Press Release June 03, 2025 SAGAR BUSINESS PRIVATE LIMITED Rating Assigned

Product	Quantum (Rs. Cr)	Long Term Rating	Short Term Rating
Bank Loan Ratings	73.05	ACUITE BBB- | Stable | Assigned	-
Bank Loan Ratings	10.32	-	ACUITE A3 | Assigned
Total Outstanding	83.37	-	-
Total Withdrawn	0.00	-	-

Rating Rationale

Acuite has assigned long term rating of 'ACUITE BBB-' (read as ACUITE triple B minus) on the Rs. 73.05 Cr. bank facilities and short-term rating of 'ACUITE A3' (read as ACUITE A three) on the Rs. 10.32 Cr. bank facilities of Sagar Business Private Limited (SBPL). The outlook is 'Stable'. Rationale for rating The rating takes into account long track record of operations, benefits derived from experienced promoters along with dealer distributor network of around 400 dealers, long term association with Tata Steel Limited, improving revenues albeit slight decline in operating profitability, moderate financial risk profile, moderate working capital cycle and adequate liquidity; However, these strengths are partly offset by supplier concentration risk and susceptibility of margins to price fluctuations in steel industry.

About the Company

­Sagar Business Private Limited was incorporated in 1983. The business activities however started in 2009. The company is engaged in the trading of Tata Steel Limited's diverse range of iron and steel products. The Company also undertakes downstream value addition on products and fabrication works (on-site and off-site). The Company has two manufacturing units- at Kharagpur (West Bengal) and at Cuttack (Odisha).The operations are managed by Mr. Sunil Kishorepuria, Mr Sriyash Kishorepuria and Mrs Radha Kishorepuria.

Unsupported Rating

­Not Applicable

Analytical Approach

Acuité has considered the standalone business and financial risk profile of Sagar Business Private Limited (SBPL) to arrive at the rating.

Key Rating Drivers

Strengths

Benefits derived from experienced management The operations of the company are managed by Mr. Sunil Kishorepuria, Ms. Radha Kishorepuria, and Mr. Sriyash Kishorepuria who have prior experience in trading of iron and steel for almost two decades. The company also holds strong relationship with Tata Steel Limited as distributor of their products It also has dealer network of 400 dealers which helps the company cater to the clientele base. The Company also undertakes downstream value addition on products and fabrication works (on-site and off-site). This has aided the Company to improve their scale of operations over the year while providing a steady customer base and improved margins. The three segments of revenue generation are Iron and Steel trading (71.40%), Fabrication and erection services (18.86%) and downstream products (8.62%) as on FY 2025(Prov.)Acuite believes that the experience of the promoters coupled with their relationship with Tata Steel Limited will benefit the company going forward. ­Increasing Revenues albeit slight decline in operating margins The revenues have increased to Rs. 649.53 Cr. as on March 31, 2025(Prov.) as compared to Rs. 402.69 Cr. as on March 31, 2024 on account of increase in volume sold and addition of products for Tiscon( for retail segment) in FY 2025. The operating profitability has slightly declined to 4.18 percent as on March 31, 2025(Prov.) as compared to 4.23 percent as on March 31, 2024 on account of higher trade discounts given for augmenting retail sales.  The company is undergoing capex towards increasing the capacity for fabrication and erection services in the Cuttack unit. It is to be operationalized from September 2025. Acuite believes that scale of operations will improve over the medium term. Moderate Financial Risk Profile The financial risk profile of the company is moderate marked by improving net worth, moderate gearing and debt protection metrics. The adjusted tangible net worth of the company stood at Rs. 77.96 Cr. as on March 31, 2025(Prov.) as compared to Rs. 28.14 Cr. as on March 31, 2024 due to accretion to reserves and quasi equity. Acuite has considered unsecured loans of Rs. 42.46 Cr. as quasi equity as on March 31, 2025(Prov.), and as some part of the same has been subordinated to bank loans and based on an undertaking received by management to retain the balance in the business over the long term. Adjusted gearing of the company stood at 1.72 times as on March 31, 2025(Prov.) as compared to 3.83 times as on March 31, 2024. The Total Outside Liabilities/Tangible Net Worth (TOL/TNW) stood at 2.02 times as on March 31, 2025(Prov.) as compared to 4.00 times as on March 31, 2024. The debt protection metrices of the company remain moderate marked by Interest coverage ratio (ICR) of 1.95 times and debt service coverage ratio (DSCR) of 1.01 times for March 31, 2025(Prov.). The net cash accruals to total debt (NCA/TD) stood at 0.09 times as on March 31, 2025(Prov.) as compared to 0.06 times as on March 31, 2024. Acuité believes that the financial risk profile will remain moderate over the medium term, with steady cash accruals. Moderate Working Capital Cycle The working capital cycle of the company is moderate as reflected by Gross Current Assets (GCA) of 101 days for March 31, 2025(Prov.) as compared to 91 days for March 31, 2024. The inventory stood at 60 days as on March 31, 2025(Prov.) as compared to 44 days as on March 31, 2024. The debtor period stood at 30 days as on March 31, 2025(Prov.) as compared to 34 days as on March 31, 2024. The creditors stood at 8 days as on March 31, 2025(Prov.) as compared to 2 days as on March 31, 2024. Acuité believes that the working capital operations of the company will remain at the similar levels over the medium term.

