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Last Updated on: 24 February, 2024|Author: Getaka | Social: X Twitter Profile

Fundamental Analysis of Vardhman Special Steels Ltd

About the Company - Vardhman Special Steels Ltd

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

Vardhman Special Steels Ltd. Share Price Update

Share PriceValue
Today₹208.50
Previous Day₹210.25

Basic Stock Data of Vardhman Special Steels Ltd

Market Cap 1,700 Cr.
Current Price 209
High / Low252/159
Stock P/E23.4
Book Value 81.6
Dividend Yield0.96 %
ROCE20.2 %
ROE16.8 %
Face Value 10.0

Data Source: screener.in

Competitors of Vardhman Special Steels Ltd

Stock NameMarket CapCurrent PriceHigh / LowStock P/EBook ValueDividend YieldROCEROEFace Value
Industry Average0 Cr0000%0%0%0

Vardhman Special Steels Ltd Quarterly Results

MonthDec 2020Mar 2021Jun 2021Sep 2021Dec 2021Mar 2022Jun 2022Sep 2022Dec 2022Mar 2023Jun 2023Sep 2023Dec 2023
Sales288334330336359343469443401422409415397
Expenses248282279290321305423408364398380384364
Operating Profit39525146393846353624293133
OPM %14%16%15%14%11%11%10%8%9%6%7%8%8%
Other Income3233222614135768
Interest5545544455455
Depreciation71077777777777
Profit before tax31404337294941383818252529
Tax %30%34%35%35%34%40%25%25%25%24%26%26%25%
Net Profit22262824192930282814191822
EPS in Rs2.683.253.433.002.403.603.743.453.511.682.292.272.68

Vardhman Special Steels Ltd Quarterly Chart

Vardhman Special Steels Ltd Profit & Loss

MonthMar 2012Mar 2013Mar 2014Mar 2015Mar 2016Mar 2017Mar 2018Mar 2019Mar 2020Mar 2021Mar 2022Mar 2023TTM
Sales5204403676586536748591,1218469371,3681,7351,644
Expenses4704235726466106127971,0538068341,1951,5941,526
Operating Profit5018-205124362626840104174141118
OPM %10%4%-56%2%7%9%7%6%5%11%13%8%7%
Other Income2620971462913293926
Interest7111220232821242620171818
Depreciation44614171822242630272829
Profit before tax428-13-154192522-26615813497
Tax %38%42%28%-0%0%0%0%-0%244%33%36%25%
Net Profit265-9-15419252234410110073
EPS in Rs4.190.78-1.52-2.450.683.103.513.110.415.4612.4212.368.92
Dividend Payout %0%0%0%0%0%0%0%0%0%14%14%8%

Vardhman Special Steels Ltd Profit & Loss Yearly Chart

YoY Net Profit Growth
Year2012-20132013-20142014-20152015-20162016-20172017-20182018-20192019-20202020-20212021-20222022-2023
YoY Net Profit Growth (%)-80.77%-280.00%-66.67%126.67%375.00%31.58%-12.00%-86.36%1366.67%129.55%-0.99%
Change in YoY Net Profit Growth (%)0.00%-199.23%213.33%193.33%248.33%-343.42%-43.58%-74.36%1453.03%-1237.12%-130.54%

Vardhman Special Steels Ltd Growth

Compounded Sales Growth
10 Years:15%
5 Years:15%
3 Years:27%
TTM:-1%
Compounded Profit Growth
10 Years:40%
5 Years:34%
3 Years:271%
TTM:-37%
Stock Price CAGR
10 Years:42%
5 Years:36%
3 Years:46%
1 Year:24%
Return on Equity
10 Years:8%
5 Years:12%
3 Years:16%
Last Year:17%

Vardhman Special Steels Ltd Balance Sheet

MonthMar 2012Mar 2013Mar 2014Mar 2015Mar 2016Mar 2017Mar 2018Mar 2019Mar 2020Mar 2021Mar 2022Mar 2023Sep 2023
Equity Capital19191919191936364041414181
Reserves172177167151161180304326373419514602582
Borrowings244307295350338316228334266191162144170
Other Liabilities36818394979910919490153204244252
Total Liabilities4715835646156146136778897708039211,0311,085
Fixed Assets4341210230251265250280310283289294305
CWIP91313021217331213131218
Investments9912232141418050152050
Other Assets320289292350347346412577443507603705713
Total Assets4715835646156146136778897708039211,0311,085

Vardhman Special Steels Ltd 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

Vardhman Special Steels Ltd Financial Efficiency Indicators

MonthMar 2012Mar 2013Mar 2014Mar 2015Mar 2016Mar 2017Mar 2018Mar 2019Mar 2020Mar 2021Mar 2022Mar 2023
Debtor Days748512299109102836178875955
Inventory Days115163116119110122123170103134139119
Days Payable134741464236478942906861
Cash Conversion Cycle176200197172176188159142139131131113
Working Capital Days1321341871281089210911111110910394
ROCE %15%4%-3%-0%5%9%8%7%3%13%26%20%

