Press Release August 18, 2026 NILKANTH FERRO LIMITED Rating Reaffirmed

Product	Quantum (Rs. Cr) (SEBI)	Quantum (Rs. Cr) (Other FSR)	Long Term Rating	Short Term Rating	Regulated By
Bank Loan Ratings	0.00	30.42	ACUITE BBB | Stable | Reaffirmed	-	RBI
Bank Loan Ratings	0.00	58.58	-	ACUITE A2 | Reaffirmed	RBI
Total Outstanding	0.00	89.00	-	-	-
Total Withdrawn	0.00	0.00	-	-	-

Note:- For activities or ratings of instruments falling under the purview of Financial Sector Regulators other than SEBI, the grievance / dispute redressal mechanisms and investor protection mechanisms provided by SEBI shall not be available.

Rating Rationale

­Acuité has reaffirmed the long-term rating of  ‘ACUITE BBB' (read as ACUITE triple B) and short-term rating of ‘ACUITE A2’ (read as ACUITE A two) on the Rs. 89.00 Cr. bank facilities of Nilkanth Ferro Limited (NFL). The outlook remains ‘Stable’. Rational For Rating The rating reaffirmation takes into account of moderate financial risk profile marked by below unity gearing (debt/equity) ratio with no long-term debt availed by the company. Further, the rating draws comfort from its long track record and established position in the ferro and silico manganese industry along with extensive experience of the promoters. However, the rating is constrained on account of moderately intensive working capital operations. Furthermore, Acuite takes note of the moderation in operating performance of the company in FY 26 due to temporary plant shutdown, halt of conversion work with Tata Steel Limited (TSL) with high power and raw material costs thereby leading to negative EBITDA during the year. However, Acuite expects the performance to reinstate in FY 27 with growth in topline and improvement in margins, which remains a key rating monitorable.

About the Company

Incorporated in the year 2004, Nilkanth Ferro Limited, is engaged in the manufacturing of ferro manganese and silico manganese. The company is based in West Bengal. Present directors of the company are Mr. Amar Nath Atri, Mr. Ram Awatar Sharma, Ms. Sharda Sharma, Mr. Shankar Kumar Sharma, Mr. Parmeshwar Sharma and Mr. Bimal Agarwal.

Unsupported Rating

­Not Applicable

Analytical Approach

­Acuité has considered the standalone business and financial risk profile of NFL to arrive at the rating.

Key Rating Drivers

Strengths

­Experienced management with strong customer base. NFL has developed a strong customer base over the years with the assistance of its management and is headed by Mr. Ram Awatar Sharma having over two decades of experience in the ferro alloys industry. The company’s clientele base includes leading steel producers majorly including public sector undertakings. The company has an exclusive tie up with Tata Steel Limited for processing certain grade of alloy. Acuité believes that the extensive experience of the management and the healthy clientele relationships will continue to benefit the company going forward. Moderate financial risk profile While the net worth of the company stood declined at Rs. 65.16 Cr. in FY 26 (Prov.) as compared to Rs. 84.09 Cr. in FY 25 owing to losses during the year, however, gearing ratio stood comfortable and remained below unity. The total debt of the company in FY 26 (Prov.) stood at Rs.13.24 Cr. which only consist of short-term borrowings. The company doesn’t have any long-term debt. Total Outside Liabilities/Tangible Net Worth (TOL/TNW) stood comfortable at 0.99 times in FY 26 (Prov.) as against 0.77 times in FY 25.

