Riddhi Steel - Riddhi Steel

📊 BSE: 540082 🏢 Iron & Steel Products 📅 Last Updated: 11/13/2025 15:25

💰 Financial Performance

Revenue Growth by Segment

The company's total turnover grew by 19.4% YoY, reaching INR 391.13 Cr in FY2025 compared to INR 327.57 Cr in FY2024. This growth is primarily driven by its main business segment, the manufacturing of steel pipes.

Geographic Revenue Split

While specific regional percentages are not disclosed, the company has operationally diversified into multiple countries and business segments to reduce dependency on any single market. It is actively scaling operations in other Indian states to grow its client base.

Profitability Margins

Net Profit Margin improved to 1.94% in FY2025 (INR 7.59 Cr) from 1.46% in FY2024 (INR 4.80 Cr). The improvement is attributed to better operational performance and efficient utilization of shareholders' funds.

EBITDA Margin

The company generated net cash accruals of INR 10.60 Cr in FY2025, representing a cash accrual margin of approximately 2.7% on total turnover. Net profit before exceptional items and taxes grew 55.8% YoY to INR 10.20 Cr.

Capital Expenditure

The company continues to explore expansion possibilities and plans to make necessary investments as attractive opportunities arise, though specific planned INR figures for the upcoming cycle are not disclosed.

Credit Rating & Borrowing

Acuite reaffirmed a long-term rating of 'ACUITÉ BBB- | Stable' and a short-term rating of 'ACUITÉ A3+' on bank facilities totaling INR 102.20 Cr as of September 2025.

⚙️ Operational Drivers

Raw Materials

The primary raw materials include steel coils and strips used for manufacturing MS black pipes and galvanized pipes. Raw material price fluctuations are a major constraint on profitability margins.

Import Sources

The company sources materials domestically but is exposed to global price trends; it has taken proactive steps to diversify supplier concentration risks to an extent.

Key Suppliers

Specific supplier names are not disclosed, but the company faces 'supplier concentration risk,' which it is actively working to mitigate to ensure a stable supply of steel inputs.

Capacity Expansion

The company operates a manufacturing unit in Ahmedabad with a current installed capacity of 59,416 tonnes per annum for MS black and galvanized pipes.

Raw Material Costs

Raw material costs are a significant portion of the cost structure; profitability is highly susceptible to price volatility in the intensely competitive iron and steel industry.

Manufacturing Efficiency

The company focuses on technological innovations to bring about operational efficiency on a continuous basis to remain competitive against organized and unorganized players.

Logistics & Distribution

Rise in transportation costs is identified as a specific threat that may adversely affect the company's margins on pipe deliveries.

📈 Strategic Growth

Expected Growth Rate

Growth Strategy

Growth will be achieved by scaling operations in other Indian states and global markets, launching new products/services, and diversifying into different business segments to reduce revenue dependence on any single line.

Products & Services

MS black pipes and galvanized pipes used in solar, power transmission, agriculture, roadways, highways, and greenhouse sectors.

Brand Portfolio

Riddhi Steel and Tube.

New Products/Services

The company has adopted a strategy of launching new products and services to diversify revenue streams, though specific revenue contribution percentages for new launches are not disclosed.

Market Expansion

Targeting expansion in other Indian states and international markets to grow the client base and revenue beyond its current Ahmedabad-centric manufacturing base.

Market Share & Ranking

Not specifically ranked, but operates in a highly fragmented industry with low entry barriers and low bargaining power.

🌍 External Factors

Industry Trends

The industry is shifting toward steel-intensive sectors like renewable energy (solar) and infrastructure. India remains the world's second-largest steel producer with an 8% demand growth forecast for 2025.

Competitive Landscape

Intensely competitive and fragmented industry with low entry barriers, featuring both large organized players and many unorganized downstream participants.

Competitive Moat

The company's moat is based on its long-standing presence since 2001 and the directors' experience of over two decades, which helps maintain strong customer relationships.

Macro Economic Sensitivity

Highly sensitive to Indian GDP growth and infrastructure spending; steel demand is expected to reach 200-210 million tonnes by 2030 driven by housing and transportation.

Consumer Behavior

Demand is being driven by rising consumer durables consumption and government-led infrastructure projects.

Geopolitical Risks

Global geopolitical tensions and the threat of Chinese imports are key risks; a 12% safeguard duty was implemented by the government in April 2025 to provide partial relief.

⚖️ Regulatory & Governance

Industry Regulations

Operations are influenced by government trade policies, such as the 12% safeguard duty on imports and Production-Linked Incentive (PLI) schemes for manufacturing.

Environmental Compliance

The company complies with The Factories Act, 1948 and related rules as applicable to its manufacturing operations.

Taxation Policy Impact

The effective tax rate for FY2025 was approximately 25.6%, with a net profit before tax of INR 10.20 Cr and net profit after tax of INR 7.59 Cr.

Legal Contingencies

The company reports no material litigation in relation to contractual obligations pending against it in any court in India or abroad.

⚠️ Risk Analysis

Key Uncertainties

Key uncertainties include the volatility of raw material prices and the potential for Chinese imports to disrupt domestic price stabilization measures.