Dominage Steel rallies 120pc despite losses, factory shutdown

Dominage Steel Building Systems has continued its unabated rally despite having a significantly negative P/E (price-to-earnings) ratio and one of its factory units being shut down.

The company's stock price jumped 120 per cent to Tk 36.70 a share between September 22 last year and February 24 this year.

However, neither the operational status nor the financial performance of Dominage Steel supports the stock price hike. The company incurred losses in Q1 and Q2 of FY26.

Its trailing P/E ratio, calculated based on the last 12 months' actual earnings, appears abnormally high. However, the ratio is negative due to losses in the previous two quarters.

The trailing negative P/E ratio stood at 282.31 on Monday, according to the Dhaka Stock Exchange (DSE), indicating high financial risk, potential instability, or that the company may be in a restructuring phase.

In a 'matter of emphasis', the auditor drew attention to financial mismatches in the statements for FY25.

Tax deducted at source (TDS) and value-added tax deducted at source (VDS) were not properly deducted from expense heads as required under the relevant tax laws. Furthermore, advance income tax (AIT) remained unadjusted for a long time.

The company could not provide time-wise trade receivables. In the absence of these schedules, the ageing analysis and recoverability assessment could not be verified.

Among other mismatches, some purchases and payments were made outside the banking channel.

Meanwhile, the stock began exhibiting a rally on September 22 last year, when it closed at Tk 16.70 per share on the DSE. Since then, the price rose 37 per cent to Tk 22.90 by November 4.

The Dhaka bourse then raised an alarm by providing information regarding the company's operational status.

A DSE team visited the company's factory premises in Ashulia, Savar, and Polash, Narsingdi, on November 3 and 4 last year to assess its operational status.

During the inspection, the team observed that the Ashulia, Savar unit was operational, while the Polash, Narsingdi unit was shut down.

The DSE continued to inform investors about the company's status through its website on almost every trading session until Monday.

Nevertheless, the stock kept climbing on the DSE.

The company paid cash dividends ranging from 0.25 per cent to 0.5 per cent between FY22 and FY25. For each of the following two years, it paid 2 per cent cash dividends.

This means the company distributed nominal dividends to maintain its 'B' category status on the bourses and avoid being labelled a junk stock.

Dominage Steel reported a profit of Tk 106 million in FY21, which declined to Tk 56 million in FY22.

Its earnings fell sharply to Tk 4.58 million in FY23 and Tk 2.83 million in FY24, before rising slightly to Tk 5.10 million in FY25.

The company reported a loss of Tk 0.07 per share for October-December 2025, compared to a loss of Tk 0.02 per share in the previous quarter.

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