| Maithan Alloys Limited | ||||||
| Rating outlook revised to 'Negative'; Ratings Reaffirmed | ||||||
| Rating Action | ||||||
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| Note: None of the Directors on Crisil Ratings Limited’s Board are members of rating committee and thus do not participate in discussion or assignment of any ratings. The Board of Directors also does not discuss any ratings at its meetings. | ||||||
| 1 crore = 10 million | ||||||
| Refer to Annexure for Details of Instruments & Bank Facilities |
Detailed Rationale Crisil Ratings has revised its outlook on the long-term bank facilities of Maithan Alloys Limited (MAL) to ‘Negative’ from ‘Stable’ while reaffirming the rating at ‘Crisil AA’. The short-term rating has been reaffirmed at ‘Crisil A1+’.
The revision in outlook reflects continuation of low operating margins leading to net cash accruals significantly lower than previous expectations. Net cash accruals were over Rs 495 crore in the two fiscals through March 31, 2023 due to increased realizations attributable to favorable market conditions. However, during the last two fiscals through fiscal 2025, operating margins have remained volatile primarily driven by high power costs resulting in reduced productions. Also, the realizations have seen a moderation to over Rs 80,000 per ton during these fiscals against over Rs 1,10,000 per ton in fiscals 2022-23. This has led to net cash accruals of below Rs 175 crore during fiscals 2024-25. With continued headwinds from high power costs and stable raw material prices in the first quarter of fiscal 2026, operating margin was at 10.3%. Recovery in production and improvement in operating margins resulting in higher net cash accruals will remain a key rating sensitivity factor.
The ratings continue to reflect extensive experience of promoters and strong financial risk profile. These strengths are partially offset by exposure to volatility in prices of raw materials and finished goods and cyclicality in the ferro alloys industry. |
Analytical Approach For arriving at its ratings, Crisil Ratings has combined the business and financial risk profiles of MAL and its subsidiaries - Impex Metals and Ferro Alloy Pvt Ltd (IMFAL; Withdrawn), Anjaney Minerals Limited, Salanpur Sinters Private Ltd, Maithan Ferrous Private Limited, Ramagiri Renewable Energy Limited, Dadhichi Rail & Defence Operations Limited, Eloise Builders & Constructions Private Limited, Miathan Fresh Private Limited, Maiuni Ventures LLP, Goldtree Impex Private Limited, collectively known as the Maithan group, as these entities are under common management and have business and financial synergies.
Please refer Annexure - List of Entities Consolidated, which captures the list of entities considered and their analytical treatment of consolidation. |
Key Rating Drivers - Strengths
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Key Rating Drivers - Weaknesses
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Liquidity: Superior |
Outlook: Negative Crisil Ratings believes MAL will continue to benefit from extensive experience of its promoters and healthy financial flexibility, while recovery in profitability remains crucial. |
Rating sensitivity factors Upward factors:
Downward factors:
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About the Group MAL, established in 1985, manufactures ferroalloys such as ferro manganese, ferro silicon and silico manganese, with varying proportions of other chemical compositions. The company is listed on the Bombay Stock Exchange and National Stock Exchange.
IMFAL was acquired in November 2021 through the National Company Law Tribunal for manufacturing manganese-based alloy. It is a wholly owned subsidiary of MAL currently, however, MAL is in the process of merging IMFAL with itself, duly approved by its board on May 28, 2025, to simplify its corporate structure, streamline operations, and achieve cost efficiencies. Other subsidiaries of the Maithan group does not have significant active business operations.
The Maithan group is managed by Mr S. C. Agarwalla and his sons, Mr Subodh Agarwalla and Mr Sudhanshu Agarwalla. |
Key Financial Indicators (Combined)
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Any other information: Not applicable |
Note on complexity levels of the rated instrument: |
Annexure - Details of Instrument(s)
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Annexure – List of entities consolidated
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| Annexure - Rating History for last 3 Years | ||||||||||||||||||||||||||||||||||||||||||||||||||||
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| All amounts are in Rs.Cr. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Annexure - Details of Bank Lenders & Facilities | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Criteria Details
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