| Nitin Castings Limited | ||||||
| Ratings reaffirmed at 'Crisil BBB/Stable/Crisil A3+' | ||||||
| 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 reaffirmed its ‘Crisil BBB/Stable/Crisil A3+’ ratings on the bank loan facilities of Nitin Castings Ltd (NCL).
The ratings continue to reflect the established market position of NCL and the extensive experience of its promoters in the alloy steel manufacturing industry, the company’s moderate working capital cycle and comfortable financial position. These strengths are partially offset by its modest scale of operations and susceptibility of its operating margin to volatility in raw material prices. |
Analytical approach Crisil Ratings has evaluated the standalone business and financial risk profiles of NCL. |
Key rating drivers & detailed description Strengths: Established position in the alloy steel manufacturing industry: NCL caters to a large customer base across various end-user industries such as cement, petrochemicals and steel. It also has presence in the international market, which contributes around 10% to revenue. The top five customers contributed less than 20% to the company’s revenue in fiscal 2025, reflecting its diversified customer base. NCL has a large product basket comprising valves, casings, sleeves, rings, rollers and chain links, which helps diversify revenue. The company posted revenue of Rs 150 crore in fiscal 2025.
Extensive experience of the promoters: The five-decade-long experience of the promoters in the alloy steel manufacturing industry, their established relationships with customers will continue to support the business risk profile as reflected in revenues of Rs 150 crore in fiscal 2025.
Moderate working capital cycle: Gross current assets (GCAs) were at 120-130 days in the three years through fiscal 2025, driven by moderate inventory and receivables of 75-85 days and 30-40 days, respectively. The company stocks inventory to meet urgent customer requirement and majority of its manufacturing is backed by orders. The working capital cycle is likely to remain moderate over the medium term, with efficient inventory management and realisation from debtors.
Comfortable financial risk profile: The financial risk profile has improved over the years, led by steady accretion to reserve and plough-back of profit into the business. The networth was comfortable at Rs 83 crore as on March 31, 2025. The capital structure was comfortable as indicated by gearing and total outside liabilities to adjusted networth ratio of 0.09 time and 0.57 time, respectively, as on March 31, 2025 (0.07 time and 0.52 time, respectively, a year before). Debt protection metrics were strong, with interest coverage and net cash accrual to adjusted debt ratio of above 44 times and 1.73 times, respectively, in fiscal 2025. The financial risk profile is expected to remain strong over the medium term in the absence of any major debt-funded capital expenditure (capex).
Weaknesses: Modest scale of operations: Despite being in business for over five decades, NCL operates on a modest scale reflected in revenue of Rs. 150 crores for fiscal 2025, although the scale is on the rise. The alloy steel manufacturing industry is highly fragmented, with several unorganised players catering to regional demand. Intense competition restricts scalability and opportunities to expand into new geographies. Furthermore, revenue performance depends on demand from large steel players, which is inherently cyclical.
Susceptibility to volatility in raw material prices: The operating margin remains susceptible to volatility in the prices of key raw materials, such as stainless-steel scrap, mild steel scrap, nickel, ferroalloys. The company can pass on the rise in input cost to customers, but with a time lag, leading to volatile margins. The operating margin was in the range of 7.5-10.2% for the four fiscals ended March 31, 2025. Sustenance of the operating margin will remain monitorable. |
Liquidity: Adequate Bank limit utilization was low at 13.3% on average for the 12 months through June 2025. Cash accrual is expected at Rs 13-15 crores against term debt obligation of Rs 0.5-1.5 crore over the medium term. The current ratio was healthy at 2.24 times on March 31, 2025. Unencumbered cash and bank balance of around Rs 0.2 crore as on 31st March 2025. |
Outlook: Stable Crisil Ratings believes NCL will maintain its credit profile over the medium term, supported by diverse customer base and strong financial risk profile. |
Rating sensitivity factors Upward factors
Downward factors
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About the company Incorporated in 1982 by the Kedia family, NCL manufactures all grades of heat wear and corrosion-resistant ferrous and alloy metals by centrifugal, sand casting, shell molding and investment casting methods. It has its manufacturing unit in Silvassa, Vapi and head office in Thane, Maharashtra. The company is listed on the Bombay Stock Exchange. Operations are currently managed by Mr Nitin Kedia and Mr Nirmal Kedia. |
Key financial indicators (Crisil Ratings adjusted figures)
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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 - Rating History for last 3 Years | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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* - Issuer did not cooperate; based on best-available information
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| Annexure - Details of Bank Lenders & Facilities | ||||||||||||||||||
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Criteria Details
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