­Incorporated in 2002, Chhattisgarh based Mahendra Sponge and Power Limited has an integrated steel manufacturing facility. The company is engaged in business of manufacturing of sponge iron, Billet, re-rolled products like MS Round, MS Square, MS Flat and MS Angles. Mahendra Sponge and Power Limited also has a captive power plant with a capacity of 8 MW (4 MW Waste Heat recovery based and 4 MW Atmospheric Fluidized Bed Combustion). The power plant caters to the entire power requirement of the company. In addition to this, MSPL is also engaged in trading of domestic and imported coal and iron ore pellets. The company is managed by Mr. Deepesh Agrawal and other directors.

­Animesh Ispat Private Limited:- Incorporated in 2004, Chhattisgarh based Animesh Ispat Private Limited is engaged in business of generation of power from biomass-based power plant of 10 MW of which 8.91MW is supplied through firm power purchase agreement with Chhattisgarh State Power Distribution Company Limited (CSPDCL) for a period of 20 years. The firm has resumed the operations of the power plant since 2017 and is operating at full capacity. The company is also engaged in the business of trading in imported coal, export of iron ore fines and manufactured steel products. The company is managed by Mr. Deepesh Agrawal and other directors.

Mahendra Power Private Limited:- Incorporated in 2008, Chhattisgarh based Mahendra Power Private Limited is engaged in business of generation of power from biomass-based power plant of 10 MW of which 8.91MW is supplied through firm power purchase agreement with Chhattisgarh State Power Distribution Company Limited (CSPDCL) for a period of 20 years. The firm has resumed the operations of the power plant since 2017 and is operating at full capacity. The company is also engaged in the business of trading in imported coal, iron ore. The company is managed by Mr. Deepesh Agrawal and other directors.

Mahendra Strips Private Limited:- Incorporated in 1996, Chhattisgarh based Mahendra Strips Private Limited is presently engaged in the business of imported coal. It is focused on procurement and supply of imported coal to various steel and power generation companies. The company was earlier engaged in manufacturing of ingots, and rerolled products like M.S Round, MS Square, MS Flat, MS Angles. The manufacturing unit was later sold off for the purpose of consolidation of business. The company is managed by Mr. Deepesh Agrawal and other directors. Aarna Resources Pte Limited formed as a subsidiary under Mahendra Strips Private Limited in 2023.

• ­Growth in the scale of operations while improving profitability margin
• Elongation of working capital cycle

­The group’s liquidity is adequate marked by steady net cash accruals of Rs. 107.81 crore in FY2024 (Prov.) as against long-term debt repayment of Rs. 10.83 crore over the same period. The cash and bank balances of the group stood at Rs. 218.54 crore in FY2024 (Prov.) as compared to Rs. 91.46 crore in FY2023. The current ratio remains comfortable at similar level of 1.45 times in FY2024 (Prov.) and 1.40 times in FY2023. The fund-based limit remains utilised moderately at 73 percent over the 6 months ended March 2024. However, working capital management of the group is marked by high Gross Current Assets (GCA) of 113 days in FY2024 (Prov.) as compared to 94 days in FY2023. Acuité believes that going forward the group will maintain adequate liquidity position due to steady accruals.

­Acuité believes that the outlook on Mahendra Group will remain 'Stable' over the medium term on account of the long track record of operations, experienced management, sound business risk profile and healthy financial risk profile. The outlook may be revised to 'Positive' in case of significant growth in revenue while achieving sustained improvement in operating margins, capital structure and working capital management. Conversely, the outlook may be revised to ‘Negative’ in case of decline in the group’s revenues or profit margins, or in case of deterioration in the group’s financial risk profile or further elongation in its working capital cycle.

­In order to inform the investors about complexity of instruments, Acuité has categorized such instruments in three levels: Simple, Complex and Highly Complex. Acuite’ s categorisation of the instruments across the three categories is based on factors like variability of the returns to the investors, uncertainty in cash flow patterns, number of counterparties and general understanding of the instrument by the market. It has to be understood that complexity is different from credit risk and even an instrument categorized as 'Simple' can carry high levels of risk. For more details, please refer Rating Criteria “Complexity Level Of Financial Instruments” on www.acuite.in.