Press Release

Press Release

August 14, 2025

METALLOYS RECYCLING LIMITED
Rating Assigned and Reaffirmed

Product	Quantum (Rs. Cr)	Long Term Rating	Short Term Rating
Bank Loan Ratings	7.60	ACUITE BBB- \| Stable \| Assigned	-
Bank Loan Ratings	81.00	ACUITE BBB- \| Stable \| Reaffirmed \| Negative to Stable	-
Total Outstanding	88.60	-	-
Total Withdrawn	0.00	-	-

Rating Rationale

Acuite has reaffirmed its long-term rating of ‘ACUITE BBB-’ (read as ACUITE triple B minus) on Rs.81.00 Cr. bank facilities of Metalloys Recycling Limited (MRL). The outlook is revised from ‘Negative’ to ‘Stable’.
Further, Acuite has assigned the long-term rating of ‘ACUITE BBB-’ (read as ACUITE triple B minus) on the Rs. 7.60 crore bank facilities of Metalloys Recycling Limited. The outlook is ‘Stable’.

Rationale for Rating

The revision in outlook reflects the steady scale of operations backed by marginal increase in operating income and stable operating margin. However, the profitability of the company declined due to high interest costs post removal of subvention of interest expenses on export packing credit facility.
The company is in the process of merging with Nico Extrusions Limited (NEL) which is in related business and the merger scheme has been submitted to National Company Law Tribunal (NCLT) in March 2024. The merger between MRL and NEL is pending before the NCLT and expected to be completed by end of FY26. This will boost the present business risk profile and aid in scaling up the operations. The merger remains a key monitorable factor.
The company has a moderate financial risk profile marked by increase in networth due to accretion of reserves, high gearing and moderate debt protection metrics. While the working capital cycle has marginally improved but remains intensive due to inventory days. Furthermore, the company's liquidity position continues to remain adequate backed by sufficient accruals against debt repayments, comfortable current ratio and partially debt funded capex plans. The rating draws benefit from the management's extensive experience in the scrap recycling sector and established relationship with customers and suppliers. However, the rating is constrained by presence in the cyclical steel industry leading to pressure on margins and susceptibility to foreign currency fluctuations.

About the Company

Incorporated in 1987, MRL is a Mumbai based company promoted by Mr. Ambalal Porwal and Mr. Vijay Mohanlal Porwal, who possesses over 3 decades of experience in the industry. The company is engaged in the processing and trading of secondary ferrous and non-ferrous metals, and its main products are copper scrap, aluminium scrap, zinc scrap, brass scrap, magnesium scrap, nickel scrap and blended stainless-steel scrap. The products sold by MRL are used as basic raw materials for various copper alloys, various grades of brass, zinc alloys, aluminium alloys, nickel alloys and stainless-steel production. MRL’s processing unit is located at Kalyan (Thane), and office in Andheri (Mumbai). Present directors of the company are Mr. Ambalal Mohanlal Porwal, Mr. Vijay Mohanlal Porwal, Mr. Shernikkumar Ranjitmalji Shah, Mr. Ratan Lal Narayan Jain, and Mrs. Nirmala Vijay Porwal.

Unsupported Rating

Not Applicable

Analytical Approach

Acuité has taken a standalone view of the business and financial risk profile of the company to arrive at the rating.

Key Rating Drivers

Strengths

Benefits derived from experience management
MRL is being promoted by Mr. Ambalal Mohanlal Porwal, Mr. Vijay Mohanlal Porwal, Mr. Shernikkumar Ranjitmalji Shah, Mr. Ratan Lal Narayan Jain, and Mrs. Nirmala Vijay Porwal who possess over 3 decades of experience in the industry. The extensive experience of the promoters and the established presence of the company has helped in maintaining healthy relations with reputed customers and suppliers. Acuite believes that the company will benefit from its experienced management and strong relation with its customers and suppliers.

Steady scale of operations
The operating income stood at Rs. 460.84 crore in FY2025 (Prov.) as against Rs. 431.40 crore in FY2024. This is mainly due to increase in sales volume and better price realizations of aluminium and stainless scrap and contributions from new products i.e. PCB Scrap and non-metallic waste hard rubber. The outstanding order book stood at Rs.79.32 Cr. as of July 2025 with a rolling pipeline of new orders.
The operating margin of the company remained at similar levels which stood at 3.20 percent in FY2025 (Prov.) as against 3.18 percent in FY2024. Forex fluctuations would remain a key monitorable factor as 90% of the raw materials are imported. The employee costs have decreased in FY25 (Prov.) as company is moving towards automation process, reducing reliance on manual labour. This shift is expected to continue, leading to further cost efficiencies in the coming years. The PAT margins stood at 0.96 percent in FY2025 (Prov.) as against 1.19 percent in FY2024 mainly due to increase in interest costs by 3% post removal of interest subvention on Export Packing Credit facility. Acuite believes the scale of operations will improve over the medium term backed by order inflow, merger plan and expansion in capacity plans.

