A new mathematical equation for the calculation of the yield stress in the case of a simple upsetting-compression test is proposed for powder metallurgy-sintered preforms of material. A new yield function developed by Doraivelu et al. which takes into account of the hydrostatic stress, is considered for the development of the above equation. The ratio of the yield stress of the P/M porous material to the yield stress of cent percent dense material is found to be increasing with increase in deformation strain. Further, a theory for simple plastic instability and work hardening rate of porous P/M material has been developed.