Weaknesses

­Moderation in scale of operations and profitability in FY26 expected to reinstate in FY27 The revenue of the company stood at Rs. 256.62 Cr. in FY 26 (Prov.) compared to Rs. 277.87 Cr. in FY 25. The revenue of the company decreased in FY 26 primarily caused by two transformer breakdowns at the plant between September and October 2025. This incident forced a complete production halt during those two months. Following the breakdowns, factory capacity utilization remained low. Further, revenue from conversion job work declined in FY 26 because TATA Steel Limited (TSL) was unable to supply required raw material. Moreover, the EBITDA margin stood negative at (6.13) percent in FY 26 (Prov.) as against 2.51 percent in FY 25 and 2.75 percent in FY 24. The EBITDA margin stood negative, majorly due to a sharp rise in electricity expenses owing to increase in tariffs by Damodar Valley Corporation (DVC). Further, DVC charges the company for some additional MVC charges, for whose recovery company has filed a suit at Supreme Court. Furthermore, the raw material cost increased in comparison with previous year mainly due to the increase in the imported material price due to geopolitical issues, which was not passed to customers immediately. The PAT margin stood negative at (7.38) percent in FY26(Prov.) as compared to 1.05 percent in FY 25. While FY26 was an exceptional year, going forward, Acuite expects the performance to be reinstated in FY27 with growth in revenue and margins, which remains a key rating monitorable. The company reported revenue of Rs 78.28 Cr. till July 2026.   Moderately intensive working capital cycle The company’s moderately intensive working capital requirement is marked by improving gross current assets (GCA) of 112 days in FY 26 (Prov.) as against 126 days in FY 25. The GCA days are primarily on account of the inventory holding which stood at 70 days in FY 26 (Prov.) as against 96 days in FY 25. The company holds inventory for a period of 2 months to 2.5 months with majority of the material being imported. However, the debtor days stood comfortable at 21 days in FY 26 (Prov.) as against 24 days in FY 25.  The general terms of credit for debtors is approximately 21-30 days. The creditor days of the company is high, stood at 96 days in FY 26 (Prov.) as against 98 days in FY 25. The company settles its trade transactions with suppliers through Letters of Credit (LC). Highly competitive industry and susceptibility of profits to raw material prices and forex risks The ferro alloys industry is marked by the presence of many organized and unorganized players owing to low entry barriers. The company faces intense competition from the presence of several mid to large-size players in the industry. The presence of many players has a direct impact on pricing and restricts bargaining power thereby, having an adverse impact on margins. Furthermore, NFL’s raw material constitute around 50 percent of its total cost and the raw material prices are volatile in nature. The company also imports ~50 percent and thus is susceptible to forex fluctuations as well. However, the forex fluctuation risk is mitigated to an extent by way of a forward cover to hedge the exposure in foreign currency.

Rating Sensitivities

Potential triggers (individual or collective) for an upward rating action:

Increase in operating performance with revenue of more than 350.00 Cr. Improvement in working capital cycle.

Potential triggers (individual or collective) for a downward rating action:

De-growth in operating performance with revenues falling below Rs 200 Cr. or significant decline in profitability margins. Any further elongation in working capital management or increase in debt levels leading to deterioration in financials risk profile and liquidity.

Liquidity Position

Adequate

The net cash accruals stood at Rs. (17.30) Cr. in FY 26 (Pov.) compared to Rs.4.65 Cr. in FY 25. While accruals were insufficient the service the interest obligations, the same was managed through available liquid cash and working capital management. The company does not have any long-term debt obligations. Going forward, NCAs are expected to remain in the range of Rs. 4.00-7.00 Cr. for FY 27 and FY 28 against no repayment obligations. The current ratio stood moderate at 1.32 times in FY 26 (Prov.).  The unencumbered cash and bank deposits (including FDs) stood at Rs. 3.57 Cr on March 31, 2026(Prov.). Additionally, the average fund-based utilization stood moderate at ~66.00 percent and non-fund-based limit utilization stood at ~88.00 percent for the last six months ended June 2026 which provides additional cushion. Acuité believes the company will maintain adequate liquidity position over the near to medium term.

Outlook

­Stable

Other Factors affecting Rating

­None.

Key Financials

Particulars	Unit	FY 26 (Provisional)	FY 25 (Actual)
Operating Income	Rs. Cr.	256.62	277.87
PAT	Rs. Cr.	(18.93)	2.92
PAT Margin	(%)	(7.38)	1.05
Total Debt/Tangible Net Worth	Times	0.20	0.14
PBDIT/Interest	Times	(3.43)	2.68

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

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 23 May 2025 Letter of Credit Short Term 34.00 ACUITE A2 (Reaffirmed) Bank Guarantee (BLR) Short Term 24.58 ACUITE A2 (Reaffirmed) Cash Credit Long Term 25.00 ACUITE BBB | Stable (Reaffirmed) Stand By Line of Credit Long Term 3.00 ACUITE BBB | Stable (Reaffirmed) Proposed Long Term Bank Facility Long Term 2.42 ACUITE BBB | Stable (Reaffirmed) 29 Feb 2024 Bank Guarantee (BLR) Short Term 19.58 ACUITE A2 (Reaffirmed) Letter of Credit Short Term 34.00 ACUITE A2 (Reaffirmed) Bank Guarantee (BLR) Short Term 5.00 ACUITE A2 (Assigned) Covid Emergency Line. Long Term 1.48 ACUITE BBB | Stable (Downgraded from ACUITE BBB+ | Stable) Stand By Line of Credit Long Term 3.00 ACUITE BBB | Stable (Downgraded from ACUITE BBB+ | Stable) Proposed Long Term Bank Facility Long Term 0.94 ACUITE BBB | Stable (Downgraded from ACUITE BBB+ | Stable) Cash Credit Long Term 25.00 ACUITE BBB | Stable (Downgraded from ACUITE BBB+ | Stable) 06 Jan 2023 Letter of Credit Short Term 30.00 ACUITE A2 (Reaffirmed) Bank Guarantee (BLR) Short Term 18.60 ACUITE A2 (Reaffirmed) Cash Credit Long Term 25.00 ACUITE BBB+ | Stable (Reaffirmed) Proposed Long Term Bank Facility Long Term 4.40 ACUITE BBB+ | Stable (Reaffirmed) Stand By Line of Credit Long Term 3.00 ACUITE BBB+ | Stable (Reaffirmed) Covid Emergency Line. Long Term 3.00 ACUITE BBB+ | Stable (Reaffirmed)

