💰 Financial Performance

Revenue Growth by Segment

Total operating income declined by 7.2% YoY to INR 360.0 Cr in FY2025 from INR 388.1 Cr in FY2024. The decline was driven by a correction in steel prices and delays in scaling up the expanded billet capacity. Segment-specific growth was not detailed beyond the overall manufacturing and trading of structural steel and TMT bars.

Geographic Revenue Split

The company has a high geographical concentration with nearly 100% of operations and revenue focused on the Southern Indian market, specifically through its manufacturing unit in Gummidipoondi, Tamil Nadu.

Profitability Margins

Operating margins (OPBDIT/OI) improved slightly to 2.3% in FY2025 from 1.7% in FY2024. Net profit margin (PAT/OI) increased to 2.3% in FY2025 from 0.7% in FY2024, largely aided by the monetisation of vintage wind power assets in Q3 FY2025.

EBITDA Margin

EBITDA margin stood at 2.3% in FY2025, representing an operating profit of INR 8.0 Cr. This was a 35% improvement in margin percentage from the 1.7% recorded in FY2024, though it remained weaker than initial estimates due to higher power costs following the sale of wind assets.

Capital Expenditure

The company invested in expanding its MS ingot (billet) capacity from 27,000 TPA to 100,000 TPA. Additionally, it is setting up a 10.2 MW captive solar power plant, which was delayed from Q4 FY2025 to Q1 FY2026.

Credit Rating & Borrowing

Ratings were downgraded in June 2025 to [ICRA]BB+ (Stable) for long-term and [ICRA]A4+ for short-term from [ICRA]BBB- (Negative) and [ICRA]A3 respectively. Interest coverage ratio improved to 2.1x in FY2025 from 1.6x in FY2024.

⚙️ Operational Drivers

Raw Materials

Steel scrap, coal, and iron ore are the primary raw materials. Raw materials and consumables represent 80-90% of the total operating income.

Import Sources

The company relies on imported scrap to meet its furnace requirements, exposing it to international price volatility and foreign exchange fluctuations.

Key Suppliers

Specific supplier names are not disclosed, but the company operates in the secondary steel sector, sourcing scrap globally and raw materials for MS ingots locally.

Capacity Expansion

Current rolling mill capacity is 100,000 TPA. Billet manufacturing capacity was expanded to 100,000 TPA and is currently in the ramp-up stage with 75% capacity utilization in FY2025. A 10.2 MW solar plant is expected by Q1 FY2026.

Raw Material Costs

Raw material costs account for approximately 80% of revenue. In FY2024, the company faced pressure from elevated inventory levels and volatile scrap prices which constrained margins.

Manufacturing Efficiency

Capacity utilization for the newly expanded billet/rolling mills reached approximately 75% in FY2025. The company is implementing billet hot charging facilities to enhance thermal efficiency.

Logistics & Distribution

High logistics costs are cited as a key industry challenge. The company's focus on the South Indian market helps manage distribution costs for its structural steel products.

📈 Strategic Growth

Expected Growth Rate

7-8%

Growth Strategy

Growth will be driven by the ramp-up of the expanded 100,000 TPA billet capacity, achieving higher capacity utilization (currently 75%), and cost savings from the 10.2 MW solar power project. The company is also leveraging its established brand to capture demand from the 7.5% projected growth in domestic steel demand for FY2025.

Products & Services

Structural steel products (frontline rolled steel), MS ingots, and TMT bars.

Brand Portfolio

KANISHK STEELS

New Products/Services

Focus on frontline rolled steel products for the infrastructure and industrial segments; no specific new product contribution % disclosed.

Market Expansion

The company is strengthening its presence in the infrastructure and industrial segments in South India, supported by healthy domestic infrastructure demand.

Market Share & Ranking

Not disclosed as a specific percentage, but identified as a prominent and reliable steel manufacturer in South India since 1989.

Strategic Alliances

The company is part of the OPG Group, which provides synergies in the steel and power sectors.

🌍 External Factors

Industry Trends

India's crude steel production reached 140.2 million tonnes in FY2024. The industry is shifting toward renewable energy integration and cost-efficient backward integration to counter cyclicality.

Competitive Landscape

Intense competition from both large primary producers and numerous fragmented secondary steel players in the structural steel market.

Competitive Moat

The moat is built on over two decades of promoter experience and an established brand reputation for quality and delivery. However, the moat is challenged by the commoditized nature of the product and high competition.

Macro Economic Sensitivity

Highly sensitive to GDP growth and infrastructure spending, as steel consumption is projected to grow at a 7-8% CAGR over the next 5 years driven by national infrastructure projects.

Consumer Behavior

Shift toward procurement preference for Indian-made steel supported by government policy and quality controls.

Geopolitical Risks

Exposure to global trade uncertainties, including the imposition of tariffs by major economies like the US and the influx of low-priced imports from China and Vietnam.

⚖️ Regulatory & Governance

Industry Regulations

Subject to Ministry of Steel quality controls, pollution norms for induction furnaces, and SEBI (LODR) Regulations for corporate governance.

Environmental Compliance

The company is investing in a 10.2 MW solar plant to increase the share of renewables in its energy mix and reduce its carbon footprint, addressing energy-intensive manufacturing regulations.

Taxation Policy Impact

Not specifically detailed; follows standard Indian corporate tax regulations.

Legal Contingencies

The company received a clean compliance certificate for Corporate Governance from Chaturvedi & Partners for the year ended March 31, 2025. No specific pending court case values were disclosed.

⚠️ Risk Analysis

Key Uncertainties

Volatility in raw material prices (scrap/coal) and steel realization prices could impact margins by more than 1-2% as seen in the FY2024-2025 performance fluctuations.

Geographic Concentration Risk

100% of manufacturing operations are located in Tamil Nadu, making the company highly vulnerable to regional demand-supply imbalances in South India.

Third Party Dependencies

High dependency on external power providers following the sale of wind assets, until the solar plant is commissioned in Q1 FY2026.

Technology Obsolescence Risk

The company is upgrading to billet hot charging and expanded induction furnace capacities to maintain technological relevance and cost efficiency.

Credit & Counterparty Risk

Credit risk is partially mitigated by a client base of reputed firms like BHEL and L&T, though overall liquidity was tight with 84-95% bank limit utilization.