At Borusan Boru, the same share is speaking in two places. At the family table the price is 568,50 TL; on the May 18 screen it is 512,50 TL. That gap, by itself, is not a target price, an invitation, or a certificate of cheapness. It is something harsher: a tag asking when the steel will be delivered, when advances will turn into revenue, and whether the 6.3% EBITDA margin can be carried to the 8-10% band by the end of 2026.
The company's name still sounds like a factory. The economic machine is no longer a factory; it is 10 facilities across three continents, 1.7 million tons of capacity, 4,000 products, Baytown-Mobile-Panama City in the United States, Vobarno and Romania in Europe, and the Gemlik-Halkali-Bursa line in Turkey. In the first quarter, 88% of revenue came from abroad. Reading BRSAN as a local steel-pipe name would be looking at the main pipeline and missing the valve.
The bare first-quarter number is mixed but legible: 279.6 thousand tons of sales volume, 421.6 million dollars of revenue, 27 million dollars of EBITDA, 6 million dollars of net profit. In TL financials, revenue was 18.38 billion TL and net profit was 273.6 million TL. Net margin was 1.5%. For a geography this large, a net profit this thin immediately tells the investor something: in BRSAN, valuation depends less on the size of today's profit than on which deliveries turn into invoices at what margin over the rest of the year.
Infrastructure and Project took the stage in the first quarter. This business line's revenue rose to 193 million dollars and supplied 46% of consolidated revenue. Energy took a 24% share with 100 million dollars, Industry and Construction 18% with 77 million dollars, and Automotive 12% with 51 million dollars. The good part is here: the company is not condemned to a single market. The ugly part is here too: different geographies and business lines create delivery-schedule risk as much as they create a safety cushion.
On the Industry and Construction side, volume contracted 36.1%; demand is weak in Turkey and Europe, competition is hard. In Automotive, volume fell 2.4%; pricing rescued revenue, but demand is not alive. Energy grew, and Infrastructure and Project jumped from last year's low base. Management's sentence that "deliveries will intensify in the later periods of the year" is therefore both reasonable and dangerous. Reasonable, because project work flows this way. Dangerous, because the 2026 valuation is not hidden in the first quarter, but in quarters not yet delivered.
The 1Q26 activity report did not change the 2026 expectation: 1.15-1.25 million tons of sales volume, 2.1-2.3 billion dollars of revenue, and an 8-10% EBITDA margin. First-quarter EBITDA margin was 6.3%. The 170-370 basis-point distance between them is the report's central investment question. If that distance closes, BRSAN stops being an expensive industrial share and can be priced like a global project-pipe platform. If it does not close, even 512,50 TL is not comfortable.
The Gemlik move is the engineering side of this margin bridge. Management decided to move the production lines in Halkali and the advanced processing center equipment in Bursa to the Gemlik Campus. The project requires 29 million dollars of capex and 27 million dollars of one-off cash expense. In return, around 30 million dollars of working-capital improvement and a 50-100 basis-point contribution to consolidated EBITDA margin are expected. In other words, the matter is not merely moving machinery; it is creating room on the balance sheet, increasing decision speed, and pouring a floor under the margin.
At first glance, the cash side is strong. Against 273.6 million TL of net profit, there is 3.777 billion TL of operating cash flow. This is not the makeup of a loss-making company. But before applauding, one has to look inside the machine: inventories rose to 24.783 billion TL; inventory increase absorbed 4.684 billion TL in cash flow; liabilities arising from customer contracts rose to 15.653 billion TL. These items give delivery visibility, but if delivery slips, they are also liabilities.
| Item | 1Q26 value | Read-through |
|---|---|---|
| Operating cash flow | TRY 3,777m | Far above net profit, but delivery and advance composition matters. |
| Net profit | TRY 274m | Thin versus revenue; valuation depends on margin recovery, not current profit. |
| Inventories | TRY 24,783m | Delivery schedule and steel-price risk sit heavily on the balance sheet. |
| Customer contract liabilities | TRY 15,653m | Advance/delivery visibility, but a liability if execution slips. |
| Total current liabilities | TRY 40,773m | Current ratio is 1.12; discipline matters. |
Leverage is not a red alarm today. Financial debt is 16.057 billion TL, cash is 8.553 billion TL; net financial debt is approximately 7.504 billion TL. The 1Q26 activity report says net financial debt fell to 160 million dollars and Net Financial Debt/EBITDA to 1.1x. This is good. But total short-term liabilities are 40.773 billion TL, the current ratio is 1.12, and the liquidity ratio is 0.51. The company is not insolvent; the TTK 376 assessment says so. But this balance sheet does not tolerate looseness. Before the pipe reaches the field, inventory, advances, and the short term do not all relax at once.
