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| Product | Quantum (Rs. Cr) | Long Term Rating | Short Term Rating |
| Bank Loan Ratings | 20.00 | ACUITE A | Stable | Upgraded | - |
| Total Outstanding | 20.00 | - | - |
| Total Withdrawn | 0.00 | - | - |
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Rating Rationale |
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Acuité has upgraded its long-term rating of 'ACUITE A' (read as ACUITE A) from 'ACUITE A-' (read as ACUITE A minus) on the Rs. 20.00 crore bank facilities of Jay Jagdamba Forgings Private Limited (JJFPL). The outlook is ‘Stable’.
Rationale for rating The rating upgrade factors in the significant improvement in operating and the financial risk profile of the group marked by growth in scale of operations owing to improved realisation & volumes and substantial infusion of funds by the promoters for the ongoing capex in bright bar division. Further, the rating continues to draw comfort from the established track record of the operations of the group over the years along with the extensive experience of the management in the steel industry. Further, the rating considers healthy financial risk profile, adequate liquidity position along with fund raising plans of Jay Jagdamba Limited (JJL) in the near term. However, these strengths are partly offset by the intensive working capital operations of the group marked by the high gross current asset (GCA) days. The rating continues to remain constrained on account of industry related risk, which is highly susceptible to volatile raw material prices, driven by mismatch in demand-supply dynamics and intensive competition |
| About the Company |
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Mumbai based, Jay Jagdamba Forgings Private Limited (JJFPL) was incorporated in the year 2014 and is engaged in manufacturing of stainless-steel forged products such as forged bars, forged flanges, general forgings, etc. The company is 100 percent owned by Floral Life Pte (Shareholder in JJL – 32.16%).
The current directors of the company are Mr. Narayan Prasad Malpani, Mr. Ramprakash Narayan Prasad Malpani and Mr. Ashutosh Omprakash Malpuria. |
| About the Group |
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Jay Jagdamba Limited
Incorporated in 2004, Jay Jagdamba Limited (JJL) is engaged in manufacturing of stainless steel and allied products like - alloy steel, billets, ingots, hot rolled steel, bright round, angle bars & flanges, with an installed capacity of melting – 84,000 MTPA, rolling mill – 54,000 MTPA, bright bars – 96,000 MTPA, flanges- 8,400 MTPA and seamless pipe – 12,000 MPTA. The manufacturing facility is located at Wada in Maharashtra. Jay Jagdamba Profile Private Limited Jay Jagdamba Profile Private Limited (JJPPL) is a Mumbai based steel manufacturing company incorporated in the year 2006, engaged in manufacturing of stainless steel rolled bars such as round bars, hexagonal bars, square bars, angle bars, flat bars and round cornered square (RCS) bars. The company is wholly owned subsidiary of JJL. Shree Jay Jagdamba Flanges Private Limited Incorporated in 2014, Shree Jay Jagdamba Flanges Private Limited (SJJFPL) is a Mumbai based company engaged in manufacturing of specialised flanges which are used as pipe fittings and valves. The company is 100 percent owned by JJFPL. |
| Unsupported Rating |
| Not Applicable |
| Analytical Approach |
| Extent of Consolidation |
| •Full Consolidation |
| Rationale for Consolidation or Parent / Group / Govt. Support |
| To arrive at the rating, Acuite has consolidated the standalone business and financial risk profiles of Jay Jagdamba Limited (JJL), Jay Jagdamba Forgings Private Limited (JFPL), Jay Jagdamba Profile Private Limited (JJPPL) and Shree Jay Jagdamba Flanges Private Limited (SJJFPL) together referred to as the ‘Jay Jagdamba Group’ (JJG). The consolidation is in view of the common management and strong operational & financial linkages between the entities.
