Press Release October 12, 2026 SHRI KANHA STAINLESS LIMITED Rating Assigned

Product	Quantum (Rs. Cr) (SEBI)	Quantum (Rs. Cr) (Other FSR)	Long Term Rating	Short Term Rating	Regulated By
Bank Loan Ratings	0.00	46.00	ACUITE BBB | Stable | Assigned	-	RBI
Bank Loan Ratings	0.00	14.00	-	ACUITE A3+ | Assigned	RBI
Total Outstanding	0.00	60.00	-	-	-
Total Withdrawn	0.00	0.00	-	-	-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

­­Acuite has assigned its long-term rating to ‘ACUITE BBB’ (read as ACUITE triple B) and its short term ratings to 'ACUITE A3+' (read as ACUITE A three plus) on Rs. 60.00 Cr. bank facilities of Shri Kanha Stainless Limited (SKSL). The outlook is 'Stable'. Rationale for Rating The assigned rating factors in the extensive experience of the promoters, spanning over several decades in the steel industry, which has enabled the company to establish a stable operational track record. The rating further derives comfort from the company's improving scale of operations accompanied by profitability, moderate financial risk profile following its listing in December 2025, and adequate liquidity position. However, the aforementioned strengths are partially constrained by the company's working capital-intensive nature of operations, as reflected by gross current asset (GCA) days of 215 day in FY 26, and the susceptibility of profitability margins to fluctuations in raw material prices.

About the Company

Shri Kanha Stainless Limited (SKSL), incorporated in July 2015 and headquartered in Jaipur, Rajasthan, is engaged in the manufacturing, processing, and trading of stainless steel products. The company manufactures precision stainless steel cold-rolled strips, coils, sheets, and circles, catering to a diversified customer base across industries such as automotive, textiles, electrical equipment, consumer durables, kitchenware, pipe and tube manufacturing, chemicals, and industrial machinery. SKSL operates a manufacturing facility with an installed capacity of approximately 27,000 MTPA and produces stainless steel products across various series grades, including thin and ultra-thin gauge variants. The company is managed by an experienced board comprising Ms. Kavita Agarwal, Mr. Jai Bhagwan Agarwal, Mr. Shashank Agrawal, Ms. Priyanshi Agrawal, and Mr. Abhishek Sharma.

Unsupported Rating

­Not Applicable

Analytical Approach

­Acuite has considered standalone business and financial risk profile for Shri Kanha Stainless Limited (SKSL) to derive at the rating.

Key Rating Drivers

Strengths

Extensive industry experience of the promoters The company is promoted by a family with extensive experience in the steel industry and has benefitted from their established industry knowledge. The promoters possess significant expertise across procurement, manufacturing operations, and customer relationship management, which has supported the company's growth and operational stability over the years. Acuite believes that the promoters' long-standing presence in the industry, coupled with their understanding of market dynamics and end-user requirements, will continue to support the company's business profile and enable it to maintain healthy relationships with its diversified customer base.   Improving Scale of Operations & Profitability The revenue from operations grew by approximately ~41%, with the topline increasing from Rs. 145.79 crore in FY 25 to Rs. 205.65 crore in FY 26, primarily driven by higher sales volumes and realizations. The company's operating profit (EBITDA) improved to Rs. 17.99 crore in FY 26 from Rs. 13.61 crore in FY 25. The EBITDA margin moderated slightly by 58 bps from 9.33% from FY 25 to 8.75% from FY 26. The decline is mainly due to increased raw material costs, particularly stainless-steel coils and related inputs, coupled with competitive pricing pressure in the stainless-steel industry, which limited the company's ability to fully pass on higher costs to customers. The net profit increased to Rs. 8.74 crore in FY 26 from Rs. 5.79 crore in FY25. Accordingly, the net profit margin improved by 28 bps to 4.25% in FY 26 from 3.97% in FY25. Acuite believes that the company's scale of operations and profitability are likely to witness further improvement over the near to medium term, supported by sustained growth in sales volumes and increasing market penetration. Moderate Financial Risk Profile The financial risk profile of the company is moderate, marked by gearing below unity and healthy debt coverage indicators. The company's tangible net worth improved to Rs. 61.39 crore as on March 31, 2026, from Rs. 12.16 crore as on March 31, 2025, primarily on account of IPO proceeds and accretion of profits into reserves. The gearing ratio improved from 4.19 times in FY 25 to 0.91 times in FY 26. Similarly, TOL/TNW improved from 7.73 times in FY 25 to 1.45 times in FY 26. Debt/EBITDA improved to 3.06 times in FY 26 from 3.59 times for FY 25. ROCE stood at 17.95% in FY 26. The debt coverage indicators remained healthy with ISCR and DSCR standing at 3.81 & 2.62 times for FY 26. Acuite believes that the company's financial risk profile is likely to improve over the medium term, supported by steady cash accruals, strengthening net worth, and the absence of any significant debt funded capital expenditure plans.

