💰 Financial Performance

Revenue Growth by Segment

Total revenue moderated by 8% YoY to INR 93 Cr in FY25. Export revenue grew 36.77% YoY to INR 24.03 Cr (25.3% of total), while domestic revenue declined approximately 17.7% YoY to INR 68.97 Cr.

Geographic Revenue Split

Domestic: 74.7% (INR 68.97 Cr); Exports: 25.3% (INR 24.03 Cr).

Profitability Margins

Operating margin declined to 6.24% in FY25 from 14.01% in FY24 due to rising input costs and fixed costs from delayed capex. Net Profit Ratio fell 59.72% to 3.12% in FY25 from 7.75% in FY24.

EBITDA Margin

Operating margin (proxy for EBITDA) was 6.24% in FY25, a sharp decline from 14.01% in FY24, driven by intense competition and furnace breakdown at the Chhatral Unit.

Capital Expenditure

Large capex was incurred in FY25, funded primarily through Initial Public Offering (IPO) proceeds and term loans to expand production capacities.

Credit Rating & Borrowing

CRISIL Ratings assigned a comfortable financial risk profile with gearing of 0.30 times and interest coverage of 2.01 times as of March 31, 2025.

⚙️ Operational Drivers

Raw Materials

Iron scrap, steel scrap, and ferroalloys.

Capacity Expansion

New capacities were commissioned in FY25; stabilization of these operations is a key rating sensitivity factor for future revenue growth.

Raw Material Costs

Cost of production is heavily dependent on iron/steel scrap prices; operating margins fluctuated between 6% and 14% over the last three fiscals due to input price volatility.

Manufacturing Efficiency

Manufacturing efficiency was adversely affected by a furnace breakdown at the Chhatral Unit and delayed stabilization of new capex.

📈 Strategic Growth

Expected Growth Rate

Not disclosed

Growth Strategy

Growth is expected through the addition of new customers, revival of demand leading to increased order flow, and the successful stabilization of newly added production capacities.

Products & Services

Rolls (industrial machinery consumables used in steel plants).

Brand Portfolio

Deem Roll-Tech.

Market Expansion

The company is targeting increased order flow from both domestic and overseas markets, with exports already growing to 25.3% of revenue.

🌍 External Factors

Industry Trends

The industry is evolving with large integrated players increasing capacity, which limits the pricing power of secondary producers like DRTL in a fragmented market.

Competitive Landscape

Intense competition from both fragmented small-scale players and large integrated steel producers.

Competitive Moat

Moat is based on the promoter's 30+ years of experience and established relationships with major public sector steel undertakings; sustainability depends on maintaining cost-efficiency against cheaper imports.

Macro Economic Sensitivity

Highly sensitive to the demand cycles of the steel industry and volatility in global scrap metal prices.

Geopolitical Risks

Overseas market demand and regulatory changes in export destinations are monitorable risks for the 25.3% export segment.

⚖️ Regulatory & Governance

Industry Regulations

Operations are subject to the Companies Act 2013 and SEBI Listing Obligations; overseas demand is susceptible to regulatory changes in international markets.

Legal Contingencies

No significant fraudulent or illegal transactions were reported; no discrepancies of 10% or more were found in physical inventory verification.

⚠️ Risk Analysis

Key Uncertainties

Volatility in raw material prices (iron/steel scrap) and the timely stabilization of new production capacities are the primary business uncertainties.

Geographic Concentration Risk

74.7% of revenue is concentrated in the Indian domestic market, primarily serving large steel plants.

Third Party Dependencies

Dependency on external suppliers for iron scrap and ferroalloys; high bank limit utilization (90%) indicates dependency on credit facilities.

Credit & Counterparty Risk

Trade receivables are elongated at ~130 days, leading to a stretched working capital cycle and a Gross Current Asset (GCA) of 317 days.