Check Before You Invest : Scan Steels Ltd

Snapshot

Q.1 Which industry/sub-sector does Scan Steels Ltd belong to?

Scan Steels Ltd belongs to the Metals & Mining sector, operating specifically within the Steel & Iron Products segment.

Q.2 Is Scan Steels Ltd a good quality company?

Scan Steels Ltd is a average quality company, based on a somewhat consistent 10-year financial track record.

Q.3 Is Scan Steels Ltd undervalued or overvalued?

Scan Steels Ltd appears Somewhat Undervalued, as its key valuation ratios are below with their past averages.

Q.4 Is Scan Steels Ltd a good buy now?

Scan Steels 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

Q.1 Revenue growth of Scan Steels Ltd?

Scan Steels Ltd revenue growth is -18.3% for FY-2025, which is below its 5-year CAGR of 3.4%, indicating slower growth.

Q.2 Return on capital employed (ROCE) of Scan Steels Ltd?

Scan Steels Ltd Return on capital employed is 6.95% for FY-2025, which is below its 5-year historical median of 8.92%. The current ROCE is below its estimated weighted average cost of capital (WACC) of 14%, indicating value preservation.

Q.3 Return on Asset of Scan Steels Ltd?

Scan Steels Ltd Return on Asset is 3.33%, which is in line with its 5-year historical median of 3.33%, indicating stable asset utilization efficiency.

Q.4 Return on Equity (ROE) of Scan Steels Ltd?

Scan Steels Ltd Return on equity is 4.84% for FY-2025, which is in line with its 5-year historical median of 4.84%, indicating the business is making similar use of its shareholders capital.

Q.5 Cash conversion cycle of Scan Steels Ltd?

Scan Steels Ltd Cash conversion cycle is 85 days, above its 5-year historical median of 66 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	1.34	1.65
ROE	4.84	4.84
ROCE	6.95	8.92
Cash Conversion Cycle	85 days	66 days

Q.6 Gross Profit margin of Scan Steels Ltd?

Scan Steels Ltd Gross profit margin which is the profit after deduction of direct costs, is 5.3% for FY-2025, which is in line with its 5-year median of 5.3%, indicating stable margins.

Q.7 Operating Profit Margin of Scan Steels Ltd?

Scan Steels Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 5.81% for FY-2025, which is in line with its 5-year median of 5.81% indicating stable margins.

Q.8 Net Profit Margin of Scan Steels Ltd?

Scan Steels Ltd Net Profit Margin is 2.48% for FY-2025, is in line with with its 5-year median of 2.48%, indicating stable margins.

	Current Level	5-year Historic Median
Gross Profit Margin	5.3	5.3
Operating Profit Margin	5.81	5.81
Net Profit Margin	2.48	2.48

Q.9 Debt to Equity ratio of Scan Steels Ltd?

Scan Steels Ltd Debt-to-Equity ratio is 0.15, which is lower with the industry average of 0.35, indicating lower debt levels in the industry.

Q.10 Debt to cash flow from operations of Scan Steels Ltd?

Scan Steels Ltd Debt to cash flow from operations is 8.85, which is at a unhealthy level.

Ownership & governance

Q.1 Promoter shareholding and pledge status of Scan Steels Ltd?

Promoters hold 48.89% of the Scan Steels Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

Q.1 Revenue growth of Scan Steels Ltd vs industry peers?

Scan Steels Ltd revenue CAGR is 3.40%, compared to the industry median CAGR of 11.40%, indicating slower growth and losing its market share.

Profit Metrics

	Current Level	5-year Industry Median
Revenue Growth	-18.3	11.4
Gross Profit Growth	5	19.8
Operating Profit Growth	-4.2	13.9
Net Profit Growth	11.1	25.2

Operating Efficiency

	Current Level	5-year Industry Median
Asset Turnover	1.34	1.33
ROE	4.84	9.64
ROCE	6.95	12.04
Cash Conversion Cycle (days)	84.56	80

Valuation & price assessment

Q.1 Stock return of Scan Steels Ltd over the last decade?

Over the last 9 year(s), the stock has delivered a CAGR of 9% based on the current price.

Q.2 What return has the stock given over the last decade?

	9Y	5Y	3Y	1Y
Share Price CAGR	9%	3.9%	3.8%	-4.3%

Q.3 Valuation ratios of Scan Steels Ltd vs historical?

The current P/E is higher that its historical median.

Q.4 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	13.08	10.20	17.26
Price to Book	0.5	0.55	1.63
Price to Sales	0.27	0.26	0.74
EV to EBITDA	6.83	5.19	10.03

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