MoneyWorks4Me

Check Before You Invest : Bihar Sponge Iron Ltd

BSE: 500058 NSE: BIHARSPONG ISIN: INE819C01011
  |   Sector:  Metals & Mining   |   Industry:  Steel/Sponge Iron/Pig Iron

Snapshot

Q.1 Which industry/sub-sector does Bihar Sponge Iron Ltd belong to?
Bihar Sponge Iron Ltd belongs to the Metals & Mining sector, operating specifically within the Steel/Sponge Iron/Pig Iron segment.
Q.2 Is Bihar Sponge Iron Ltd a good quality company?
Bihar Sponge Iron Ltd is a weak quality company, based on a inconsistent 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 Bihar Sponge Iron Ltd undervalued or overvalued?
Bihar Sponge Iron 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 0-year
Historic Median
Price to Earnings - 14.07
Price to Book - 2.42
Price to Sales - 1.83
EV to EBITDA - 8.73
Q.4 Is Bihar Sponge Iron Ltd a good buy now?
Bihar Sponge Iron 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.

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

Q.1 Debt to Equity ratio of Bihar Sponge Iron Ltd?
Bihar Sponge Iron Ltd Debt-to-Equity ratio is 0.00, which is in line with the industry average of , indicating similar to debt levels in the industry.

Q.2 Debt to cash flow from operations of Bihar Sponge Iron Ltd?
Bihar Sponge Iron Ltd Debt to cash flow from operations is 0, which is at a healthy level.

Ownership & governance

D: Promoter shareholding and pledge status of Bihar Sponge Iron Ltd?

Q.1 Promoter shareholding and pledge status of Bihar Sponge Iron Ltd?
Promoters hold 69.23% of the Bihar Sponge Iron Ltd, with 52.05% of their stake pledged, indicating high pledge risk.

Peer comparison (industry-wise, mcap)

E: How does Bihar Sponge Iron Ltd performance compare with that of its Peers?

Q.1 Revenue growth of Bihar Sponge Iron Ltd vs industry peers?
Bihar Sponge Iron Ltd revenue CAGR is %, compared to the industry median CAGR of 0%, indicating stable growth and maintaining its market share.
Profit Metrics
Current Level 0-year
Industry Median
Revenue Growth (%) - -
Gross Profit Growth (%) - 9
Operating Profit Growth (%) - 7.8
Net Profit Growth (%) - 8.1
Operating Efficiency
Current Level 0-year
Industry Median
Asset Turnover (x) - 0.94
ROE (%) - 9.44
ROCE (%) - 12.23
Cash Conversion Cycle (days) - 63

Valuation & price assessment

Q.1 Stock return of Bihar Sponge Iron Ltd over the last decade?
Over the last 9 year(s), the stock has delivered a CAGR of 18% based on the current price.
9Y 5Y 3Y 1Y
Share Price
CAGR
18% 2.6% 4.5% -7.1%
Q.2 Valuation ratios of Bihar Sponge Iron Ltd vs historical?
The current P/E ratio of 0 is lower than its historical median of 14.07, indicating that the stock is trading below its historical average valuation.
Q.3 How do the current valuation ratios compare with 0-year historical median and industry numbers?
Valuation Ratios Current 0-year
Historic Median
0-year
Industry Median
Price to Earnings - 14.07 -
Price to Book - 2.42 -
Price to Sales - 1.83 -
EV to EBITDA - 8.73 -

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