Part of the risk sits not on the price page, but on the ownership page. On April 15, a total of 3,978,628 shares belonging to Ayse Nukhet Ozmen, Zehra Nurhan Kocabiyik, and Fatma Zeynep Hamedi were transferred to Borusan Holding at a price of 568,50 TL. Borusan Holding's stake rose from 72.04% to 74.85%; together with Borusan Yatirim, the group stake is 83.93%. For the public investor, this is not an automatic target price. But the fact that the price written at the control table is 9.9% above the screen price makes the market's current doubt more interesting.
Governance is not a red flag, but it is real enough to justify a discount. Related parties include service purchases from Borusan Lojistik, raw material and service purchases from Borcelik, Borusan Holding services, and 143.5 million TL of dividend income from Borcelik. The financial report states that these payables are 30-60 days maturity, interest-free, and unsecured. There are no other guarantees, pledges, or mortgages given in favor of the parent shareholder. Still, the public shareholder does not sit at the company's control table; in this stock, ownership structure demands "minority discipline" as much as "quality."
| Measure | Calculation | Result |
|---|---|---|
| Market value | 18 May 2026 market data | TRY 72.7bn |
| Price/book | TRY 72.7bn / TRY 39.4bn parent equity | 1.84x |
| Net financial debt | TRY 16.1bn financial debt - TRY 8.6bn cash | TRY 7.5bn |
| Profit snapshot | 1Q26 net profit TRY 274m; net margin 1.5% | Current profit does not argue cheapness |
| EV / 2026 midpoint EBITDA | TRY 80.2bn EV / roughly TRY 8.6bn EBITDA | 9.3x |
| Control transaction price | 15 April 2026 special transaction disclosure | TRY 568.50 |
Valuation does not allow a cheapness fairy tale here. A 512,50 TL price and 72.658 billion TL market value, against 39.382 billion TL of parent-shareholders' equity, means roughly 1.84x price/book. First-quarter net profit was 273.6 million TL and net margin only 1.5%. That is why today's profit photograph does not make the stock look cheap; valuation only gains meaning through the delivery and margin bridge.
But in this stock, valuation looks not backward, but at delivery. If we take the midpoint of management's target, 2.2 billion dollars of revenue and a 9% EBITDA margin mean 198 million dollars of EBITDA. Using the first-quarter revenue exchange rate, that is approximately 8.63 billion TL; enterprise value is about 9.3 times that. At an 8% margin, the multiple is 10.4x; at a 10% margin, 8.4x. If the first quarter's 6.3% margin spreads across the full year, the multiple rises to 13.3x and the stock begins to look expensive.
| Scenario | EBITDA | EV/EBITDA | Read-through |
|---|---|---|---|
| 1Q26 margin carried through | USD 138.6m | 13.3x | The current price starts to look expensive. |
| 2026 target low: 8% | USD 176.0m | 10.4x | Still demanding; delivery must be visible. |
| 2026 midpoint: 9% | USD 198.0m | 9.3x | Supports fairly valued. |
| 2026 target high: 10% | USD 220.0m | 8.4x | Creates upside if cash follows margin. |
So the verdict is simple but not comfortable: BRSAN is reasonably valued. To call it cheap, one must see more proof of the 2026 margin bridge. To call it expensive, one must ignore 88% foreign revenue, falling net debt/EBITDA, the roughly 100 million dollars of Berg Pipe orders written into 2027, and the control transaction made at the family table at 568,50 TL.
The best bull case is this: project deliveries intensify from the second quarter onward, Infrastructure and Project carries a higher value-added mix, the Gemlik plan works without disrupting production, the 2026 EBITDA margin enters the 8-10% band, and the 2027 Berg Pipe order reduces the market's fear of a "one-quarter recovery." In that case, today's 9.3x mid-scenario multiple does not remain expensive.
The fairest bear case is this: Q1 net profit is still very thin, Europe and Turkey demand is weak, Industry and Construction is shrinking, inventory is high, short-term liabilities are heavy, and Gemlik requires both capex and one-off cash expense. The market does not have to pay in advance just because management wrote down an 8-10% margin. If the margin gets stuck below 8%, BRSAN's global story remains good, but the share price does not.
The kill condition is clear: if the EBITDA margin does not approach 8% in Q2 and Q3, if customer liabilities turn into cash stress rather than delivery, if net financial debt/EBITDA climbs toward 2x, or if the Gemlik move creates disruption in production, this thesis breaks. If the opposite happens, meaning the margin band is reached and cash follows profit, room opens for movement above reasonable value.
BRSAN is not for the impatient net-profit hunter. This stock is for the investor who can read the delivery calendar, weigh the discount and discipline effects of family control at the same time, and wait for the pipe to reach the field. Owning BRSAN is not becoming a partner in steel; it is becoming a partner in steel being delivered on time and at the right margin.