💰 Financial Performance

Revenue Growth by Segment

Total operating revenue grew by 41.66% YoY to INR 431.45 Cr in FY25. The Round Bar segment grew 19.4% from INR 144 Cr to INR 172 Cr, while the Flats segment contributed an incremental INR 54 Cr due to high domestic demand.

Geographic Revenue Split

The company serves both domestic and overseas markets. While specific percentage splits are not disclosed, the company maintains a diversified reach where no single customer contributes more than 25% of total revenue, mitigating concentration risk.

Profitability Margins

Gross margins are impacted by raw material costs which represent 82.5% of total revenue (INR 357.52 Cr). Net Profit Margin stood at 3.08% in FY25, a slight decrease from 3.76% in FY24 despite higher absolute profits.

EBITDA Margin

EBITDA margin improved to 12.26% in FY25 from 10.67% in FY24, a 159 basis point increase. This was driven by a 62.76% growth in absolute EBITDA to INR 52.88 Cr, resulting from better absorption of semi-fixed employee and administrative costs.

Capital Expenditure

Cash used in investing activities was INR 1.24 Cr in FY25, primarily for fixed asset management. The company evaluates new projects using carbon-adjusted Internal Rate of Return (IRR) to ensure long-term sustainability.

Credit Rating & Borrowing

The company is rated by Infomerics (IVR). Overall gearing stood at 1.01x in FY25 compared to 0.88x in FY24. Interest Service Coverage Ratio (ISCR) improved to 2.01x from 1.78x, reflecting better debt-servicing capacity.

⚙️ Operational Drivers

Raw Materials

Key raw materials include stainless steel scrap and stainless steel flats, which collectively account for approximately 82.5% of the total revenue cost structure.

Import Sources

Raw materials are sourced from multiple suppliers in the open market to ensure no lag time in inventory maintenance; specific countries are not listed, but the company operates in an 'open market scenario'.

Key Suppliers

Not disclosed in available documents; however, the company maintains multiple supplier options to avoid dependency and ensure continuous procurement.

Capacity Expansion

The company operates a manufacturing facility for SS Billets, Ingots, and various rolled products. While specific MTPA capacity is not disclosed, the company is focusing on higher-demand domestic products to drive volume growth.

Raw Material Costs

Cost of materials consumed was INR 357.52 Cr in FY25. The company faces volatility in scrap prices but mitigates this through an open-market procurement strategy and the ability to pass on price hikes to B2B customers.

Manufacturing Efficiency

Inventory turnover ratio improved significantly by 100.88% to 3.23 in FY25 from 1.61 in FY24, indicating much higher efficiency in converting stock into sales.

Logistics & Distribution

Not disclosed as a specific percentage; however, the company offers additional credit periods to customers to drive sales growth, which impacts the trade receivable turnover ratio (4.70 in FY25).

📈 Strategic Growth

Expected Growth Rate

41%

Growth Strategy

Growth is targeted through substantial expansion of the product portfolio, specifically in high-demand domestic segments like round bars and flats. The company leverages its B2B model and long-standing promoter experience (since 1988) to penetrate sectors like Defence and Railways.

Products & Services

Stainless Steel (SS) Ingots, bright and black round bars, Bright Bars, Hexagonal bars, Square bars, Angle Bars, Flat Bars, Fasteners, and Forging products.

Brand Portfolio

Mangalam Alloys Limited (MAL), part of the UCM Group.

New Products/Services

The company recently expanded into the 'Flats' product line, which generated INR 54 Cr in incremental revenue during FY25, contributing approximately 12.5% to total sales.

Market Expansion

The company is focusing on increasing its footprint in the domestic market for higher-demand products while maintaining its existing overseas reach to balance sectoral volatility.

Market Share & Ranking

Not disclosed in available documents; however, it is listed on the SME platform of the stock exchange as of October 2023.

Strategic Alliances

The company is the flagship entity of the UCM Group, providing it with established market linkages and a long track record of operations since 1988.

🌍 External Factors

Industry Trends

The industry is shifting toward sustainability and stricter environmental norms. MAL is positioning itself by integrating carbon-adjusted IRR into capital allocation and focusing on high-growth sectors like Defence and Energy.

Competitive Landscape

The company operates in a competitive B2B market for stainless steel products, competing on the basis of product variety (10+ types) and long-term client relationships.

Competitive Moat

The moat is built on a diversified product portfolio and extensive promoter experience (35+ years). This conglomeration benefit insulates the company from sectoral volatility, making the business model sustainable across cycles.

Macro Economic Sensitivity

Highly sensitive to global steel prices and macroeconomic trends. Changes in government policies or taxation (like MAT) directly impact the net profitability, as seen in the INR 7.69 Cr tax expense in FY25.

Consumer Behavior

B2B demand is shifting toward specialized steel grades for the Pump, Engineering, and Oil & Gas sectors, prompting MAL to focus on specialized bars and fasteners.

Geopolitical Risks

Geopolitical tensions are cited as a risk that could impact raw material costs and global supply chains, though geographical diversification helps mitigate this.

⚖️ Regulatory & Governance

Industry Regulations

Compliant with the Factory Act 1948, Companies Act 2013, and various SEBI regulations. Operations are subject to strict environmental standards and pollution norms.

Environmental Compliance

The company prioritizes environmental sustainability by investing in cleaner technologies and ensuring all new projects undergo comprehensive environmental impact assessments.

Taxation Policy Impact

The company is subject to Minimum Alternate Tax (MAT). In FY25, it recorded a current tax expense of INR 3.88 Cr and a deferred tax expense of INR 2.25 Cr.

Legal Contingencies

The secretarial audit reports general compliance with statutory provisions; no specific high-value pending court cases or litigation values are disclosed in the documents.

⚠️ Risk Analysis

Key Uncertainties

The primary uncertainty is the volatility of raw material prices (SS scrap) and the intensive working capital cycle (144 days), which could impact liquidity if not managed efficiently.

Geographic Concentration Risk

Low; the company has a diversified geographical reach across domestic and overseas markets with no specific region dominating revenue.

Third Party Dependencies

Low; the company maintains multiple supplier options for raw materials, ensuring it is not dependent on a single third-party vendor.

Technology Obsolescence Risk

The company mitigates technology risk by continuously investing in cleaner and more efficient manufacturing technologies to meet evolving environmental standards.

Credit & Counterparty Risk

Receivables management is a focus; the trade receivable turnover ratio improved to 4.70, though the company offers extended credit to drive sales, increasing potential counterparty risk.