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| Key Rating Drivers |
| Strengths |
| Established track record along with experienced management
Jay Jagdamba Group (JJG) is in the business of manufacturing of stainless-steel ingots, billets, bright bars, RCS, forged products and flanges. It uses imported and domestic stainless-steel scrap which is then processed in its melting & Argon Oxygen Decarburization (AOD) plant to mix various ferroalloys and other elements as required under various standards to produce its finished specialized steel goods. Further, the expansion of company operations with recent capex in bright bar division of Rs.1,053.21 crore is expected to further enhance the market share of the company. The company also has presence in export market which accounts for ~28% of the revenue. The current management is led by Mr. Narayan Prasad Malpani and Mr. Ramprakash Narayan Prasad Malpani who have more than 20 years of experience in the steel industry. Acuite believes that the extensive experience of the management in the steel business is expected to continue benefit the group in growing its business going ahead Healthy financial risk profile The net worth of the group improved and stood healthy at Rs. 1,674.98 crore as on March 31, 2025 (Prov.) as against Rs.669.33 crore as on March 31, 2024 owing to substantial infusion of funds by the promoters for the ongoing capex requirement and accretion of profits to reserves. Therefore, while the debt levels elevated by ~Rs.150 crore in FY25 owing to the expansion capex, the gearing dropped significantly at 0.54 times as of March 31, 2025 (Prov.), compared to 1.13 times as on March 31, 2024. Further, JJL has also filled confidential Draft Red herring Prospectus (DRHP) with SEBI on June 30, 2025 to raise funds vide initial public offering (IPO) in the near term. The debt protection metrics remained moderate with debt service coverage ratio and interest coverage ratio standing at 1.67 times (1.23) times and 3.3 times (2.23) times respectively as on March 31, 2025 (Prov.) (March 31, 2024). Acuite expects the financial risk profile of the company to improve going ahead backed by heathy cash accruals. Improvement in operating performance led by high value products The operating revenues of the group improved in FY25 (Prov.) to Rs.2,199.63 crore backed by the higher volume and realizations, which led the group post ~46% revenue growth from FY24 which stood at Rs.1,501.27 crore. Furthermore, the company’s operating margins also improved to 16.77% in FY25 (Prov.), up from 12.3% in FY24, driven majorly by better absorption of fixed costs and higher share of value-added products. Going ahead, the operating income of the company is expected to improve significantly in FY26, on account of commencement of operations of the additional bright bars capacity. |
| Weaknesses |
| Intensive working capital operations of the group
The working capital operations of the group remains intensive marked by GCA days of 307 days in FY25 (Prov.) as against 288 days in FY24, which mainly comprise of inventory and debtors along with other current assets consisting of advances to suppliers and receivables. The debtor days stood at 121 days in FY25 (Prov.) as against 83 days in FY24. The inventory for the group remained at a level of 134 days in FY25(Prov.) (131 days in FY24). Further, the creditors days also increased and stood at 157 days in FY25 (Prov.) as against 115 days in FY24. The average bank limit utilisation for last 11 months March 2025 stood at 82 percent on closing basis. Acuité believes that the working capital operations of the group will remain at similar levels over the medium term. Inherent cyclical nature of the steel industry The company's performance remains vulnerable to cyclicality in the steel sector given the close linkage between the demand for steel products, domestic and global economy. The end-user segments such as real estate, civil construction and engineering also display cyclicality. Further, operating margins are also vulnerable to volatility in the input prices as well as realisation from finished goods. The prices and supply of the main raw material scrap iron, directly impacts the realisations of finished goods. Any significant reduction in the demand and prices adversely impacting the operating margins and cash accruals of the group will remain a key monitorable. |
| ESG Factors Relevant for Rating |
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On the environmental front, the plant recycles stainless steel scrap, uses energy-efficient induction furnaces, and prioritizes local logistics to cut transport emissions. Further, rainwater harvesting, captive oxygen generation, and a single-site integrated operation reduces carbon footprint and conserve resources.
The group undertakes social initiatives including local hiring, women’s employment with crèche facilities, and high-quality on-site housing for immigrant workers, ensuring inclusivity and reduced commuting emissions. It also focuses on continuous training and development empowering all staff and enhances workplace safety and wellbeing.
On the governance front, the group maintains transparent compliance with environmental and labour regulations, enforces ethical sourcing, and follows robust safety and quality controls. Further the board comprises mix of experienced and knowledgeable members which includes three executive directors and three independent directors.
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| Rating Sensitivities |
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Sustainable improvement in the scale of operations along with strengthening of profitability margins Any significant increase in debt levels affecting the financial risk profile Any improvement in its working capital operations |
| Liquidity Position |
| Adequate |
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The liquidity position of the group is marked adequate basis sufficient net cash accruals (NCA) against repayment obligations. The group generated NCA of Rs.205.81 crore in FY25 (Prov.) as against Rs.78.05 crore of repayment obligations in the same year. Further, the NCA are expected to improve over the medium term backed by improving operating performance. The group also had a healthy cash and bank balance (including free FD) of Rs.61.57 Crore as on March 31, 2025. Moreover, the average bank limit utilisation for last 11 months ended March 2025 stood moderate at 82% on closing basis. The current ratio of the company is stood at 1.21 times in FY25 (Prov.).
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| Outlook - Stable |
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| Other Factors affecting Rating |
| None |
| Particulars | Unit | FY 25 (Provisional) | FY 24 (Actual) |
| Operating Income | Rs. Cr. | 2199.63 | 1501.27 |
| PAT | Rs. Cr. | 167.01 | 53.84 |
| PAT Margin | (%) | 7.59 | 3.59 |
| Total Debt/Tangible Net Worth | Times | 0.54 | 1.13 |
| PBDIT/Interest | Times | 3.30 | 2.23 |
| Status of non-cooperation with previous CRA (if applicable) |
| Not Applicable |
| Any Other Information |
| None |
| Applicable Criteria |
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• Application Of Financial Ratios And Adjustments: https://www.acuite.in/view-rating-criteria-53.htm • Consolidation Of Companies: https://www.acuite.in/view-rating-criteria-60.htm • Default Recognition: https://www.acuite.in/view-rating-criteria-52.htm • Manufacturing Entities: https://www.acuite.in/view-rating-criteria-59.htm |
| Note on complexity levels of the rated instrument |
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| *Annexure 2 - List of Entities (applicable for Consolidation or Parent / Group / Govt. Support) | ||||||||||
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