💰 Financial Performance

Revenue Growth by Segment

The group's total revenue grew 5% YoY to Rs 2,365.40 Cr in FY25, up from Rs 2,248.55 Cr in FY24. This growth was primarily driven by the steel trading segment, which maintains a 3-year CAGR of 7%. H1 FY26 revenue reached Rs 1,087 Cr, though it was partially impacted by regional economic slowdowns.

Geographic Revenue Split

Revenue is heavily concentrated in Bihar, India, where the company serves as the sole distributor for Tata Steel in 29 out of 38 districts, including Patna. This regional dominance accounts for nearly 100% of its trading revenue.

Profitability Margins

Operating margins remained stable but modest at 3.4-4.1% between FY23 and FY25. Net Profit After Tax (PAT) margin was 1.60% in FY25 compared to 1.56% in FY24, reflecting the low-margin nature of high-volume steel trading.

EBITDA Margin

Operating margins (proxy for EBITDA) were reported between 3.4% and 4.1% for the three fiscals through 2025. Core profitability is constrained by limited bargaining power with the principal supplier, Tata Steel Ltd.

Capital Expenditure

The group invested in tangible assets including four stockyards with a total storage capacity of 53,000 MT. In FY24, a new stockyard with 20,000 MT capacity was added. IPO proceeds of Rs 30 Cr have been earmarked for general corporate purposes which may include minor maintenance capex.

Credit Rating & Borrowing

CRISIL upgraded the outlook to 'Positive' from 'Stable' while reaffirming the 'CRISIL BBB+' rating in November 2025. Total bank facilities rated are Rs 400 Cr. Borrowing costs are linked to bank rates, with a significant reduction in debt following the Rs 231.66 Cr IPO.

⚙️ Operational Drivers

Raw Materials

The primary 'raw materials' for the trading business are finished long and flat steel products, which constitute over 90% of procurement costs. Other inputs include PVC resin for pipe manufacturing and steel plates for fabrication.

Import Sources

Procurement is entirely domestic, primarily sourced from Tata Steel's manufacturing plants in Jharkhand and Odisha to supply the Bihar market.

Key Suppliers

Tata Steel Ltd (TSL) is the dominant supplier and principal partner. The company also partners with John Deere for tractor trading and Larsen & Toubro Ltd for fleet rentals.

Capacity Expansion

Current storage capacity stands at 53,000 MT across four stockyards. The group has diversified into manufacturing steel girders, PVC pipes, and pre-engineered buildings (PEB) to improve the low operating income to gross block ratio of 19-26 times.

Raw Material Costs

Procurement costs are highly sensitive to Tata Steel's pricing, as the group has limited bargaining power. The spread between purchase and sale prices is narrow, keeping operating margins within the 3-4% range.

Manufacturing Efficiency

The group has a low operating income to gross block ratio of 19-26x compared to peers (75-90x), indicating high investment in fixed assets relative to the income generated from trading.

Logistics & Distribution

Distribution is managed through a network of 1,000+ dealers and institutional buyers across 29 districts in Bihar, providing a deep competitive moat in the regional market.

📈 Strategic Growth

Expected Growth Rate

7%

Growth Strategy

Growth will be achieved through the deployment of Rs 231.66 Cr IPO proceeds, of which Rs 135 Cr was used to reduce working capital debt and Rs 39 Cr for term loans. This deleveraging reduces interest costs and improves the interest coverage ratio (2.2x in FY25) to a projected 3.0x, allowing for higher volume throughput.

Products & Services

Long and flat steel products (Tata Tiscon), John Deere tractors, PVC pipes, pre-engineered buildings (PEB), steel girders, and fleet rental services.

Brand Portfolio

Tata Tiscon (authorized distributor), John Deere (authorized trader), and BMW Ventures (PEB and PVC products).

New Products/Services

Expansion into manufacturing of steel girders and pre-engineered buildings is expected to contribute to higher value-added revenue compared to pure trading.

Market Expansion

The group is deepening its penetration in the 29 districts of Bihar already under its distribution mandate.

Market Share & Ranking

Sole authorized distributor for TSL in 29 districts of Bihar, indicating a dominant regional market share.

Strategic Alliances

30-year sole distribution agreement with Tata Steel Ltd for specific Bihar territories.

🌍 External Factors

Industry Trends

The steel trading industry is moving toward organized distribution and value-added services like PEB. The group is positioning itself by integrating manufacturing (PVC, PEB) with its established trading network.

Competitive Landscape

Faces intense competition from other steel brands and unorganized traders, though its TSL partnership provides a premium product advantage.

Competitive Moat

The moat is based on a 30-year relationship with Tata Steel and a massive 1,000+ dealer network. This is highly sustainable due to the high entry barriers in establishing such a large-scale distribution infrastructure in Bihar.

Macro Economic Sensitivity

Highly sensitive to GDP growth and construction activity in Bihar. A slowdown in economic activities due to state elections in FY26 led to moderated realizations.

Consumer Behavior

Shift toward branded steel (Tata Tiscon) in rural and semi-urban Bihar supports long-term volume growth.

Geopolitical Risks

Minimal direct risk, though global steel price fluctuations impact domestic TSL pricing and group margins.

⚖️ Regulatory & Governance

Industry Regulations

Operations are subject to standard trade licenses and industrial regulations for the PVC and PEB manufacturing units.

Taxation Policy Impact

Standard corporate tax rates apply; the group reported PAT of Rs 37.83 Cr on a pre-tax basis consistent with Indian accounting standards.

⚠️ Risk Analysis

Key Uncertainties

The primary uncertainty is the sustenance of the TSL relationship. A 10% drop in steel prices could wipe out the thin 3.4-4.1% operating margins if inventory management is not precise.

Geographic Concentration Risk

100% of trading revenue is concentrated in the Bihar region, making the company vulnerable to state-specific economic or political disruptions.

Third Party Dependencies

Critical dependency on Tata Steel Ltd for product supply, representing the vast majority of business volume.

Technology Obsolescence Risk

Low risk in steel trading, but manufacturing units for PEB and PVC must stay updated with current fabrication standards.

Credit & Counterparty Risk

Receivables were 38 days in FY25. The group manages this through its extensive dealer network, but a downturn in the construction sector could stretch these cycles.