| Extensive experience of promoters
PGCPL is promoted by its Managing Director, Mr. Girish Jain who possess experience of more than three decades in the steel industry. Prior to starting PGCPL in 2017, he was engaged in trading of all types of steel (except for scrap) and also operated a rolling mill unit. The day to day operations and management are also taken care of by his sons Mr. Karan Jain and Mr. Kunal Jain. The extensive experience of the promoters has enabled the company to forge healthy relationships with their customers and suppliers.
Healthy financial risk profile
The financial risk profile of PGCPL continues to remain healthy marked by growing networth, low gearing and comfortable debt protection indicators. The networth stood improved at Rs. 112.74 Cr. on March 31, 2025 (Prov.) as against Rs. 103.10 Cr. on March 31, 2024 . The company does not have any long-term external debt and the utilisation of working capital limits continues to remain low, maintaining the gearing below unity at 0.13 times on March 31, 2025 (Prov.) [0.15 times in PY]. The TOL/TNW levels continue to remain low at 0.13 times as on March 31, 2025 (Prov.). The Debt-EBITDA levels, though marginally increased due to decline in the EBITDA levels; continue to remain below unity at 0.91 times [0.56 times in PY] for FY2025.
Acuite expects the financial risk profile to remain healthy in absence of any debt funded capex in the near term and steady accrual generations.
Efficient working capital operations
The working capital operation of the company are efficient with working capital cycle of 54 days in FY2025 (Prov.) (41 days in PY). The debtor days stood low at 6 days in FY2025 (Prov). The company purchases the materials from its suppliers on advance payment basis. However, given the healthy liquidity position, the company does not have to rely on its working capital limits. The average bank limit utilisation stood low at 18.04 percent for the last six months ended April 2025. However, the inventory days increased to 49 days (16 days in PY) due to high raw material stock, owing to production loss. Further, GCA days stood elevated at 97 days in FY2025 (Prov.) from 65 days in FY2024 due to increase in the other current assets on account of loans and advances provided to a director associated company.
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Moderation in operating performance in FY2025
The revenue of PGCPL declined by ~28 percent to Rs. 418.62 Cr. in FY2025 (Prov.) from Rs. 578.76 Cr. in FY2024. The degrowth is mainly owing to decline in the realisation prices and blast in the factory furnace in January 2024 which disrupted the production levels and also led to incurring of additional expenses to replace the furnace. Therefore, the EBITDA margin of the company declined to 2.46 percent in FY2025 (Prov.) from 4.35 percent in FY2024. However, with resumption of normal operations from post December 2024 and improvement in realisation prices in FY2026 post implementation of safeguard duty on steel imports, the company expects an improvement in the revenue as well as operating margins. The company has generated a revenue of Rs. 173.40 Cr. till June 16, 2025.
Inherent cyclical nature of the steel industry
The downstream steel sector is highly fragmented, leaving the company exposed to fierce competition from numerous organized and unorganized players. This competitive intensity, combined with the industry’s intrinsic cyclicality and pronounced volatility in raw-material and finished-goods prices, subjects the company's operating margins to significant swings.
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