%

Profit & Loss Yearly Chart

YoY Net Profit Growth

Year2013-20142014-20152015-20162016-20172017-20182018-20192019-20202020-20212021-20222022-20232023-2024
YoY Net Profit Growth (%)-280.00%-66.67%126.67%375.00%31.58%-12.00%-86.36%1366.67%129.55%-0.99%-8.00%
Change in YoY Net Profit Growth (%)0.00%213.33%193.33%248.33%-343.42%-43.58%-74.36%1453.03%-1237.12%-130.54%-7.01%

Growth

Compounded Sales Growth
10 Years:16%
5 Years:8%
3 Years:21%
TTM:-4%
Compounded Profit Growth
10 Years:20%
5 Years:33%
3 Years:28%
TTM:-9%
Stock Price CAGR
10 Years:37%
5 Years:53%
3 Years:40%
1 Year:76%
Return on Equity
10 Years:10%
5 Years:13%
3 Years:16%
Last Year:13%

Last Updated: June 20, 2024, 8:29 am

Balance Sheet

Last Updated: June 13, 2024, 8:36 am

MonthMar 2013Mar 2014Mar 2015Mar 2016Mar 2017Mar 2018Mar 2019Mar 2020Mar 2021Mar 2022Mar 2023Mar 2024
Equity Capital191919191936364041414181
Reserves177167151161180304326373419514602638
Borrowings30729535033831622833426619116214484
Other Liabilities818394979910919490153204244237
Total Liabilities5835646156146136778897708039211,0311,040
Fixed Assets41210230251265250280310283289294325
CWIP131302121733121313121
Investments1223214141805-01520-0
Other Assets289292350347346412577443507603705714
Total Assets5835646156146136778897708039211,0311,040

Reserves and Borrowings Chart

Vardhman Special Steels Ltd Cash Flow

MonthMar 2012Mar 2013Mar 2014Mar 2015Mar 2016Mar 2017Mar 2018Mar 2019Mar 2020Mar 2021Mar 2022Mar 2023
Cash from Operating Activity 1755-36-33466811-19135675974
Cash from Investing Activity -111-15452-4-16-16-16-70-887-9-15
Cash from Financing Activity 17642-3331-35-50782-45-74-52-49
Net Cash Flow82-57-16-5-522-720-29

Free Cash Flow

MonthMar 2013Mar 2014Mar 2015Mar 2016Mar 2017Mar 2018Mar 2019Mar 2020Mar 2021Mar 2022Mar 2023Mar 2024
Free Cash Flow-289.00-500.00-338.00-295.00-254.00-166.00-266.00-226.00-87.0012.00-3.0058.00

Free Cash Flow = Income Generated from Operational Activities - Borrowings - Capital Work in Progress (CWIP)

Consistent positive free cash flow is crucial for businesses as it indicates their ability to generate cash from their core operations. It provides financial flexibility, allowing companies to invest in growth opportunities, pay dividends to shareholders, reduce debt, and weather economic downturns more effectively.

Free Cash Flow Chart

Financial Efficiency Indicators

MonthMar 2013Mar 2014Mar 2015Mar 2016Mar 2017Mar 2018Mar 2019Mar 2020Mar 2021Mar 2022Mar 2023Mar 2024
Debtor Days851229910910283617887595558
Inventory Days163116119110122123170103134139119129
Days Payable474146423647894290686163
Cash Conversion Cycle200197172176188159142139131131113123
Working Capital Days134187128108921091111111091039499
ROCE %4%-3%-0%5%9%8%7%3%13%26%20%

Financial Efficiency Indicators Chart

Share Holding Pattern

MonthJun 2021Sep 2021Dec 2021Mar 2022Jun 2022Sep 2022Dec 2022Mar 2023Jun 2023Sep 2023Dec 2023Mar 2024
Promoters60.87%60.87%60.87%60.78%60.81%60.81%60.81%60.71%60.71%60.71%60.67%60.55%
FIIs0.74%0.39%0.39%0.38%0.31%0.33%0.54%1.14%1.22%0.96%0.75%0.49%
DIIs0.69%0.80%1.05%1.27%1.27%1.24%0.79%1.03%1.06%2.42%2.50%2.63%
Public37.71%37.94%37.70%37.56%37.61%37.61%37.86%37.13%37.03%35.91%36.08%36.33%
No. of Shareholders26,10431,57736,76536,34835,01333,56031,93430,12431,95131,90633,71532,866

