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| Product | Quantum (Rs. Cr) | Long Term Rating | Short Term Rating |
| Bank Loan Ratings | 28.90 | ACUITE BBB | Stable | Reaffirmed | - |
| Total Outstanding | 28.90 | - | - |
| Total Withdrawn | 0.00 | - | - |
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Rating Rationale |
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Acuité has reaffirmed the long-term rating of ‘ACUITE BBB’ (read as ACUITE triple B) on the Rs. 28.90 crore bank facilities of Venus Alloys Private Limited (VAPL). The outlook is 'Stable'.
Rationale for rating The rating reaffirmation factors the improving financial risk profile marked by improving net worth, low gearing & healthy debt protection metrics. Further, efficient working capital management and adequate liquidity position continues to provide comfort. The rating also factors long track record of operations and experience of the management of more than three decades in the iron and steel industry. However, rating remains constrained owing to the declining scale of operations over the years at steady margins. Further, profit’s margin remains susceptible to raw material price fluctuations and inherent cyclicality and intense competition in the steel industry. |
| About the Company |
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Madhya Pradesh-based, VAPL was incorporated in 1992 by Mr. Sagar Mal Jain, Mr. Pradeep Kimtee, Mr. Abhay Porwal and Mr. Komal Singh Duggad. VAPL is engaged in the manufacturing of M.S. billets and TMT bars with installed capacities of 1,50,000 MTPA and 1,42,000 MTPA respectively. It manufactures TMT bars and rods of different sizes ranging from 8 mm to 32 mm diameters.
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| Unsupported Rating |
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Not applicable
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| Analytical Approach |
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Acuité has considered the standalone business and financial risk profiles of VAPL to arrive at this rating.
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| Key Rating Drivers |
| Strengths |
| Experienced management and semi-integrated operations
Incorporated in 1992, VAPL is promoted by Mr. Sagar Mal Jain, Mr. Pradeep Kimtee, Mr. Abhay Porwal, Mr. Komal Singh Duggad and their respective families. The promoters have over three decades of experience in the iron & steel manufacturing business in India. The company benefits from the rich experience of its promoters, which is reflected by its longstanding relations with both customers and suppliers. Prior to FY2021, the Company was engaged in manufacturing of ingot and billets. It forward integrated its operations and began manufacturing of TMT bars by end of FY2021.
Moderate financial risk profile The financial risk profile of the company is moderate marked by moderate net worth, low gearing and comfortable debt protection metrics. The tangible net worth of the company increased to Rs. 58.57 Cr as on March 31, 2025 from Rs. 51.46 Cr as on March 31, 2024 due to accretion of reserves. Gearing of the company improved Y-0-Y and stood at 0.37 times as on March 31,2025 as compared to 0.73 times and 1.13 times as on March 31,2024 and March 31,2023 respectively. The debt protection metrics of the company also improved marked by healthy interest coverage ratio at 6.85 times and comfortable DSCR at 1.82 times as on March 31,2025. Acuité believes that the financial risk profile of the company will improve on account of steady net cash accruals with no major debt funded capex plans.
Efficient working capital management The working capital of VAPL are efficient marked by low gross current assets (GCA) and low bank limit utilisation. GCA stood at 50 days as on March 31, 2025 (41 days as on March 31, 2024) driven by stable receivables and inventory days. The inventory days stood at 30 days as on March 31,2025 (21 days as on March 31,2024). Collection from debtors is efficient as reflected by receivable days of 10 days as on March 31,2025 (8 days as on March 31,2024). Therefore, the average fund-based bank limit utilization stood low at 29.90 percent over the last twelve months ended, September 2025.
Acuité believes that the working capital operations of the VAPL will remain at the same levels as evident from efficient collection mechanism and low inventory holding over the medium term. |
| Weaknesses |
| Declining scale of operations at steady margins
The revenue of the company has been declining over the past three years, stood at Rs 448.07 Cr in FY2025, Rs 524.92 Cr in FY2024 and Rs 570.44 Cr in FY2023. The moderation is due to dip in overall volume and price realisations. Further, operating margins have remained steady with moderate fluctuations, stood at 3.43 percent in FY2025, 2.76 percent in FY2024, 3.84 percent in FY2023. Till Sep-25 it has achieved the revenue of Rs 225.81 Cr. Acuité believes that the ability of the company to improve its scale of operations and profitability will going to remain a key monitorable over the medium term. Profit margins are susceptible to raw material price fluctuations VAPL’s raw materials constitute more than 75 percent of its total cost, and the raw material prices (Steel) are volatile in nature. Any substantial movement in the raw material prices could impact the operating margins though the back-to-back order policy of the company hedges the margins to an extent. Inherent cyclicality in the steel industry and intense competition The steel industry is highly fragmented and unorganized. VAPL is exposed to intense competitive pressure from large number of organized and unorganized players with low entry barriers coupled with inherent cyclical nature of the steel industry. |
| Rating Sensitivities |
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| Liquidity Position |
| Adequate |
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The liquidity position is adequate marked by net cash accruals of Rs.11.25 Cr as on March 31, 2025 as against long term debt repayment of Rs. 5.15 Cr over the same period. Going forward, the net cash accruals are expected to remain in the range of Rs 12.00 Cr to 14.00 Cr as against minimal long term debt repayment of Rs 1.29 Cr in near to medium terms The cash and bank balances (including free fixed deposit) stood at Rs. 9.67 Cr as on March 31, 2025. The current ratio stood healthy at 1.82 times as on March 31, 2025. The average fund-based bank limit utilization stood low at 29.90 percent over the last twelve months ended, September 2025 giving additional liquidity cushion in the form of undrawn limits.
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| Outlook-Stable |
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| Other Factors affecting Rating |
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None
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| Particulars | Unit | FY 25 (Actual) | FY 24 (Actual) |
| Operating Income | Rs. Cr. | 448.07 | 524.92 |
| PAT | Rs. Cr. | 7.10 | 5.13 |
| PAT Margin | (%) | 1.59 | 0.98 |
| Total Debt/Tangible Net Worth | Times | 0.37 | 0.73 |
| PBDIT/Interest | Times | 6.85 | 3.64 |
| Status of non-cooperation with previous CRA (if applicable) |
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Not applicable
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| Any other information |
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None
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| Applicable Criteria |
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• Default Recognition :- https://www.acuite.in/view-rating-criteria-52.htm • Manufacturing Entities: https://www.acuite.in/view-rating-criteria-59.htm • Application Of Financial Ratios And Adjustments: https://www.acuite.in/view-rating-criteria-53.htm |
| Note on complexity levels of the rated instrument |
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