­

Contacts

Mohit Jain Chief Analytical Officer - Rating Operations Roshni Gupta Associate Analyst - Rating Operations	Contact details exclusively for investors and lenders Mob: +91 8591310146 Email ID: analyticalsupport@acuite.in

List of instruments and names of regulators of the instruments

As required by SEBI Circular (SEBI/HO/DDHS/DDHS-PoD-2/I/4685/2026) dated February 10, 2026, a list of activities or instruments falling under the purview of various Financial Sector Regulators (FSRs), along with the names of respective FSRs, is being disclosed below: A. Rating Activity:   Sr. No. Instrument / activity Name Regulator of the instrument 1 Listed/Proposed to be listed Bonds/Debentures/Preference Shares (all securities) SEBI 2 Unlisted/Proposed to be unlisted Bonds/Debentures/ Preference share (all securities) MCA 3 Listed PTCs / Securitisation Notes (originated by entities regulated by RBI)1 6 RBI 4 Listed PTCs / Securitisation Notes (originated by entities not regulated by RBI)1 SEBI 5 Unlisted PTCs / Securitisation Notes (originated by entities regulated by RBI)1 RBI 6 Listed Commercial Paper and NCDs with original maturity less than 1 year RBI 7 Unlisted Commercial Paper and NCDs with original maturity less than 1 year RBI 8 Loan Facilities (Fund/Non-Fund Based) from Bank / NBFCs/ NHB/ FIs 2 RBI 9 External Commercial Borrowings and other similar borrowings RBI 10 Certificates of Deposit RBI 11 a Fixed Deposits raised by NBFCs, HFCs, FIs RBI 11 b Fixed Deposits raised by Banks 7 + 12 Fixed Deposits raised by corporates other than NBFCs, Banks, HFCs, FIs MCA 13 Inter Corporate Deposits/Loans extended by Corporates MCA 14 Borrowing programme 3 - 15 Issuer Ratings 4 - 16 Credit Ratings for Capital Protection Oriented Schemes (by Mutal Funds and AIFs) SEBI 17 Credit quality ratings (CQRs) for Mutual Fund Schemes and Schemes of AIFs SEBI 18 Listed Security Receipts 6 RBI 19 Unlisted Security Receipts RBI 20 Independent Credit Evaluation (ICE) RBI 21 Expected Loss Ratings (For Loan Facilities [Fund/Non-Fund based] from Banks/NBFCs/NHB/FIs) 7 + 22 Expected Loss Ratings (Listed / Proposed to be listed Bonds / Debentures / Preference Shares (all securities)) SEBI 23 Expected Loss Ratings (Unlisted / Proposed to be unlisted Bonds/ Debentures / Preference Shares (all securities)) MCA 24 Unlisted PTCs / Securitisation Notes (originated by entities not regulated by RBI) 1 Investor-side Regulator such as IRDAI, PFRDA 5   1 Includes securitisation transactions involving assignee payout, acquirer's payout. 2 Includes bank facilities such as liquidity facility, second loss facility that are part of securitisation transactions. 3 The rated instrument may involve issuance of different instruments such as debt securities (listed or otherwise), bank loans, commercial paper (listed or otherwise), etc. The regulator of the instrument may accordingly be SEBI, RBI or MCA and can only be determined upon issuance. In Press Release(s) subsequent to issuance(s), Acuite shall separately capture the rated quantum details along with names of respective regulators. 4 There is no instrument being rated and hence, Regulator of the Instrument is not applicable. The rating scale and definitions are being followed as stipulated in SEBI Master Circular for CRAs. 5 These ratings were assigned during regulatory regime prior to the introduction of SEBI CRA Circular dated Feb 10, 2026 and accordingly, investor side regulators have been included. 6 By virtue of the instrument being listed, SEBI acts as the regulator for listing and related issues. 7 To be finalized following a discussion with the regulatory authorities.   B. Other activities:   Sr. No. Activity Name Regulator of the activity 1 Monitoring Agency SEBI 2 Research activities, incidental to rating, such as research for Economy, Industries and Companies 8 Not applicable 8 permitted by SEBI vide SEBI Master Circular for CRAs. Disclosure on instruments / activities and names of regulators: A list of products/activities or ratings of instruments falling under the purview of various financial sector regulators (FSRs) along with the names of respective FSRs has also been duly disclosed by Acuite on its website. A link to the same has been provided below for ready reference: https://acuite.in/Activities-and-Regulators.html   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.