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Check Before You Invest : Jainam Ferro Alloys (I) Ltd

BSE: 0 NSE: JAINAM ISIN: INE02KC01010
  |   Sector:  Metals & Mining   |   Industry:  Ferro & Silica Manganese

Snapshot

Q.1 Which industry/sub-sector does Jainam Ferro Alloys (I) Ltd belong to?
Jainam Ferro Alloys (I) Ltd belongs to the Metals & Mining sector, operating specifically within the Ferro & Silica Manganese segment.
Q.2 Is Jainam Ferro Alloys (I) Ltd a good quality company?
Jainam Ferro Alloys (I) 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 Jainam Ferro Alloys (I) Ltd undervalued or overvalued?
Jainam Ferro Alloys (I) Ltd appears Somewhat overvalued, as its key valuation ratios are higher than 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 32.21 22.22
Price to Book 2.82 2.25
Price to Sales 1.56 0.88
EV to EBITDA 15.3 8.88
Q.4 Is Jainam Ferro Alloys (I) Ltd a good buy now?
Jainam Ferro Alloys (I) 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 Jainam Ferro Alloys (I) Ltd?
Jainam Ferro Alloys (I) Ltd revenue growth is 16.7% for FY-2025, which is above its 5-year CAGR of 12.76%, indicating faster growth.

Q.2 Gross Profit margin of Jainam Ferro Alloys (I) Ltd?
Jainam Ferro Alloys (I) Ltd Gross profit margin which is the profit after deduction of direct costs, is 6.6% for FY-2025, which is in line with its 5-year median of 6.6%, indicating stable margins.

Q.3 Operating Profit Margin of Jainam Ferro Alloys (I) Ltd?
Jainam Ferro Alloys (I) Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 6.74% for FY-2025, which is in line with its 5-year median of 6.74% indicating stable margins.

Q.4 Net Profit Margin of Jainam Ferro Alloys (I) Ltd?
Jainam Ferro Alloys (I) Ltd Net Profit Margin is 4.84% for FY-2025, is in line with its 5-year median of 4.84%, indicating stable margins.
Current Level 5-year
Historic Median
Gross Profit Margin (%) 6.6 6.6
Operating Profit Margin (%) 6.74 6.74
Net Profit Margin (%) 4.84 4.84

B: Does the business utilize capital efficiently?

Q.5 Return on Asset of Jainam Ferro Alloys (I) Ltd?
Jainam Ferro Alloys (I) Ltd Return on Asset is 6.54%, which is in line with its 5-year historical median of 6.84%, indicating stable asset utilization efficiency.

Q.6 Return on capital employed (ROCE) of Jainam Ferro Alloys (I) Ltd?
Jainam Ferro Alloys (I) Ltd Return on capital employed is 13.05% for FY-2025, which is below its 5-year historical median of 22.47%. 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 Jainam Ferro Alloys (I) Ltd?
Jainam Ferro Alloys (I) Ltd Return on equity is 9.47% for FY-2025, which is below its 5-year historical median of 14.69%, indicating the business is making worse use of its shareholders capital.

Q.8 Cash conversion cycle of Jainam Ferro Alloys (I) Ltd?
Jainam Ferro Alloys (I) Ltd Cash conversion cycle is 8 days, in line with its 5-year historical median of 8 days, indicating stable working capital management. However, you need to compare this with its peers in the industry.
Current Level 5-year
Historic Median
Asset Turnover (x) 1.65 2.56
ROE (%) 9.47 14.69
ROCE (%) 13.05 22.47
Cash Conversion Cycle 8 days 8 days

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

Q.9 Debt to Equity ratio of Jainam Ferro Alloys (I) Ltd?
Jainam Ferro Alloys (I) Ltd Debt-to-Equity ratio is 0.01, which is lower the industry average of 0.01, indicating lower debt levels in the industry.

Q.10 Debt to cash flow from operations of Jainam Ferro Alloys (I) Ltd?
Jainam Ferro Alloys (I) Ltd Debt to cash flow from operations is -0.72, which is at a unhealthy level.

Ownership & governance

D: Promoter shareholding and pledge status of Jainam Ferro Alloys (I) Ltd?

Q.1 Promoter shareholding and pledge status of Jainam Ferro Alloys (I) Ltd?
Promoters hold 66.25% of the Jainam Ferro Alloys (I) Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

E: How does Jainam Ferro Alloys (I) Ltd performance compare with that of its Peers?

Q.1 Revenue growth of Jainam Ferro Alloys (I) Ltd vs industry peers?
Jainam Ferro Alloys (I) Ltd revenue CAGR is 12.76%, compared to the industry median CAGR of 0.00%, indicating faster growth and gaining its market share.
Profit Metrics
Current Level 5-year
Industry Median
Revenue Growth (%) 16.7 0
Gross Profit Growth (%) 80 39.7
Operating Profit Growth (%) 150 38
Net Profit Growth (%) 83.3 26.4
Operating Efficiency
Current Level 5-year
Industry Median
Asset Turnover (x) 1.65 0.69
ROE (%) 9.47 2.27
ROCE (%) 13.05 4.65
Cash Conversion Cycle (days) 7.93 59

Valuation & price assessment

Q.1 Stock return of Jainam Ferro Alloys (I) Ltd over the last decade?
Over the last 3 year(s), the stock has delivered a CAGR of 28.82% based on the current price.
9Y 5Y 3Y 1Y
Share Price
CAGR
- - 28.8% 22.9%
Q.2 Valuation ratios of Jainam Ferro Alloys (I) Ltd vs historical?
The current P/E ratio of 32.21 is higher than its historical median of 22.22, 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 32.21 22.22 16.67
Price to Book 2.82 2.25 1.42
Price to Sales 1.56 0.88 1.03
EV to EBITDA 15.3 8.88 5.56

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