💰 Financial Performance

Revenue Growth by Segment

The company operates in a single reportable segment: manufacturing Stainless and various Steel, Seamless Pipes, Tubes, flanges & fittings. Standalone revenue for FY 2024-25 was INR 233.74 Cr. For the half-year ended September 30, 2025, revenue was INR 100.53 Cr, representing a 9.74% YoY decline from INR 111.39 Cr in the previous year's corresponding period.

Geographic Revenue Split

Exports contributed 75% of total revenue in fiscal 2022, increasing from 68% in fiscal 2021, highlighting a strong reliance on international markets for growth.

Profitability Margins

Operating profit margin declined to 7% in FY 2024-25 from 9% in FY 2023-24. Net profit margin also saw a slight compression from 6% to 5% in the same period due to increased interest expenses and lower income.

EBITDA Margin

Operating margin was 5.01% in fiscal 2022, down from 9.14% in fiscal 2021. This 45% YoY decline was driven by the inability to pass on rising raw material and transportation costs to customers with fixed-price contracts.

Capital Expenditure

The company reported a purchase of tangible and intangible assets amounting to INR 3.74 Cr as per recent cash flow statements to support manufacturing capabilities.

Credit Rating & Borrowing

The company maintains a 'Stable' outlook from CRISIL. Interest coverage ratio deteriorated to 3.58x in FY 2024-25 from 8.14x in FY 2023-24 due to higher finance costs. Borrowing costs are impacted by high working capital intensity.

⚙️ Operational Drivers

Raw Materials

Stainless steel and various steel alloys are the primary raw materials. Cost of materials consumed was INR 63.42 Cr for H1 FY 2025-26, representing 63.08% of total revenue.

Raw Material Costs

Raw material costs represent approximately 63% of revenue. In fiscal 2022, margins were squeezed because the company could not fully pass on a spike in raw material prices to customers due to fixed-order pricing.

Manufacturing Efficiency

Return on Capital Employed (RoCE) was modest at 7.47% in fiscal 2022, constrained by high working capital intensity and moderate operating margins.

Logistics & Distribution

Transportation costs are a significant factor; an increase in these costs contributed to the margin decline from 9.14% to 5.01% in fiscal 2022.

📈 Strategic Growth

Expected Growth Rate

Not disclosed in available documents

Growth Strategy

Growth is pursued through leveraging the promoters' 30+ years of industry experience and established relationships with domestic and international clients. The company focuses on the high-demand export market (75% of revenue) and maintains a healthy capital structure to support moderate expansion.

Products & Services

Stainless steel and various steel seamless pipes, tubes, flanges, and fittings.

Brand Portfolio

Suraj

Market Expansion

The company has successfully expanded its export footprint, which now accounts for 75% of its revenue, targeting global demand for stainless steel seamless products.

Strategic Alliances

The company has an associate entity, Suraj Enterprise Private Limited.

🌍 External Factors

Industry Trends

The stainless-steel industry is growing but faces intense competition and high price sensitivity. There is an increasing shift toward stringent environmental and carbon emission compliance in production processes.

Competitive Landscape

The industry is characterized by intense competition from both domestic and international players, leading to thin margins and high sensitivity to input cost changes.

Competitive Moat

The moat is based on the promoters' extensive 30-year experience and established global client relationships. However, this moat is vulnerable to low product differentiation and the company's status as a price taker.

Macro Economic Sensitivity

Highly sensitive to global steel prices and international trade dynamics, given that 75% of revenue is derived from exports.

Consumer Behavior

Demand is driven by industrial requirements for seamless pipes and tubes in sectors like oil and gas, chemicals, and infrastructure.

Geopolitical Risks

Exposure to trade barriers and changing global standards for steel products could impact export volumes to key international markets.

⚖️ Regulatory & Governance

Industry Regulations

Operations must comply with Indian Accounting Standards (Ind AS), SEBI Listing Obligations, and specific manufacturing standards for steel pipes and fittings.

Environmental Compliance

The company is subject to increasingly stringent domestic and global environmental standards and carbon emission regulations.

Taxation Policy Impact

The effective tax expense for H1 FY 2025-26 was INR 1.27 Cr on a standalone profit before tax of INR 3.37 Cr, representing an effective tax rate of approximately 37.6%.

⚠️ Risk Analysis

Key Uncertainties

Volatility in raw material prices and transportation costs poses a significant risk to profitability, with the potential to reduce operating margins by several hundred basis points.

Geographic Concentration Risk

High geographic concentration risk with 75% of revenue coming from export markets, making the company vulnerable to global economic downturns and trade policy changes.

Technology Obsolescence Risk

The company faces the need to invest in sustainable and modern manufacturing technologies to remain competitive and compliant with global standards.

Credit & Counterparty Risk

Trade receivables stood at INR 25.42 Cr as of September 30, 2025. Moderate credit is extended to customers, and the company maintains an Expected Credit Loss (ECL) provision.