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INVESTMENT INSIGHTS

Check Before You Invest : Aditya Ultra Steel Ltd

BSE: 0 NSE: AUSL ISIN: INE01YQ01013
  |   Sector:  Metals & Mining   |   Industry:  Steel & Iron Products

Snapshot

Q.1 Which industry/sub-sector does Aditya Ultra Steel Ltd belong to?
Aditya Ultra Steel Ltd belongs to the Metals & Mining sector, operating specifically within the Steel & Iron Products segment.
Q.2 Is Aditya Ultra Steel Ltd a good quality company?
Aditya Ultra Steel Ltd is a quality company, based on a 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 Aditya Ultra Steel Ltd undervalued or overvalued?
Aditya Ultra Steel 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 5.58 -
Price to Book 0.59 -
Price to Sales 0.09 -
EV to EBITDA 5.62 -
Q.4 Is Aditya Ultra Steel Ltd a good buy now?
Aditya Ultra Steel Ltd is not a good buy now, based on weak price trend analysis suggesting prices may fall. 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 Aditya Ultra Steel Ltd?
Aditya Ultra Steel Ltd revenue growth is -0.4% for FY-2025, which is below its 5-year CAGR of 12.1%, indicating slower growth.

Q.2 Gross Profit margin of Aditya Ultra Steel Ltd?
Aditya Ultra Steel Ltd Gross profit margin which is the profit after deduction of direct costs, is 2.2% for FY-2025, which is in line with its 5-year median of 2.1%, indicating stable margins.

Q.3 Operating Profit Margin of Aditya Ultra Steel Ltd?
Aditya Ultra Steel Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 3.41% for FY-2025, which is above its 5-year median of 3.05% indicating increasing margins.

Q.4 Net Profit Margin of Aditya Ultra Steel Ltd?
Aditya Ultra Steel Ltd Net Profit Margin is 1.59% for FY-2025, is above its 5-year median of 1.31%, indicating increasing margins.
Current Level 5-year
Historic Median
Gross Profit Margin (%) 2.2 2.1
Operating Profit Margin (%) 3.41 3.05
Net Profit Margin (%) 1.59 1.31

B: Does the business utilize capital efficiently?

Q.5 Return on Asset of Aditya Ultra Steel Ltd?
Aditya Ultra Steel Ltd Return on Asset is 5.41%, which is below its 5-year historical median of 5.8%, indicating deteriorated asset utilization efficiency.

Q.6 Return on capital employed (ROCE) of Aditya Ultra Steel Ltd?
Aditya Ultra Steel Ltd Return on capital employed is 14.54% for FY-2025, which is below its 5-year historical median of 16.04%. The current ROCE is above its estimated weighted average cost of capital (WACC) of 14%, indicating value creation.

Q.7 Return on Equity (ROE) of Aditya Ultra Steel Ltd?
Aditya Ultra Steel Ltd Return on equity is 14.9% for FY-2025, which is below its 5-year historical median of 21.33%, indicating the business is making worse use of its shareholders capital.

Q.8 Cash conversion cycle of Aditya Ultra Steel Ltd?
Aditya Ultra Steel Ltd Cash conversion cycle is 46 days, above its 5-year historical median of 37 days, indicating deteriorated working capital management. However, you need to compare this with its peers in the industry.
Current Level 5-year
Historic Median
Asset Turnover (x) 3.4 4.8
ROE (%) 14.9 21.33
ROCE (%) 14.54 16.04
Cash Conversion Cycle 46 days 37 days

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

Q.9 Debt to Equity ratio of Aditya Ultra Steel Ltd?
Aditya Ultra Steel Ltd Debt-to-Equity ratio is 0.86, which is above the industry average of 0.31, indicating higher debt levels in the industry.

Q.10 Debt to cash flow from operations of Aditya Ultra Steel Ltd?
Aditya Ultra Steel Ltd Debt to cash flow from operations is -1.74, which is at a unhealthy level.

Ownership & governance

D: Promoter shareholding and pledge status of Aditya Ultra Steel Ltd?

Q.1 Promoter shareholding and pledge status of Aditya Ultra Steel Ltd?
Promoters hold 68.76% of the Aditya Ultra Steel Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

E: How does Aditya Ultra Steel Ltd performance compare with that of its Peers?

Q.1 Revenue growth of Aditya Ultra Steel Ltd vs industry peers?
Aditya Ultra Steel Ltd revenue CAGR is 12.10%, compared to the industry median CAGR of 7.56%, indicating faster growth and gaining its market share.
Profit Metrics
Current Level 5-year
Industry Median
Revenue Growth (%) -0.4 7.6
Gross Profit Growth (%) 4.5 19.3
Operating Profit Growth (%) 11.1 13.8
Net Profit Growth (%) 21.3 24.6
Operating Efficiency
Current Level 5-year
Industry Median
Asset Turnover (x) 3.4 1.27
ROE (%) 14.9 8.04
ROCE (%) 14.54 11.28
Cash Conversion Cycle (days) 46.13 72

Valuation & price assessment

Q.1 Stock return of Aditya Ultra Steel Ltd over the last decade?
Over the last 1 year(s), the stock has delivered a CAGR of -36.03% based on the current price.
9Y 5Y 3Y 1Y
Share Price
CAGR		 - - - -36%
Q.2 Valuation ratios of Aditya Ultra Steel Ltd vs historical?
The current P/E ratio of 5.58 is higher than its historical median of , indicating that the stock is trading above its historical average valuation.
Q.3 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 5.58 - 17.36
Price to Book 0.59 - 1.63
Price to Sales 0.09 - 0.74
EV to EBITDA 5.62 - 10.05

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10. NMDC Steel

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