Weaknesses

­­­Supplier Concentration risk The company is exposed to supplier concentration risk since Tata Steel Limited is the sole supplier of products to the company. Any breach in MoU terms might impact the company, since it has limited bargaining power. Any change in the availability of products or pricing might directly impact SBPL's earning profile. However, the company has not witnessed any such un-toward risk in the past years track record with them. Acuite believes the company will be exposed to the supplier concentration risk over the medium term. ­­Margins are susceptible to price fluctuations The company's performance remains vulnerable to cyclicality in the steel sector as demand for steel depends on performance of end user segments such as construction and real estate. Indian steel sector is highly competitive due to presence of large number of players. Acuite believes that the operating margin of the company will continue to remain exposed to fluctuations in the prices of raw materials as well as price realization from finished goods.

Rating Sensitivities

­Movement in revenues and operating profitability Working Capital cycle

Liquidity Position

Adequate

­The company has adequate liquidity marked by net cash accruals of Rs 12.00 Cr. as on FY2025 (Prov.) as against long term debt of Rs. 6.01 Cr. over the same period. The cash and bank balance stood at Rs. 0.63 Cr. as on March 31, 2025(Prov.) and Rs. 0.42 Cr. as on March 31, 2024. Further, the current ratio of the company stood at 1.42 times as on March 31, 2025(Prov.) as compared to 1.12 times as on March 31, 2024. The average bank limit utilization of the company has been 92 percent utilized for the last six months ended in April 2025. Acuité believes that the liquidity of the company is likely to remain adequate over the near to medium term on account of steady cash accruals.

Outlook: Stable

­

Other Factors affecting Rating

­None

Key Financials

Particulars	Unit	FY 25 (Provisional)	FY 24 (Actual)
Operating Income	Rs. Cr.	649.53	402.69
PAT	Rs. Cr.	7.30	2.93
PAT Margin	(%)	1.12	0.73
Total Debt/Tangible Net Worth	Times	1.72	3.83
PBDIT/Interest	Times	1.95	1.65

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

­None

Interaction with Audit Committee anytime in the last 12 months (applicable for rated-listed / proposed to be listed debt securities being reviewed by Acuite)

Not applicable

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

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Annexure - Details of instruments rated

Lender’s Name ISIN Facilities Date Of Issuance Coupon Rate Maturity Date Quantum (Rs. Cr.) Complexity Level Rating Bandhan Bank Not avl. / Not appl. Bank Guarantee (BLR) Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 7.00 Simple ACUITE A3 | Assigned Kotak Mahindra Bank Not avl. / Not appl. Bank Guarantee (BLR) Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 0.50 Simple ACUITE A3 | Assigned Bandhan Bank Not avl. / Not appl. Cash Credit Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 29.00 Simple ACUITE BBB- | Stable | Assigned Kotak Mahindra Bank 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 Bank Guarantee Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 2.82 Simple ACUITE A3 | Assigned Bandhan Bank Not avl. / Not appl. Term Loan Not avl. / Not appl. Not avl. / Not appl. 01 Apr 2030 5.96 Simple ACUITE BBB- | Stable | Assigned Bandhan Bank Not avl. / Not appl. Term Loan Not avl. / Not appl. Not avl. / Not appl. 01 Feb 2027 0.75 Simple ACUITE BBB- | Stable | Assigned Bandhan Bank Not avl. / Not appl. Term Loan Not avl. / Not appl. Not avl. / Not appl. 01 May 2026 1.08 Simple ACUITE BBB- | Stable | Assigned Bandhan Bank Not avl. / Not appl. Term Loan Not avl. / Not appl. Not avl. / Not appl. 01 Mar 2028 1.26 Simple ACUITE BBB- | Stable | Assigned Kotak Mahindra Bank Not avl. / Not appl. Term Loan Not avl. / Not appl. Not avl. / Not appl. 20 Jul 2030 10.00 Simple ACUITE BBB- | Stable | Assigned

Contacts

Mohit Jain Senior Vice President - Rating Operations Vedika Lahoti 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.