Shareholding Pattern Chart

No. of Shareholders

Mutual Fund Holdings

Fund NameNo of SharesAUM (%)Amount Invested (Cr)Previous Number of SharesPrevious DatePercentage Change
Tata Small Cap Fund1,965,2750.6942.391,965,2752024-06-170%

ROCE Trend

EPS Trend

Key Financial Ratios

MonthMar 24Mar 23Mar 22Mar 21Mar 20
FaceValue10.0010.0010.0010.0010.00
Basic EPS (Rs.)11.2624.7624.8710.940.89
Diluted EPS (Rs.)11.1924.5924.7110.930.89
Cash EPS (Rs.)15.0531.6531.4918.377.19
Book Value[Excl.RevalReserv]/Share (Rs.)88.31158.07136.82113.40102.40
Book Value[Incl.RevalReserv]/Share (Rs.)88.31158.07136.82113.40102.40
Dividend / Share (Rs.)2.002.003.501.500.00
Revenue From Operations / Share (Rs.)203.95427.05337.38231.34209.48
PBDIT / Share (Rs.)21.1544.3249.9428.7112.16
PBIT / Share (Rs.)17.3437.4043.3021.255.79
PBT / Share (Rs.)15.0833.0639.0416.39-0.57
Net Profit / Share (Rs.)11.2524.7224.8410.910.82
PBDIT Margin (%)10.3610.3714.8012.415.80
PBIT Margin (%)8.508.7512.839.182.76
PBT Margin (%)7.397.7411.577.08-0.27
Net Profit Margin (%)5.515.787.364.710.39
Return on Networth / Equity (%)12.7315.6418.159.620.80
Return on Capital Employeed (%)18.6721.4126.6815.044.46
Return On Assets (%)8.819.7410.945.500.43
Long Term Debt / Equity (X)0.010.060.140.230.26
Total Debt / Equity (X)0.110.220.280.360.62
Asset Turnover Ratio (%)1.611.781.591.191.02
Current Ratio (X)2.382.182.272.091.47
Quick Ratio (X)1.121.051.111.260.85
Inventory Turnover Ratio (X)2.873.443.613.121.67
Dividend Payout Ratio (NP) (%)0.0014.136.030.000.00
Dividend Payout Ratio (CP) (%)0.0011.044.750.000.00
Earning Retention Ratio (%)0.0085.8793.970.000.00
Cash Earning Retention Ratio (%)0.0088.9695.250.000.00
Interest Coverage Ratio (X)9.3510.2011.725.901.91
Interest Coverage Ratio (Post Tax) (X)5.976.696.833.241.13
Enterprise Value (Cr.)1802.941752.921069.34675.15418.17
EV / Net Operating Revenue (X)1.091.010.780.720.49
EV / EBITDA (X)10.479.735.285.808.51
MarketCap / Net Operating Revenue (X)1.040.930.670.590.19
Retention Ratios (%)0.0085.8693.960.000.00
Price / BV (X)2.402.521.671.210.39
Price / Net Operating Revenue (X)1.040.930.670.590.19
EarningsYield0.050.060.100.070.02

Profitability Ratios (%)

Liquidity Ratios

Liquidity Ratios (%)

Interest Coverage Ratios (%)

Valuation Ratios

Fair Value

Fair Value: 316.84

Calculation basis:

  • Fair value = P/E Ratio * (Return on Equity / 100) * Book Value * (1 + Dividend Yield / 100)
  • P/E Ratio (Price-to-Earnings Ratio): Represents the price of the stock relative to its earnings per share. A higher P/E ratio indicates that investors are willing to pay a higher price for the stock.
  • Return on Equity (ROE): Measures a company's profitability relative to its shareholder equity. It showcases the company's ability to generate profits using the investment made by its shareholders, offering valuable insight into its operational efficiency and financial performance
  • Book Value: Represents the net asset value of the company per share. It is calculated as the total assets minus intangible assets and liabilities, divided by the number of outstanding shares.
  • Dividend Yield: The ratio of the annual dividend per share to the current market price per share. It offers valuable insights into the profitability of an investment through dividends.