Moderate Financial Risk profile
The company has a moderate financial risk profile marked by steady net worth, high gearing and moderate debt protection metrics. The tangible net worth stood at Rs. 65.92 crore as on FY2025 (Prov.) as against Rs. 61.50 crore as on FY2024 due to small accretion to reserves. Gearing levels (debt-to-equity) weakened slightly and stood at 1.40 times in FY2025 (Prov.) as against 1.34 times in FY2024 due to higher short-term borrowings for working capital requirements and debt undertaken for capex plans. The Total outside liabilities to total net worth (TOL/TNW) stood at 1.72 times as on FY2025 (Prov.) compared to 1.82 times as on FY2024. The debt protection metrics of the company stood moderate as indicated from the interest coverage ratio at 2.12 times for FY2025 (Prov.) as against 2.77 times in FY2024 and Debt Service Coverage Ratio stood at 1.40 times in FY2025 (Prov.) as compared to 1.49 times in FY2024. Acuite believes that going forward, the financial risk profile of MRL will continue to remain on similar lines backed by partially debt funded capex plans and merger plans.

Weaknesses

Intensive working capital cycle
The working capital cycle was intensive as reflected from GCA days of 129 days in FY2025 (Prov.) as against 135 days in FY2024. Inventory days stood at 78 days in FY2025 (Prov.) as against 88 days in FY2024, due to mixed scrap usage and raw material buildup for new capacity. Debtor days improved to 18 days in FY2025 (Prov.) as compared to 30 days in FY2024. The credit terms with customers are on average of ~15-30 days. Further, Creditor days stood at 11 days in FY2025 (Prov.) as compared to 21 days in FY2024. The credit term terms with suppliers are 30 days. Acuite believes that the working capital cycle is likely to remain at similar levels over the medium term.

Intense Competition and Volatility in Raw Material Prices
The industry remains fragmented and unorganized due to presence of various players with limited differentiation in end products. The industry is also exposed to cyclicality and volatility of raw material prices. Such volatility leads to pressures on profitability margins as is reflected from operating margin of 3.20 percent in FY2025 (prov.) compared to 3.18 percent in FY2024. Acuite believes that the operating margin would continue to remain susceptible to changes in volatility of pricing of raw materials as well as competition in the steel industry.

Rating Sensitivities

Timely merger with Nico Extrusion Limited
Movement in operating income and profitability margins
Working capital cycle
Debt protection metrics

Liquidity Position

Adequate

The company’s liquidity is adequate backed by reduced but sufficient Net Cash Accruals (NCA) of Rs. 5.91 crore against Long-Term Debt Repayment (CPLTD) of Rs. 2.18 crore in FY2025 (prov.). Additionally, the Current Ratio stood comfortable at 1.49 times in FY2025 (Prov.). The working capital limits are utilized high at ~95 percent on consolidated basis for 12 months ended March 2025. The cash and bank balance stood at Rs. 3.53 crore as on FY2025 (Prov.). Furthermore, the company has capex plans to enhance their scale of operations which is expected to be funded by a mix of external debt and internal accruals. Acuite expects liquidity profile of the company to remain adequate due to sufficient accruals against debt repayments, moderate current ratio, high bank limit utilization and partially debt funded capex plans over the medium term.

Outlook: Stable

Other Factors affecting Rating

None

Key Financials

Particulars	Unit	FY 25 (Provisional)	FY 24 (Actual)
Operating Income	Rs. Cr.	460.84	431.40
PAT	Rs. Cr.	4.43	5.14
PAT Margin	(%)	0.96	1.19
Total Debt/Tangible Net Worth	Times	1.40	1.34
PBDIT/Interest	Times	2.12	2.77

Status of non-cooperation with previous CRA (if applicable)

Not Applicable

Any other information

None

Applicable Criteria

• 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
• Trading Entities: https://www.acuite.in/view-rating-criteria-61.htm

Note on complexity levels of the rated instrument

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.

