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Check Before You Invest : Chaman Metallics Ltd

BSE: 0 NSE: CMNL ISIN: INE06PV01010
  |   Sector:  Metals & Mining   |   Industry:  Steel/Sponge Iron/Pig Iron

Snapshot

Q.1 Which industry/sub-sector does Chaman Metallics Ltd belong to?
Chaman Metallics Ltd belongs to the Metals & Mining sector, operating specifically within the Steel/Sponge Iron/Pig Iron segment.
Q.2 Is Chaman Metallics Ltd a good quality company?
Chaman Metallics Ltd is a average quality company, based on a somewhat consistent multi-year financial track record.

This assessment is based on company’s performance on Revenue growth, ROCE, Equity and Assets, key margin ratios, cash conversion cycle, and debt to cash flow from operations and how it compares with its long term averages.

Q.3 Is Chaman Metallics Ltd undervalued or overvalued?
Chaman Metallics Ltd appears Fair, as its key valuation ratios are in line with their past averages.

Based on the industry it operates in, the relevant valuation ratios include one of the following, P/E, P/BV, P/Sales, EV/EBITDA or a combination of two or more.

Valuation Ratios Current 5-year
Historic Median
Price to Earnings 29.62 14.71
Price to Book 2.91 2.58
Price to Sales 1.68 1.01
EV to EBITDA 37.72 9.74
Q.4 Is Chaman Metallics Ltd a good buy now?
Chaman Metallics Ltd is a good buy now, based on strong price trend analysis suggesting prices may rise. However, you need to check its quality and valuation before making a decision

Performance Analysis

We have analysed the performance of the company on the following:

  • How has it performed on generating Profits?

    By checking its Revenue growth, Gross, Operating and Net Margins compared to its last 5-year median.

  • How efficiently has it utilized Capital?

    By checking its ROCE, ROA, ROE and its Cash Conversion Cycle.

  • How is it managing its Debt?

    By checking its Debt to Equity and Cash Flow from Operations.

A: What are the trends in revenue and profit margins?

Q.1 Revenue growth of Chaman Metallics Ltd?
Chaman Metallics Ltd revenue growth is -8.8% for FY-2025, which is below its 5-year CAGR of 24.31%, indicating slower growth.

Q.2 Gross Profit margin of Chaman Metallics Ltd?
Chaman Metallics Ltd Gross profit margin which is the profit after deduction of direct costs, is 9% for FY-2025, which is in line with its 5-year median of 9%, indicating stable margins.

Q.3 Operating Profit Margin of Chaman Metallics Ltd?
Chaman Metallics Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 8.82% for FY-2025, which is in line with its 5-year median of 8.82% indicating stable margins.

Q.4 Net Profit Margin of Chaman Metallics Ltd?
Chaman Metallics Ltd Net Profit Margin is 5.68% for FY-2025, is in line with its 5-year median of 5.68%, indicating stable margins.
Current Level 5-year
Historic Median
Gross Profit Margin (%) 9 9
Operating Profit Margin (%) 8.82 8.82
Net Profit Margin (%) 5.68 5.68

B: Does the business utilize capital efficiently?

Q.5 Return on Asset of Chaman Metallics Ltd?
Chaman Metallics Ltd Return on Asset is 2.63%, which is below its 5-year historical median of 9.42%, indicating deteriorated asset utilization efficiency.

Q.6 Return on capital employed (ROCE) of Chaman Metallics Ltd?
Chaman Metallics Ltd Return on capital employed is 4.39% for FY-2025, which is below its 5-year historical median of 21.02%. The current ROCE is below its estimated weighted average cost of capital (WACC) of 14%, indicating value preservation.

Q.7 Return on Equity (ROE) of Chaman Metallics Ltd?
Chaman Metallics Ltd Return on equity is 10.34% for FY-2025, which is below its 5-year historical median of 20.03%, indicating the business is making worse use of its shareholders capital.

Q.8 Cash conversion cycle of Chaman Metallics Ltd?
Chaman Metallics Ltd Cash conversion cycle is 17 days, below its 5-year historical median of 23 days, indicating improved working capital management. However, you need to compare this with its peers in the industry.
Current Level 5-year
Historic Median
Asset Turnover (x) 0.46 2.39
ROE (%) 10.34 20.03
ROCE (%) 4.39 21.02
Cash Conversion Cycle 17 days 23 days

C: How much debt does the business have and is it at a sustainable level?

Q.9 Debt to Equity ratio of Chaman Metallics Ltd?
Chaman Metallics Ltd Debt-to-Equity ratio is 3.60, which is above the industry average of 0.36, indicating higher debt levels in the industry.

Q.10 Debt to cash flow from operations of Chaman Metallics Ltd?
Chaman Metallics Ltd Debt to cash flow from operations is -6.9, which is at a unhealthy level.

Ownership & governance

D: Promoter shareholding and pledge status of Chaman Metallics Ltd?

Q.1 Promoter shareholding and pledge status of Chaman Metallics Ltd?
Promoters hold 73.60% of the Chaman Metallics Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

E: How does Chaman Metallics Ltd performance compare with that of its Peers?

Q.1 Revenue growth of Chaman Metallics Ltd vs industry peers?
Chaman Metallics Ltd revenue CAGR is 24.31%, compared to the industry median CAGR of 7.65%, indicating faster growth and gaining its market share.
Profit Metrics
Current Level 5-year
Industry Median
Revenue Growth (%) -8.8 7.7
Gross Profit Growth (%) -15.8 13
Operating Profit Growth (%) -16.7 14
Net Profit Growth (%) -23.1 20.1
Operating Efficiency
Current Level 5-year
Industry Median
Asset Turnover (x) 0.46 1.81
ROE (%) 10.34 8.94
ROCE (%) 4.39 13.27
Cash Conversion Cycle (days) 17.07 36

Valuation & price assessment

Q.1 Valuation ratios of Chaman Metallics Ltd vs historical?
The current P/E ratio of 29.62 is higher than its historical median of 14.71, indicating that the stock is trading above its historical average valuation.
Q.2 How do the current valuation ratios compare with 5-year historical median and industry numbers?
Valuation Ratios Current 5-year
Historic Median
5-year
Industry Median
Price to Earnings 29.62 14.71 16.39
Price to Book 2.91 2.58 1.83
Price to Sales 1.68 1.01 1.06
EV to EBITDA 37.72 9.74 10.61
Q.3 Stock return of Chaman Metallics Ltd over the last decade?
Over the last 3 year(s), the stock has delivered a CAGR of 30.5% based on the current price.
9Y 5Y 3Y 1Y
Share Price
CAGR
- - 30.5% -20%

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