Experienced Promoter with Established Industry Background
Ksquare Metals Trading Private Limited (KMTPL), incorporated in 2017, is led by its promoter, Himanshu Kothari, who has over a decade of experience in aluminium trading. He has a background in business and professional qualifications, with exposure to operations, finance, and strategy. The promoter is actively involved in the company’s business activities and decision-making. Acuité notes that his industry relationships and operational understanding support KMTPL’s business continuity and growth prospects.
Increased scale of operations and healthy margins
KMTPL’s revenue increased significantly to Rs. 767.29 Cr in FY2026 (Prov.) from Rs. 402.12 Cr in FY2025. The growth in revenues in FY2026 was primarily driven by the introduction of new product lines, namely aluminium ingots, coils, and wire rods. Additionally, the company benefited from improved realisations in the previous year. In FY2026, KMTPL also entered into a procurement contract with NALCO Limited for approximately 500 tonnes of aluminium ingots and wire rods monthly, which supported better margins on subsequent sales to customer. The operating profit margin stood at 4.25% in FY2026(Prov.) as compared to 4.30 % in FY2025. Furthermore, the company reported PAT margin of 2.25 % in FY2026(Prov.) as compared to 1.15 % in FY2025. Acuité believes the profitability margin of the company will be at healthy levels over the medium term.
Above average financial risk profile
The financial risk profile of the company is marked by increasing net worth, moderate gearing and healthy debt protection metrics. The tangible net worth of the company increased to Rs 75.36 crore as on FY2026(Prov.) from Rs 38.21 crore in FY2025, on account of accretion of profit in reserves. Further, in FY2026, the company introduced share application money pending allotment of Rs. 19.87 Cr. as per the sanction conditions of its cash credit facility from State Bank of India. Additionally, unsecured loans were subordinated to debt, Rs. 21.43 Cr. in FY2026. The company is expected to further strengthen its capital base through equity infusion in line with its growing scale of operations. For FY2026 (Prov.), the gearing of the company stood at 1.60 times as compared to 1.43 times in FY2025. The increase in leverage is primarily driven by higher reliance on short-term debt to support the company’s working capital requirements. The Total Outside Liabilities/Tangible Net Worth (TOL/TNW) stood at 2.13 times in FY2026(Prov.) as compared to 2.12 times in FY2025. The Debt to EBITDA stood at 3.60 times in FY2026(Prov.) as against 3.13 times in FY2025. The Interest Coverage Ratio (ICR) stood at 2.88 times in FY2026(Prov.) and Debt Service Coverage Ratio (DSCR) stood at 1.47 times in FY2026(Prov.) . Net cash accruals to total debt (NCA/TD) stood at 0.15 times in FY2026(Prov.) from 0.09 times in FY2025. The financial risk profile of the company is expected to improve, in absence of any significant debt funded capex in the near term.
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| Intensive Working Capital Management
KMTPL’s operations remain moderately working capital intensive, with GCA days increasing to 110 days in FY2026(Prov.) from 105 days in 2025. The elongation is largely on account of high receivables and significant advances to suppliers (around Rs 19 crore), reflected under other current assets. The debtor days stood at 77 days in FY2026(Prov.) as compared to 76 days in FY2025. The company extends credit of 45–60 days for aluminium foil customers and 10–15 days for aluminium ingots, which is broadly in line with industry practices. KMTPL has availed bill discounting facilities; however, the exposure remains minimal. The inventory days stood at 23 days in FY2026(Prov.) as compared to 23 days in FY2025. The creditor period of the company stood at 17 days in FY2026(Prov.) as compared to 23 days in FY2025. Supplier terms involve advance payments for imports and ingots, while relatively better credit terms are available from domestic suppliers at around 10-20 days. Acuité believes that the working capital operations of the company will remain at the similar levels over the medium term on account of nature of business.
Susceptibility to cyclical nature of industry
KMTPL’s performance remains linked to the overall economic environment, with demand for aluminium products largely driven by end-user industries such as infrastructure and industrial sectors. Any slowdown in these sectors may adversely impact the company’s revenues. Further, the company operates in a highly competitive trading industry with presence of both organized and unorganized players, exerting pressure on margins. Additionally, KMTPL has a significant reliance on key suppliers for procurement of aluminium products, exposing it to supplier concentration risk and limiting its pricing flexibility.
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