Rating History

Date	Name of Instruments/Facilities	Term	Amount (Rs. Cr)	Rating/Outlook
17 May 2024	Cash Credit	Long Term	7.23	ACUITE BBB- \| Negative (Reaffirmed)
	Cash Credit	Long Term	23.00	ACUITE BBB- \| Negative (Assigned)
	Cash Credit	Long Term	5.10	ACUITE BBB- \| Negative (Assigned)
	Cash Credit	Long Term	24.50	ACUITE BBB- \| Negative (Reaffirmed)
	Cash Credit	Long Term	6.63	ACUITE BBB- \| Negative (Assigned)
	Cash Credit	Long Term	5.77	ACUITE BBB- \| Negative (Reaffirmed)
	Cash Credit	Long Term	7.50	ACUITE BBB- \| Negative (Reaffirmed)
	Cash Credit	Long Term	1.27	ACUITE BBB- \| Negative (Assigned)
26 Apr 2024	Cash Credit	Long Term	7.50	ACUITE BBB- \| Negative (Reaffirmed)
	Cash Credit	Long Term	5.77	ACUITE BBB- \| Negative (Reaffirmed)
	Cash Credit	Long Term	24.50	ACUITE BBB- \| Negative (Reaffirmed)
	Cash Credit	Long Term	7.23	ACUITE BBB- \| Negative (Reaffirmed)
01 Feb 2023	Cash Credit	Long Term	7.50	ACUITE BBB- \| Stable (Upgraded from ACUITE BB+ \| Stable)
	Cash Credit	Long Term	5.77	ACUITE BBB- \| Stable (Upgraded from ACUITE BB+ \| Stable)
	Cash Credit	Long Term	24.50	ACUITE BBB- \| Stable (Upgraded from ACUITE BB+ \| Stable)
	Cash Credit	Long Term	7.23	ACUITE BBB- \| Stable (Upgraded from ACUITE BB+ \| Stable)
21 Nov 2022	Cash Credit	Long Term	7.50	ACUITE BB+ \| Stable (Reaffirmed)
	Cash Credit	Long Term	5.77	ACUITE BB+ \| Stable (Reaffirmed)
	Cash Credit	Long Term	24.50	ACUITE BB+ \| Stable (Reaffirmed)
	Cash Credit	Long Term	7.23	ACUITE BB+ \| Stable (Reaffirmed)
24 Jan 2022	Cash Credit	Long Term	3.50	ACUITE BB+ \| Stable (Upgraded from ACUITE BB- \| Stable)
	Proposed Long Term Bank Facility	Long Term	3.73	ACUITE BB+ \| Stable (Upgraded from ACUITE BB- \| Stable)
	Cash Credit	Long Term	24.50	ACUITE BB+ \| Stable (Upgraded from ACUITE BB- \| Stable)
	Cash Credit	Long Term	5.77	ACUITE BB+ \| Stable (Upgraded from ACUITE BB- \| Stable)
	Cash Credit	Long Term	7.50	ACUITE BB+ \| Stable (Upgraded from ACUITE BB- \| Stable)

Annexure - Details of instruments rated

Lender’s Name	ISIN	Facilities	Date Of Issuance	Coupon Rate	Maturity Date	Quantum (Rs. Cr.)	Complexity Level	Rating
State Bank of India	Not avl. / Not appl.	Cash Credit	Not avl. / Not appl.	Not avl. / Not appl.	Not avl. / Not appl.	16.00	Simple	ACUITE BBB- \| Stable \| Reaffirmed \| Negative to Stable
Union Bank of India	Not avl. / Not appl.	Cash Credit	Not avl. / Not appl.	Not avl. / Not appl.	Not avl. / Not appl.	29.60	Simple	ACUITE BBB- \| Stable \| Reaffirmed \| Negative to Stable
Yes Bank Ltd	Not avl. / Not appl.	Cash Credit	Not avl. / Not appl.	Not avl. / Not appl.	Not avl. / Not appl.	23.00	Simple	ACUITE BBB- \| Stable \| Reaffirmed \| Negative to Stable
HDFC Bank Ltd	Not avl. / Not appl.	Packing Credit	Not avl. / Not appl.	Not avl. / Not appl.	Not avl. / Not appl.	12.40	Simple	ACUITE BBB- \| Stable \| Reaffirmed \| Negative to Stable
HDFC Bank Ltd	Not avl. / Not appl.	Packing Credit	Not avl. / Not appl.	Not avl. / Not appl.	Not avl. / Not appl.	7.60	Simple	ACUITE BBB- \| Stable \| Assigned

Contacts

Mohit Jain
Chief Analytical Officer - Rating Operations

Manvi Khaitan
Associate Analyst - Rating Operations

Contact details exclusively for investors and lenders

Mob: +91 8591310146
Email ID: analyticalsupport@acuite.in

About Acuité Ratings & Research

Acuité is a full-service Credit Rating Agency registered with the Securities & Exchange Board of India (SEBI). The company received RBI Accreditation as an External Credit Assessment Institution (ECAI) for Bank Loan Ratings under BASEL-II norms in the year 2012. Acuité has assigned ratings to various securities, debt instruments and bank facilities of entities spread across the country and across a wide cross section of industries. It has its Registered and Head Office in Kanjurmarg, Mumbai.

Disclaimer: An Acuité rating does not constitute an audit of the rated entity and should not be treated as a recommendation or opinion that is intended to substitute for a financial adviser's or investor's independent assessment of whether to buy, sell or hold any security. Ratings assigned by Acuité are based on the data and information provided by the issuer and obtained from other reliable sources. Although reasonable care has been taken to ensure that the data and information is true, Acuité, in particular, makes no representation or warranty, expressed or implied with respect to the adequacy, accuracy or completeness of the information relied upon. Acuité is not responsible for any errors or omissions and especially states that it has no financial liability whatsoever for any direct, indirect or consequential loss of any kind, arising from the use of its ratings. Ratings assigned by Acuité are subject to a process of surveillance which may lead to a revision in ratings as and when the circumstances so warrant. Please visit our website (www.acuite.in) for the latest information on any instrument rated by Acuité. Please visit https://www.acuite.in/faqs.htm to refer FAQs on Credit Rating.

Note: None of the Directors on the Board of Acuité Ratings & Research Limited are members of any rating committee and therefore do not participate in discussions regarding the rating of any entity.