Manaksia Steels Ltd Upgraded to Buy on Strong Technical and Financial Performance

Technical Outlook Shifts to Mildly Bullish

The primary catalyst for the upgrade stems from a marked improvement in Manaksia Steels’ technical profile. The technical trend has shifted from mildly bearish to mildly bullish, signalling growing investor confidence and momentum in the stock price. Key technical indicators support this positive shift: the Moving Average Convergence Divergence (MACD) is bullish on both weekly and monthly charts, while Bollinger Bands also indicate bullishness over these timeframes.

However, the Relative Strength Index (RSI) remains bearish on weekly and monthly scales, suggesting some caution as the stock may be approaching overbought levels in the short term. The daily moving averages are mildly bearish, reflecting some near-term consolidation. Other momentum indicators such as the Know Sure Thing (KST) oscillator and Dow Theory signals are mildly bullish on weekly and monthly charts, reinforcing the overall positive technical sentiment.

On 23 April 2026, Manaksia Steels closed at ₹84.87, up 7.50% from the previous close of ₹78.95, hitting a 52-week high of ₹86.84 during the session. This price action confirms the technical upgrade and suggests further upside potential in the near term.

Valuation Moves from Attractive to Fair

Alongside technical improvements, the valuation grade for Manaksia Steels has been revised from attractive to fair. The company currently trades at a price-to-earnings (PE) ratio of 21.98, which is moderate compared to some peers in the ferrous metals sector. For instance, Steel Exchange trades at a much higher PE of 67.12, while Gandhi Spl. Tube is considered very expensive despite a lower PE of 14.53 due to other factors.

Enterprise value to EBITDA stands at 12.78, and the EV to capital employed ratio is a reasonable 1.71, indicating the company is not over-leveraged relative to its asset base. The PEG ratio is notably low at 0.17, signalling that earnings growth is strong relative to the price paid by investors. Return on capital employed (ROCE) is 8.44%, and return on equity (ROE) is 5.95%, both reflecting fair but not exceptional profitability levels.

While the valuation is no longer classified as attractive, it remains reasonable given the company’s improving fundamentals and strong earnings growth trajectory.

Robust Financial Trend with Outstanding Quarterly Performance

Manaksia Steels has delivered exceptional financial results in the third quarter of fiscal year 2025-26, which has been a key driver behind the rating upgrade. The company reported a net profit growth of 113.56% year-on-year, with profit after tax (PAT) for the quarter reaching ₹9.61 crores, up 112.3% compared to the previous four-quarter average. Profit before tax excluding other income (PBT less OI) surged 123.1% to ₹9.94 crores.

Net sales for the quarter hit a record ₹317.86 crores, underscoring strong demand and operational efficiency. This marks the third consecutive quarter of positive results, signalling sustained momentum rather than a one-off spike. The company’s low average debt-to-equity ratio of 0.09 times further enhances its financial stability and reduces risk.

Long-term returns have been impressive as well. Over the past year, Manaksia Steels has generated a stock return of 40.44%, outperforming the Sensex which declined by 1.36% over the same period. Over three and five years, the stock has delivered returns of 135.10% and 284.90% respectively, vastly exceeding the Sensex’s 31.62% and 63.30% gains. Over a decade, the stock’s return of 875.52% dwarfs the Sensex’s 203.88%.

Quality Assessment: Market-Beating Performance but Some Growth Concerns

Manaksia Steels’ quality grade remains strong, supported by consistent earnings growth and a solid balance sheet. The company’s mojo score of 72.0 and mojo grade of Buy reflect this favourable assessment. However, some caution is warranted due to relatively modest long-term growth rates in net sales and operating profit. Over the last five years, net sales have grown at an annualised rate of 14.38%, while operating profit has increased by 7.27% annually. These figures suggest that while recent quarters have been outstanding, the company’s growth trajectory is moderate over the medium term.

Another risk factor is the absence of domestic mutual fund holdings in Manaksia Steels. Institutional investors typically conduct thorough due diligence, and their lack of exposure may indicate concerns about valuation or business fundamentals at current levels.

Technical and Market Performance Summary

Manaksia Steels’ technical upgrade is supported by a strong price rally in recent weeks. The stock has surged nearly 50% in the last week alone, vastly outperforming the Sensex’s 0.52% gain. Over the last month, the stock’s return of 64.16% dwarfs the Sensex’s 5.34%. Year-to-date, the stock is up 21.23% while the Sensex has declined 7.87%. This outperformance extends over multiple time horizons, confirming the stock’s market-beating credentials.

The stock’s 52-week trading range of ₹43.10 to ₹86.84 highlights significant appreciation potential realised in the past year. The current price near the 52-week high reflects strong investor interest and positive sentiment.

Conclusion: Upgrade Reflects Balanced Optimism

The upgrade of Manaksia Steels Ltd from Hold to Buy is a reflection of improved technical indicators, solid quarterly earnings growth, and a fair valuation relative to peers. While the company’s long-term growth rates remain moderate and institutional interest is limited, the recent financial performance and market momentum justify a more optimistic stance.

Investors should weigh the company’s strong near-term prospects and market-beating returns against the risks of slower growth and limited mutual fund participation. Overall, the upgrade signals confidence in Manaksia Steels’ ability to sustain its positive trajectory in the ferrous metals sector.

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