Press Release

Press Release

February 10, 2025

NANDANA METALS AND MINING LIMITED
Rating Assigned

Product	Quantum (Rs. Cr)	Long Term Rating	Short Term Rating
Bank Loan Ratings	50.00	ACUITE BBB- \| Stable \| Assigned	-
Total Outstanding	50.00	-	-
Total Withdrawn	0.00	-	-

Rating Rationale

Acuite has assigned its long-term rating of ‘ACUITÉ BBB-' (read as ACUITE triple B minus) on the Rs. 50.00 Cr. bank facilities of Nandana Metals and Mining Limited (NMML). The outlook is ‘Stable’.

Rationale for Rating
The rating factors in the experienced management and company’s comfortable financial risk profile. The rating also draws comfort from efficient working capital management and the adequate liquidity position. However, the rating is constrained due to moderate scale of operations, vulnerability of profitability to volatility in steel prices and susceptibility to cyclicality and competitive nature of the industry.

About the Company

Incorporated in 2021, Mumbai-based Nandana Metals and Mining Limited (formerly known as Winbuiild Metals Private Limited) is engaged in trading of iron & steel products, metal ores, scrap and coal. The company is operating its business from Nagpur since all the suppliers and customers are Nagpur based. Directors of this company are Mr. Junil Nilesh Patel, Mr. Arpit Mehta, Ms. Jaya Ankur Singhania and Mr. Tushar Rajendra Momaiyah.

Unsupported Rating

Not Applicable

Analytical Approach

Acuite has considered the standalone business and financial risk profile of Nandana Metals and Mining Limited.

Key Rating Drivers

Strengths

Experienced management
The management is having an experience of over a decade in the similar line of business. Mr. Arpit Mehta, is an MBA with over 15 years of experience in the similar line of business, he is ably supported by Mr. Junil Patel, an industrial engineer who adds technical expertise. They are been supported by second line of management having over decade of experience in their respective fields. Acuité believes that NMML will continue to benefit from its experienced management and able to sustain established relations with its customers and suppliers over the medium term.

Comfortable Financial Risk Profile
The financial risk profile of the company is comfortable marked by moderate net worth, gearing and strong debt protection metrics. The tangible net worth of the company is moderate and stood at Rs. 36.68 Cr. as on March 31, 2024 as against Rs. 21.66 Cr. as on March 31, 2023. The debt profile of the company comprises of Rs. 6.95 Cr. of long-term unsecured loans, and the Rs. 7.93 Cr. of short-term unsecure loans from others and Rs. 28.21 Cr. of Long-term borrowings (property loans) as on March 31, 2024. The debt to equity stood at1.17 times as on March 31, 2024 as against 1.43 times as on March 31, 2023. The TOL/TNW stood at 2.88 times as on March 31, 2024, as against 3.32 times as on March 2023. The debt protection metrics remained strong as reflected in an interest service coverage ratio of 6.44 times as on March 31, 2024, as against 6.61 times as on March 2023. Further, the debt service coverage ratio (DSCR) stood at 3.18 times as on March 31, 2024, as against 5.02 times as on March 2023. Acuité believes that financial risk profile of the company is likely to be sustained in near to medium term.

Efficient working capital management
The working capital management of the company is efficient marked by low GCA of 58 days in FY24 as against 34 days in FY23. The company has creditor terms ranging from 0 to 21 days, depending on the products, and debtor terms spanning 15 to 45 days. The creditor days of the company stood at 24 days for FY24 compared against 11 days for FY23 and the debtor days stood at 47 days for FY24 as against 27 days for FY23. The average fund-based working capital utilization stood low at ~40 percent for one month ended December 2024.

Weaknesses

Moderation in scale of operations albeit improving profitability margins
The company’s revenues have moderated and stood at Rs. 626.80 Cr. in FY24 from Rs. 656.74 Cr. in FY23. The scale of operations further continued to remain moderate with revenues of Rs. 391.30 Cr. reported in 9MFY25. The company is planning to expand its product portfolio which is likely to contribute to expanding its operating performance. The EBITDA in absolute terms has consistently improved and stood at Rs. 22.58 Cr. in FY24 as against Rs. 17.10 Cr. in FY23. Further, in 9MFY25 the company has reported EBITDA of Rs.18.04 Cr. The operating profit margin of the company improved and stood at 4.61 per cent in Q3FY25 and 3.60 per cent in FY24 as compared to 2.60 per cent in FY23, the reported growth in profitability is mainly on account of change in product mix. The PAT margins of the company also improved and stood 2.40 per cent in FY24 as compared to 2.00 per cent in FY23.

Susceptibility to cyclicality and competitive nature of industry
NMML is engaged in trading business of steel products. The steel consumption is majorly dependent upon 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 demand of steel and will impact the revenues of the company. Further, the company competes with various players in the organized and unorganized segments in the steel trading industry, thus limiting the pricing power.

Vulnerability of profitability owing to volatility in steel prices
The profitability margins of the company are susceptible to volatility in steel prices. Significant changes in prices of steel impact the margins of the company. Acuité believes that profitability of the company will remain susceptible to volatility in steel prices in the near to medium term.

Rating Sensitivities

Improvement in scale of operation while maintaining profitability margins
Changes in financial risk profile
Deterioration in working capital cycle

Liquidity Position

Adequate

The liquidity position of the company remains adequate. The company generated net cash accruals of Rs.19.45 Cr. in FY24 against repayment obligation of Rs. 3.19 Cr. in the same period. Going forward the company’s repayment obligation provides sufficient cushion to the net cash accruals. The company had a cash balance of Rs. 0.45 crore as on March 31, 2024. The current ratio stood at 1.47 times in FY24. The average fund-based working capital utilization stood at ~40 percent for one month ended December 2024. Acuité believes that the liquidity of the group is likely to remain adequate over the medium term on account of healthy cash accrual over the medium term against repayment obligations.

Outlook: Stable

Other Factors affecting Rating

None

Key Financials

Particulars	Unit	FY 24 (Actual)	FY 23 (Actual)
Operating Income	Rs. Cr.	626.80	656.74
PAT	Rs. Cr.	15.02	13.12
PAT Margin	(%)	2.40	2.00
Total Debt/Tangible Net Worth	Times	1.17	1.43
PBDIT/Interest	Times	6.44	6.61

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

None

Any other information

None

Applicable Criteria

• Default Recognition :- https://www.acuite.in/view-rating-criteria-52.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 :

Not Applicable

Annexure - Details of instruments rated

Lender’s Name	ISIN	Facilities	Date Of Issuance	Coupon Rate	Maturity Date	Quantum (Rs. Cr.)	Complexity Level	Rating
Bank of India	Not avl. / Not appl.	Cash Credit	Not avl. / Not appl.	Not avl. / Not appl.	Not avl. / Not appl.	25.00	Simple	ACUITE BBB- \| Stable \| Assigned
Not Applicable	Not avl. / Not appl.	Proposed Cash Credit	Not avl. / Not appl.	Not avl. / Not appl.	Not avl. / Not appl.	25.00	Simple	ACUITE BBB- \| Stable \| Assigned

Contacts

Mohit Jain
Senior Vice President - Rating Operations

Nidhi Gala
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.

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