STEELCITY - Steel City Sec.

📊 NSE: STEELCITY 🏢 Finance & Investments 📅 Last Updated: 12/14/2025 13:43

💰 Financial Performance

Revenue Growth by Segment

Consolidated Net Profit Before Tax (NPBT) for the six months ended September 30, 2025, was INR 9.59 Cr, representing an 18.9% decline compared to INR 11.83 Cr in the previous year's corresponding period. Standalone NPBT also fell 17.1% YoY to INR 9.62 Cr.

Geographic Revenue Split

The company operates PAN India with a leadership position in Andhra Pradesh, where it pioneered the franchisee model to extend business potential into urban and rural areas.

Profitability Margins

Consolidated operating profit before working capital changes was INR 8.68 Cr for the half-year ended September 2025, down 18.5% from INR 10.65 Cr YoY. Standalone operating profit was INR 8.70 Cr, a 17.8% decrease from INR 10.59 Cr.

EBITDA Margin

Core profitability as measured by operating profit before working capital changes stood at approximately 90.5% of NPBT for the consolidated entity, showing consistent operational efficiency despite the absolute profit decline.

Capital Expenditure

The company owns several of its office premises to strengthen its brand and maintains operational equipment to ensure business continuity; specific INR Cr values for planned CapEx are not disclosed.

Credit Rating & Borrowing

The company utilizes secured loans, overdrafts, and bank guarantee facilities from HDFC Bank, Karur Vysya Bank, and ICICI Bank. Standalone finance costs decreased by 40.4% YoY to INR 0.38 Cr from INR 0.64 Cr.

⚙️ Operational Drivers

Raw Materials

As a financial services firm, primary operational costs are human capital and technology infrastructure rather than physical raw materials.

Import Sources

Not applicable as the company provides financial and e-governance services.

Key Suppliers

Key technology and service partners include NSE, BSE, MCX, NCDEX, and NSDL for e-governance and trading platforms.

Capacity Expansion

The company focuses on increasing its customer base through a diversified portfolio including equity trading, derivatives, commodities, and e-governance services across its PAN India network.

Raw Material Costs

Not applicable; however, employee-related costs and technology maintenance are the primary drivers of the cost structure.

Manufacturing Efficiency

Not applicable; efficiency is driven by policy-based processes and accurate business practices in the broking industry.

Logistics & Distribution

Distribution is handled through an extensive franchisee model, particularly strong in Andhra Pradesh.

📈 Strategic Growth

Expected Growth Rate

Not disclosed

Growth Strategy

Growth is targeted through diversification into value-added services such as Prosure (Tele Consultation), 1SilverBullet (Fixed Deposits), Fibe (Personal Loans), and Mahindra Finance (Home Loans), alongside its core e-governance and stock broking leadership.

Products & Services

Equity Trading, Derivatives, Commodities, Currency, Mutual Funds, Life/General/Health Insurance, IPO services, Depository Services, e-Governance (PAN, TAN, e-TDS), and Investment Advisory.

Brand Portfolio

Steel City (Confidence as Strong as Steel), Prosure, 1SilverBullet.

New Products/Services

Recent expansion into tele-consultation (Prosure) and education loans (Propelled) to diversify revenue streams beyond traditional capital market services.

Market Expansion

Focus on urban and rural penetration through the Franchisee model, specifically targeting younger generations for financial education and awareness.

Market Share & Ranking

Leadership position in e-governance services pan India and a leading retail stock broking company in Andhra Pradesh.

Strategic Alliances

Corporate agency agreements with SBI Life Insurance, United India Insurance, Religare Health Insurance, and LIC; partnerships with Fibe and Mahindra Finance for loan products.

🌍 External Factors

Industry Trends

The industry is shifting toward digital-first financial supermarkets offering integrated broking, insurance, and credit products; Steel City is positioning itself as a diversified financial services provider.

Competitive Landscape

Competes with national retail brokers and emerging fintech platforms in the capital markets and e-governance sectors.

Competitive Moat

Moat is built on a dominant e-governance footprint and a deep-rooted franchisee network in rural Andhra Pradesh, which are difficult for digital-only competitors to replicate quickly.

Macro Economic Sensitivity

Highly sensitive to capital market performance and investor sentiment, which directly impacts trading volumes and brokerage income.

Consumer Behavior

Increasing demand for one-stop financial solutions among younger generations, driving the company's expansion into tele-consultation and personal loans.

Geopolitical Risks

Indirect impact through global market volatility affecting domestic stock indices and trading activity.

⚖️ Regulatory & Governance

Industry Regulations

Operations are strictly governed by SEBI, MCA, PFRDA, and various Stock Exchanges; the company maintains a Whistle Blower Policy and Vigil Mechanism for compliance.

Environmental Compliance

The company's service-based operations have minimal environmental impact; CSR expenditure for FY25 was INR 31.46 Lakhs (INR 0.31 Cr).

Taxation Policy Impact

The company is subject to standard corporate tax rates in India; standalone NPBT was INR 9.62 Cr for the half-year ended September 2025.

Legal Contingencies

There were no significant or material orders passed by regulators, courts, or tribunals impacting the company's going concern status or future operations.

⚠️ Risk Analysis

Key Uncertainties

Market risk and regulatory changes in the e-governance sector represent primary uncertainties; an inter-corporate loan of INR 1.5 Cr to its subsidiary remains due.