NSLNISP - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 05 Nov 25, 7:43 am

Fundamental Rating: 2.4

📊 Financial Overview

• Profitability: PAT turned negative at ₹-115 Cr from ₹25.6 Cr QoQ; EPS at ₹-4.51
• Margins: ROCE at -13.0%, ROE at -16.6% — indicates operational inefficiency and capital erosion
• Debt Profile: Debt-to-equity ratio of 0.41 — moderate leverage
• Dividend Yield: 0.00% — no income return for shareholders

📈 Valuation Metrics

• P/E Ratio: Not applicable due to negative earnings
• P/B Ratio: ~1.0 — fair valuation relative to book value ₹44.4
• PEG Ratio: Not available — growth visibility unclear
• Intrinsic Value: Estimated around ₹35–₹38 based on asset value and sector multiples

🏢 Business Model & Competitive Edge

• Core Operations: NSL NISP is a steel manufacturing subsidiary of NMDC, focused on integrated steel production
• Moat: Backed by NMDC’s raw material supply and government support
• Growth Drivers: Ramp-up of production, cost optimization, and integration with NMDC’s mining operations

📌 Entry Zone Recommendation

• Suggested Entry: ₹35–₹38 — below book value and near technical support
• Technical Indicators: RSI at 45.6 (neutral), MACD slightly positive — weak but stabilizing momentum

📈 Long-Term Holding Guidance

• High-risk long-term hold; suitable only for speculative investors betting on turnaround and integration success
• Monitor earnings recovery and operational ramp-up

✅ Positive

• Backed by NMDC, ensuring raw material security
• FII holding increased by 0.46%
• Trading near book value, limiting downside risk

⚠️ Limitation

• Negative ROE and ROCE
• Recent PAT turned negative; EPS at ₹-4.51
• No dividend payout

📰 Company Negative News

• Q2 FY26 loss of ₹115 Cr due to higher input costs and underutilization of plant capacity

🌟 Company Positive News

• Production ramp-up expected in H2 FY26; management targets breakeven by FY27

🏭 Industry

• Steel industry P/E at 22.4 — NSLNISP currently unprofitable and trades below peer average
• Sector driven by infrastructure demand, global steel prices, and government capex

🧾 Conclusion

• NSLNISP is a high-risk, early-stage steel producer with potential upside if turnaround succeeds
• Speculative buy near support; long-term investors should await signs of profitability and margin recovery