Vardhman Special Steels Ltd Financial Efficiency Indicators Chart

Vardhman Special Steels Ltd Share Holding Pattern

MonthMar 2021Jun 2021Sep 2021Dec 2021Mar 2022Jun 2022Sep 2022Dec 2022Mar 2023Jun 2023Sep 2023Dec 2023
Promoters60.73%60.87%60.87%60.87%60.78%60.81%60.81%60.81%60.71%60.71%60.71%60.67%
FIIs0.00%0.74%0.39%0.39%0.38%0.31%0.33%0.54%1.14%1.22%0.96%0.75%
DIIs6.86%0.69%0.80%1.05%1.27%1.27%1.24%0.79%1.03%1.06%2.42%2.50%
Public32.42%37.71%37.94%37.70%37.56%37.61%37.61%37.86%37.13%37.03%35.91%36.08%
No. of Shareholders18,21426,10431,57736,76536,34835,01333,56031,93430,12431,95131,90633,715

Vardhman Special Steels Ltd Shareholding Pattern Chart

No. of Vardhman Special Steels Ltd Shareholders

Vardhman Special Steels Ltd Mutual Fund Holdings

Fund NameNo of SharesAUM (%)Amount Invested (Cr)
Tata Small Cap Fund19652750.6942.39

Vardhman Special Steels Ltd ROCE Trend

Vardhman Special Steels Ltd EPS Trend

Vardhman Special Steels Ltd Key Financial Ratios

MonthMar 23Mar 22Mar 21Mar 20Mar 19
FaceValue10.0010.0010.0010.0010.00
Basic EPS (Rs.)24.7624.8710.940.896.22
Diluted EPS (Rs.)24.5924.7110.930.896.19
Cash EPS (Rs.)31.6531.4918.377.1912.90
Book Value[Excl.RevalReserv]/Share (Rs.)158.07136.82113.40102.40101.23
Book Value[Incl.RevalReserv]/Share (Rs.)158.07136.82113.40102.40101.23
Dividend / Share (Rs.)2.003.501.500.000.00
Revenue From Operations / Share (Rs.)427.05337.38231.34209.48313.42
PBDIT / Share (Rs.)44.3249.9428.7112.1619.50
PBIT / Share (Rs.)37.4043.3021.255.7912.81
PBT / Share (Rs.)33.0639.0416.39-0.576.19
Net Profit / Share (Rs.)24.7224.8410.910.826.21
PBDIT Margin (%)10.3714.8012.415.806.22
PBIT Margin (%)8.7512.839.182.764.08
PBT Margin (%)7.7411.577.08-0.271.97
Net Profit Margin (%)5.787.364.710.391.98
Return on Networth / Equity (%)15.6418.159.620.806.13
Return on Capital Employeed (%)21.4126.6815.044.469.18
Return On Assets (%)9.7410.945.500.432.49
Long Term Debt / Equity (X)0.060.140.230.260.37
Total Debt / Equity (X)0.220.280.360.620.88
Asset Turnover Ratio (%)1.781.591.191.021.43
Current Ratio (X)2.182.272.091.471.40
Quick Ratio (X)1.051.111.260.850.59
Inventory Turnover Ratio (X)3.443.613.121.673.39
Dividend Payout Ratio (NP) (%)14.136.030.000.000.00
Dividend Payout Ratio (CP) (%)11.044.750.000.000.00
Earning Retention Ratio (%)85.8793.970.000.000.00
Cash Earning Retention Ratio (%)88.9695.250.000.000.00
Interest Coverage Ratio (X)10.2011.725.901.912.95
Interest Coverage Ratio (Post Tax) (X)6.696.833.241.131.94
Enterprise Value (Cr.)1752.921069.34675.15418.17670.67
EV / Net Operating Revenue (X)1.010.780.720.490.59
EV / EBITDA (X)9.735.285.808.519.62
MarketCap / Net Operating Revenue (X)0.930.670.590.190.31
Retention Ratios (%)85.8693.960.000.000.00
Price / BV (X)2.521.671.210.390.96
Price / Net Operating Revenue (X)0.930.670.590.190.31
EarningsYield0.060.100.070.020.06

Vardhman Special Steels Ltd Profitability Ratios (%)

Vardhman Special Steels Ltd Liquidity Ratios

Vardhman Special Steels Ltd Liquidity Ratios (%)

Vardhman Special Steels Ltd Interest Coverage Ratios (X)

Vardhman Special Steels Ltd Valuation Ratios

Fair Value / Intrinsic Value of Vardhman Special Steels Ltd

Fair Value: ₹323.87

The stock is undervalued by 54.96% compared to the current price ₹209

*Investments are subject to market risks

Strength and Weakness of Vardhman Special Steels Ltd

StrengthWeakness
  1. The company has higher reserves (317.54 cr) compared to borrowings (257.31 cr), indicating strong financial stability.
  2. The company has shown consistent growth in sales (458.31 cr) and profit (41.92 cr) over the years.
  1. The stock is trading at a high valuation with an average P/B ratio of 30.93 and average Dividend Yield of 7.52%.
  2. The stock has a low average ROCE of 8.92%, which may not be favorable.
  3. The stock has a high average Working Capital Days of 118.17, which may not be favorable.
  4. The stock has a high average Cash Conversion Cycle of 160.33, which may not be favorable.

Should I Buy Vardhman Special Steels Ltd Share Now?

  • Considering various financial indicators, investors might exercise caution regarding investment in Vardhman Special Steels Ltd:
    1. Net Profit Margin: 5.78%
      • 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: 21.41% (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. Interest Coverage Ratio (Post Tax): 6.69
      • 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.
    4. Quick Ratio: 1.05
      • 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.
    5. ✗ Stock P/E: 23.9 (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.
    6. ✓ Total Debt / Equity: 0.22
      • 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 suggests exercising caution. It's advisable to conduct further research or consult with financial experts before considering any investment.

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