| Experienced management and established track record of operations
Mumbai based Shree Venktesh Wires Steel Private Limited (SVWSPL) was incorporated in 1979 by Mr. Binod Bhagat along with his family who have an experience of more than three decades in the aforementioned industry. The extensive experience and their in-depth understanding of the industry have helped the company in developing long-term relationships with its customers and sole supplier Jindal Stainless Limited.
Acuite believes that the company will continue to benefit from its extensive experience of the promoters and healthy relationship with its sole supplier i.e. JSL over the medium term.
Moderate financial risk profile
The company has a moderate financial risk profile marked by moderate net worth, low gearing and healthy debt protection metrics. The net worth of the company stood at Rs. 62.36 crore as on March 31, 2025, as against Rs. 57.70 crore as on March 31, 2024. The increase in the net worth is due to accretion of profits to reserves. The gearing of the company improved and stood at 0.27 times as on March 31, 2025, as against 0.38 times as on March 31, 2024. The total debt of the company consists of unsecured loans from promoters of Rs. 0.25 crore and short-term debt of Rs. 16.82 crore as on March 31, 2025. The DEBT-EBITDA stood at 2.13 times as on 31st March 2025 as against 2.20 times as on 31st March 2024. The interest coverage ratio (ICR) stood at 4.88 times as on March 31, 2025, as against 5.26 times as on March 31, 2024. The Debt Service Coverage Ratio (DSCR) stood at 3.88 times in FY25 compared to 4.17 times in the previous year.
Acuite believes that the financial risk profile is likely to remain moderate in medium term on account of absence of long-term debt and steady net cash accruals
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| Moderately intensive working capital operations
The company’s working capital operations remain moderate, as reflected in gross current assets (GCA) of 82 days as on March 31, 2025, compared with 71 days as on March 31, 2024. The increase in GCA days is primarily due to higher inventory holding, with inventory days rising to 27 days in FY2025 from 19 days in FY2024. Creditor days stood at 9 days in FY2025, while the company had nil creditor days in FY2024, given that SVWSPL sources nearly 97% of its raw material requirement from JSL, which typically offers a short credit window of 0–7 days. Working capital requirements are funded through a combination of cash credit facilities and interest-bearing unsecured loans from directors. The average utilisation of cash credit limits remained moderate at around 87.68 percent for the ten months ended January 2026. Acuite believes that the ability of the company to maintain its moderate working capital operations will remain a key rating sensitivity.
Subdued Revenues while decline in profitability margins in FY2025; however, recovery expected in FY2026
The company reported lower than expected revenues wherein it declined to Rs. 403.83 crore in FY2025, compared to Rs. 411.41 crore in FY2024. This revenue decline is due to lower price realization albeit the increase in the sales volume for FY25. The company has an MoU with Jindal Stainless Limited, stipulating that SVWSPL must source over 97 percent of its total requirement from them, with the remaining 2 to 3 percent procured from other suppliers. In 11MFY2026, the company reported total revenue of Rs. 437.26 crore and is expected to close the fiscal with revenue in the range of Rs. 450.00–Rs. 480.00 crore. Operating margins declined to 1.34 percent in FY2025, down from 1.62 percent in FY2024. The decline in the margins is directly attributable to lower demand in the market as compared against the increasing supply of the steel products. The PAT margin also marginally declined to 1.15 percent in FY2025, compared to 1.45 percent in FY2024. Acuite believes that profitability of the company will remain susceptible to volatility in steel prices and company’s ability to pass on the increased prices to customers in the near to medium term.
Susceptibility to cyclicality nature of industry and competitive nature of industry with supplier concentration
The steel consumption is majorly dependent on the economic activities taking place in and around the country. The end user industry being infrastructure and real state, any significant slowdown in these industries will impact the revenues of steel players. Further, the company competes with various players in the organized and unorganized segments in the steel trading industry. The company has an MoU with JSL, stipulating that SVWSPL must source over 97 percent of its total requirement from them, with the remaining 2 to 3 percent procured from other suppliers. Thus, faces supplier concentration risk limiting the pricing power.
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