Weaknesses

Intensive Working Capital Operations The working capital operations of the company is intensive marked by GCA days of 215 days for FY 26. The intensiveness is mainly due to high inventory holding period of 94 days and debtor realization days of 89 days for FY 26. The higher inventory holding is attributable to the need to maintain adequate stocks of raw materials and finished goods across various product categories to hedge against price fluctuations and ensure supply availability has contributed to the elevated inventory levels. The debtor days have improved from 134 days in FY 25 to 89 days in FY 26 indicating faster realization of bills. Acuite believes that the working capital operations of the company are likely to remain intensive over the medium term owing to the inherent nature of operations. Susceptibility to Raw Material Price Volatility The company's profitability remains susceptible to fluctuations in raw material prices, particularly stainless steel and allied inputs, which constitute a significant portion of its operating costs. Any adverse movement in raw material prices, especially in scenarios where such increases cannot be passed on to customers in a timely manner, may exert pressure on operating margins and impact the overall operating performance of the company. Acuite believes that the company's ability to effectively manage procurement and inventory levels will remain crucial in mitigating the impact of raw material price volatility.

Rating Sensitivities

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

­Sustained improvement in scale of operations, with revenue growth of 30-35% while maintaining healthy profitability margins. Improvement in financial risk profile by strengthening of capital structure and debt coverage indicators on a sustained basis.

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

­Any large debt-funded capital expenditure or incremental borrowings, leading to deterioration in the financial risk profile, with Debt/EBITDA exceeding 4.5 times on a sustained basis. Significant decline in profitability margins, adversely impacting cash accruals and debt servicing ability. Elongation in the working capital cycle

Liquidity Position

Adequate

The liquidity position of the company is adequate marked by generating net cash accrual of Rs. 10.44 crore in FY 26 against debt obligation of Rs. 1.04 crore for the same period. The average fund-based utilization for last six months ended July 2026 is 91.09%. The current ratio stood healthy at 1.80 times for FY 26. The company has maintained cash and bank balances of Rs. 1.49 crore and investments in fixed deposits aggregating Rs. 3.59 crore as on 31st March 2026. However, these funds have been earmarked towards ongoing capital expenditure in accordance with the utilisation schedule outlined in the IPO offer document. Acuite believes that the liquidity position of the company is likely to remain adequate over the medium term, supported by steady cash accruals sufficient to meet its debt repayment obligations and absence of any debt funded capex plans.

Outlook: Stable

­

Other Factors affecting Rating

­None

Key Financials

Particulars	Unit	FY 26 (Actual)	FY 25 (Actual)
Operating Income	Rs. Cr.	205.65	145.79
PAT	Rs. Cr.	8.74	5.79
PAT Margin	(%)	4.25	3.97
Total Debt/Tangible Net Worth	Times	0.91	4.19
PBDIT/Interest	Times	3.81	2.84

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 • 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 :

­Not Applicable

Contacts

Mohit Jain Chief Analytical Officer - Rating Operations Kartik Arora Manager - Rating Operations	Contact details exclusively for investors and lenders Mob: +91 8591310146 Email ID: analyticalsupport@acuite.in

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