Established track record of operations and experienced management
RIL was established in 1993 and subsequently listed on the Bombay Stock Exchange (BSE) in 1994. The company has been under the leadership of the Managing Director Mr. M. P. Rungta, who has been with RIL since its inception and has nearly thirty years of industry experience. The Rungta Group, to which RIL belongs, has a diversified portfolio encompassing various sectors, including iron and steel, financial consulting, and real estate. Notable entities within the group include Ramgarh Sponge Iron Private Limited, Shriram Power and Steel Private Limited, and Gladiolus Finance Consultant Private Limited, among others. The extensive experience of the promoters has contributed significantly to RIL's ability to foster and maintain strong relationships with both customers and suppliers. The company serves a diverse customer base, comprising both government and private entities, which further enhances its market position and stability.
Improved Business Risk Profile
In FY24, RIL reported revenue of Rs. 148.77 Cr. in FY24, reflecting a 14.32% increase over revenue of Rs.130.13 Cr. in FY23, driven primarily by a robust order book generated from tender business with key clients such as IOCL and HPCL. The company's EBITDA margin improved slightly to 4.69% in FY24, up from 4.28% in FY23, while the PAT margin expanded to 3.80% in FY24 from 2.29% in FY23, because of the reduced material costs and increased interest income from a fully repaid unsecured loan provided to a trust. As on 9MFY25, the topline and EBIDTA were at Rs. 154.86 Cr. and 5.59% respectively. As of January 2025, RIL's outstanding order book stands at Rs. 80 Cr., of which by Q4FY25, expected execution would be about Rs. 20 Cr., and the balance by September 2025. Given these positive dynamics, the company is likely to sustain its profitability margins over the medium term.
Improve Financial Risk Profile
RIL demonstrated a healthy financial risk profile, with a net worth of Rs. 86.56 Cr. in FY24 up from Rs. 76.61 Cr. in FY23. This improvement stems from an equity infusion by way of rights issue in FY22 of which Rs. 4.30 Cr. had been added during FY24 and balance though accretion to reserves. The company’s total debt stands at Rs. 10.88 Cr. in FY24, slightly reduced from Rs. 11.09 Cr. in FY23, resulting in a low gearing ratio of 0.13 times in FY24 compared to 0.14 times in FY23. Additionally, RIL's interest coverage ratio improved significantly to 8.85 times in FY24 from 4.05 times in FY23, and its debt service coverage ratio rose to 3.86 times in FY24 from 2.16 times in FY23, attributable to low debt levels and consistent cash accruals. With a TOL/TNW ratio of 0.33 times in FY24 against 0.34 times in FY23, Acuité believes that RIL's financial risk profile will remain healthy in the medium term, supported by steady cash flows and no planned debt-funded capital expenditures in the medium term.

Working Capital Intensive Operations
Despite a slight improvement, RIL has working capital intensive operations as reflected by Gross Current Assets (GCA) of 192 Days in FY24 vis-a-vis 202 days in FY23. The inventory day stood at 39 days in FY24 from 47 days in FY23 largely driven by a strategic shift to a make-to-order model for tender-based projects. However, debtor days increased to 111 days in FY24 from 94 Days in FY23 due to high year-end sales. Although creditor days rose to 16 days in FY24 from 12 days in FY23. Acuité anticipates that RIL’s working capital cycle will continue to remain high on account of the nature of business.
Highly competitive and fragmented nature of industry
The company is operating in a highly competitive and fragmented industry with a large number of organized and unorganized players present in the market, which limits the bargaining power of the company. However, the risk is mitigated to some extent on account of an established track record of operations and experienced management.