This formula allows us to gauge the fair value of the stock by analyzing its fundamental indicators.

Undervalued: 6.68% compared to the current price 297

Intrinsic Value: 614.49

Calculation basis:

  • Fair value = P/E Ratio * (Return on Equity / 100) * Book Value * (1 + Dividend Yield / 100) * (1 + EPS CAGR for Last 5 Years)
  • P/E Ratio (Price-to-Earnings Ratio): Represents the price of the stock relative to its earnings per share. A higher P/E ratio indicates that investors are willing to pay a higher price for the stock.
  • Return on Equity (ROE): Measures a company's profitability relative to its shareholder equity. It showcases the company's ability to generate profits using the investment made by its shareholders, offering valuable insight into its operational efficiency and financial performance.
  • Book Value: Represents the net asset value of the company per share. It is calculated as the total assets minus intangible assets and liabilities, divided by the number of outstanding shares.
  • Dividend Yield: The ratio of the annual dividend per share to the current market price per share. It offers valuable insights into the profitability of an investment through dividends.
  • EPS CAGR (Compound Annual Growth Rate): Represents the geometric mean growth rate of earnings per share over the last 5 years. It provides insight into the historical growth trajectory of the company's earnings.

This formula allows us to gauge the fair value of the stock by analyzing its fundamental indicators along with EPS growth.

Undervalued: 106.90% compared to the current price ₹297

Last 5 Year EPS CAGR: 93.94%

*Investments are subject to market risks

Strength and Weakness

StrengthWeakness
  1. The company has higher reserves (334.33 cr) compared to borrowings (251.25 cr), indicating strong financial stability.
  2. The company has shown consistent growth in sales (453.17 cr) and profit (44.08 cr) over the years.
  1. The stock has a low average ROCE of 7.67%, which may not be favorable.
  2. The stock has a high average Working Capital Days of 115.42, which may not be favorable.
  3. The stock has a high average Cash Conversion Cycle of 155.92, which may not be favorable.

Stock Analysis

  • Considering all of the following key financial indicators, prospective investors are encouraged to conduct thorough research and seek professional guidance before considering any investment in Vardhman Special Steels Ltd:
    1. Net Profit Margin: 5.51%
      • Net Profit Margin: This metric indicates the percentage of profit a company makes from its total revenue. A higher net profit margin is generally desirable as it reflects better profitability.
    2. ROCE: 18.67% (Industry Average ROCE: 0%)
      • ROCE (Return on Capital Employed): ROCE measures a company's profitability and the efficiency with which its capital is employed. A higher ROCE indicates efficient use of capital.
    3. ROE%: 12.73% (Industry Average ROE: 0%)
      • ROE (Return on Equity): ROE measures a company's profitability relative to shareholders' equity. A higher ROE indicates efficient use of shareholders' funds.
    4. Interest Coverage Ratio (Post Tax): 5.97
      • Interest Coverage Ratio: The interest coverage ratio measures a company's ability to cover its interest payments on outstanding debt. A ratio greater than 2 is generally considered healthy as it indicates the company can meet its interest obligations comfortably.
    5. Quick Ratio: 1.12
      • Quick Ratio: The quick ratio assesses a company's ability to cover its short-term liabilities with its most liquid assets. A ratio higher than 1 suggests the company can meet its short-term obligations without relying heavily on inventory.
    6. ✗ Stock P/E: 26.4 (Industry average Stock P/E: 0)
      • Stock P/E (Price-to-Earnings) Ratio: The P/E ratio compares a company's current share price to its earnings per share. A lower P/E ratio relative to industry peers or historical values may indicate that the stock is undervalued.
    7. Total Debt / Equity: 0.11
      • Total Debt / Equity: This ratio measures a company's financial leverage by comparing its total debt to its total equity. A lower ratio indicates lower financial risk and greater financial stability.
    The current analysis is available for review. It's important to conduct thorough research and consider consulting with financial professionals before making any investment decisions.
    Stock Rating:

About the Company

Vardhman Special Steels Ltd. is a Public Limited Listed company incorporated on 14/05/2010 and has its registered office in the State of Punjab, India. Company’s Corporate Identification Number(CIN) is L27100PB2010PLC033930 and registration number is 033930. Currently Company is involved in the business activities of Manufacture of basic iron and steel. Company’s Total Operating Revenue is Rs. 1368.46 Cr. and Equity Capital is Rs. 40.56 Cr. for the Year ended 31/03/2022.
INDUSTRYADDRESSCONTACT
Steel - GeneralVardhman Premises, Chandigarh Road, Ludhiana Punjab 141010secretarial.lud@vardhman.com
http://www.vardhmansteel.com
Management
NamePosition Held
Mr. Rajeev GuptaChairman
Mr. Sachit JainVice Chairman & Mng.Director
Mr. Rajendar Kumar RewariExecutive Director
Mr. Suman ChatterjeeDirector
Mr. Toshio ItoDirector
Mrs. Vidya ShahDirector
Mr. Rakesh JainDirector
Mr. B K ChoudharyDirector
Mr. Rajinder Kumar JainDirector
Mr. Sanjoy BhattacharyyaDirector
Mrs. Suchita JainDirector
Mr. Raghav ChandraDirector
Ms. Soumya JainExecutive Director

FAQ

What is the latest fair value of Vardhman Special Steels Ltd?

The latest fair value of Vardhman Special Steels Ltd is ₹316.84.

What is the Market Cap of Vardhman Special Steels Ltd?

The Market Cap of Vardhman Special Steels Ltd is 2,423 Cr..

What is the current Stock Price of Vardhman Special Steels Ltd as on 22 June 2024?

The current stock price of Vardhman Special Steels Ltd as on 22 June 2024 is ₹297.

What is the High / Low of Vardhman Special Steels Ltd stocks in FY 2024?

In FY 2024, the High / Low of Vardhman Special Steels Ltd stocks is 345/171.

What is the Stock P/E of Vardhman Special Steels Ltd?

The Stock P/E of Vardhman Special Steels Ltd is 26.4.

What is the Book Value of Vardhman Special Steels Ltd?

The Book Value of Vardhman Special Steels Ltd is 88.3.

What is the Dividend Yield of Vardhman Special Steels Ltd?

The Dividend Yield of Vardhman Special Steels Ltd is 0.68 %.

What is the ROCE of Vardhman Special Steels Ltd?

The ROCE of Vardhman Special Steels Ltd is 17.8 %.

What is the ROE of Vardhman Special Steels Ltd?

The ROE of Vardhman Special Steels Ltd is 13.5 %.

What is the Face Value of Vardhman Special Steels Ltd?

The Face Value of Vardhman Special Steels Ltd is 10.0.

About the Author

Author Avatar
Getaka

Getaka, CFA, a financial analyst with 15 years of experience in the industry. Getaka holds an MBA degree and the Chartered Financial Analyst designation, demonstrating his profound understanding of financial analysis and investment management. Throughout his career, he has conducted numerous financial analyses and due diligence processes for companies in the industry, and has a strong track record of identifying key trends and opportunities. He leverages his expertise to deliver a thorough financial analysis of a company, encompassing its financial performance, key ratios, future prospects, and risks. Getaka is committed to providing accurate, reliable, and trustworthy information to help readers make informed decisions about their finances and investments.

Disclaimer: This article is for informational purposes only and should not be construed as financial advice. The author is not a SEBI registered financial advisor and does not have any vested interest in Vardhman Special Steels Ltd. Investors are advised to conduct their own due diligence and consult with a financial professional before making any investment decisions. The information provided in this article is based on publicly available data and the author's analysis, but it may not be comprehensive or up-to-date. The author and getaka.co.in are not responsible for any errors or omissions in the content. This article is not intended to promote any particular investment strategy or recommendation, and readers should consult with their own financial advisors before making any investment decisions. Data Source: NSE