Valuation Metrics Signal Improved Price Attractiveness
Ahmedabad Steelcraft’s current P/E ratio stands at 13.63, a figure that positions the stock favourably within the iron and steel products sector. This valuation is significantly lower than many of its peers, such as Indiabulls, which trades at a P/E of 77.75, and Cropster Agro at 75.18, both classified as very expensive. The company’s P/BV ratio of 2.08 also supports this improved valuation stance, indicating that the stock is trading at just over twice its book value, a reasonable premium given its return metrics.
These valuation improvements have been recognised by MarketsMOJO, which upgraded Ahmedabad Steelcraft’s Mojo Grade from Hold to Sell on 8 September 2025, reflecting a more cautious stance despite the attractive valuation. The Mojo Score currently stands at 43.0, signalling moderate risk but also potential value for discerning investors.
Robust Return Ratios Underpin Valuation
Ahmedabad Steelcraft’s return on capital employed (ROCE) is a robust 21.18%, while its return on equity (ROE) is a healthy 15.28%. These figures suggest efficient capital utilisation and profitability, which justify the company’s valuation premium relative to book value. The enterprise value to EBITDA ratio of 9.81 further indicates that the company is reasonably priced when considering operational earnings before non-cash expenses.
Moreover, the company’s PEG ratio of 0.06 is exceptionally low, implying that the stock is undervalued relative to its earnings growth potential. This metric is particularly compelling when compared to peers such as India Motor Part, which, despite being rated very attractive, has a PEG ratio of 1.31, and Creative Newtech with a PEG of 3.52.
Stock Price Movement and Market Capitalisation
On 23 February 2026, Ahmedabad Steelcraft’s stock price closed at ₹170.85, up 4.15% from the previous close of ₹164.05. The stock traded within a range of ₹160.00 to ₹173.95 during the day, remaining closer to its 52-week low of ₹157.00 than the high of ₹303.00. This price behaviour reflects a cautious market sentiment despite the valuation improvement.
The company’s market capitalisation grade is rated 4, indicating a mid-sized market cap that may appeal to investors seeking exposure to the iron and steel products sector without the volatility often associated with smaller caps.
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Comparative Performance Against Sensex and Peers
Ahmedabad Steelcraft’s recent returns have lagged behind the broader market. Over the past week, the stock declined by 12.00%, while the Sensex gained 0.23%. The one-month and year-to-date returns also show underperformance, with the stock down 2.04% and 4.02% respectively, compared to Sensex gains of 0.77% and 2.82% over the same periods.
However, the company’s long-term performance remains impressive. Over three, five, and ten-year horizons, Ahmedabad Steelcraft has delivered returns of 808.78%, 851.81%, and 756.39% respectively, vastly outperforming the Sensex’s 36.45%, 62.73%, and 249.29% returns. This long-term outperformance underscores the company’s resilience and growth potential despite short-term volatility.
Valuation in the Context of Industry Peers
Within the iron and steel products sector, Ahmedabad Steelcraft’s valuation metrics stand out as attractive. While some peers such as India Motor Part are rated very attractive with a P/E of 15.85, others like Indiabulls and RRP Defense are classified as very expensive, with P/E ratios exceeding 400 in some cases. This wide valuation dispersion highlights the relative value proposition Ahmedabad Steelcraft offers.
Furthermore, the company’s EV to EBIT ratio of 9.87 and EV to capital employed of 2.10 suggest operational efficiency and prudent capital management, reinforcing the investment case for value-oriented investors.
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Investment Outlook and Considerations
Ahmedabad Steelcraft’s improved valuation parameters, combined with strong return ratios and a low PEG ratio, present a compelling case for investors seeking value in the iron and steel products sector. However, the recent downgrade in Mojo Grade to Sell and the stock’s short-term underperformance relative to the Sensex warrant caution.
Investors should weigh the company’s attractive price multiples against sectoral headwinds and broader market volatility. The stock’s proximity to its 52-week low suggests limited downside risk, but the gap to its 52-week high indicates potential for upside should market conditions improve.
Given the company’s mid-sized market capitalisation and operational efficiency, Ahmedabad Steelcraft may appeal to investors with a medium to long-term horizon who are comfortable navigating cyclical fluctuations inherent in the iron and steel industry.
Summary
Ahmedabad Steelcraft Ltd’s valuation has shifted favourably, moving from very attractive to attractive, supported by a P/E of 13.63 and P/BV of 2.08. Its strong ROCE and ROE ratios, alongside a remarkably low PEG ratio, underscore the stock’s value proposition relative to peers. Despite recent price volatility and a Mojo Grade downgrade, the company’s long-term returns and operational metrics suggest it remains a noteworthy contender for value-focused portfolios.
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