Sudhesh Industries Pvt. Ltd.

Brickwork Ratings assigns the long-term ratings of BWR BBB/Stable for the Bank Loan Facilities of Rs. 95.88 Crs. of Sudhesh Industries Pvt. Ltd.

Particulars

Facilities	Amount(Rs.Crs.)	Tenure	Rating	Regulator
Fund Based	95.88	Long Term	BWR BBB /Stable Assignment	RBI
Grand Total	95.88	(Rupees Ninety Five Crores and Eighty Eight lakhs Only)

Note:
1. Please refer to BWR website www.brickworkratings.com for the definition of the ratings
2. Refer to Annexures I, II, and III for details of rated bank loan facilities, debt instruments, and the List of Entities Consolidated RATING ACTION / OUTLOOK

Brickwork Ratings assigns the long-term ratings of BWR BBB/Stable for the Bank Loan Facilities of Rs. 95.88Crs. of Sudhesh Industries Pvt. Ltd.     

The Rating has factored, inter alia, the company’s experienced management with a long track record of operations, moderate financial performance and effective working capital management. The rating is constrained by the intense competition, cyclical steel industry and volatility in raw material prices. Going forward, the company’s ability to scale up operations, enhance profitability and strengthen its liquidity and overall credit profile will remain key rating sensitivities.

The rating outlook has been assigned as "Stable" as BWR believes that Sudhesh Industries Pvt. Ltd. business risk profile will be maintained over the medium term. The 'Stable' outlook indicates a low likelihood of rating change over the medium term. The rating outlook may be revised to 'Positive' in case the revenue and profitability margins show sustained improvement. The rating outlook may be revised to 'Negative' if the financial risk profile goes down.

KEY RATING DRIVERS

Credit Strengths:

• Extensive experience of the promoters :

  The company was incorporated in 2019 and has an operational track record of 7 years. The promoters Mr. Sanjay Kumar Jain and Mr. Rajeev Jain have over 2 decades of experience in the industry. The extensive experience of the promoters combined with a proven operational track record and their understanding of the dynamics of the industry are expected to continue to support the business risk profile.

• Effective Working Capital Management :

  The company maintains a tight and highly efficient cash conversion cycle, closely matching the historical group performance benchmarks. the Conversion Cycle remains stable and comfortable, shifting marginally from 30.00 days to 33.00 days in the highlighted year (FY26). This is driven by Outstanding collection timelines remain extremely sharp at 16.00 days (improving from 18.00 and 17.00 days in preceding periods), demonstrating strong credit control and prompt realizations from customers. Inventory holding periods continue to be well-managed, standing at 22.00 days (compared to 21.00 and 19.00 days previously), avoiding excessive capital blockage in stock continuation of strict industry procurement dynamics, supplier credit remains restricted with days payable tightening down to 5.00 days (from 9.00 and 6.00 days in earlier periods), indicating cash-and-carry or near-advance payment structures.and continuation of strict industry procurement dynamics, supplier credit remains restricted with days payable tightening down to 5.00 days (from 9.00 and 6.00 days in earlier periods), indicating cash-and-carry or near-advance payment structures.

• Moderate financial performance :

  The company exhibits strong independent scaling were the Total Operating Income expanded sequentially by 23.37%, growing from Rs. 545.07 Crs. in FY25 (Audited) to Rs. 672.48 Crs. in FY26 (Provisional). Profitability metrics also recorded sharp increases with OPBDIT growing from Rs. 27.06 Crs. in FY25 to Rs. 46.03 Crs. in FY26, and PAT increasing from Rs. 8.41 Crs. to Rs. 22.56 Crs. over the same period. The Tangible Net Worth (TNW) doubled from Rs. 23.23 Crs. in FY25 to Rs. 48.79 Crs. in FY26. Debt leverage metrics improved dramatically, with Total Debt/TNW dropping from 5.73 times (FY25) to 2.84 times (FY26), and TOL/TNW easing from 4.41 times to 2.52 times. Debt coverage indicators also reached highly comfortable levels, with the Interest Service Coverage Ratio (ISCR) jumping from 2.13 times (FY25) to 3.64 times (FY26), and DSCR strengthening to 2.00 times in FY26.

Credit Risks:

• Volatility in raw material prices :

  The company primarily rely on specific raw materials such as iron and steel wires, steel billets, scrap metal and alloys etc. Raw material cost is a major contributor to total operating cost, thereby making profitability sensitive to raw material prices primarily due to the fact that the major raw material is commodity in nature and witnesses frequent price fluctuations. The prices of these raw materials are highly volatile influenced by global market dynamics and demand fluctuations. Thus, any adverse change in the prices of the raw material may affect the profitability margins of the company.

• Presence in a highly competitive and cyclical steel industry :

  The TMT bars and mild steel ingots/billets industry suffers from several structural weaknesses that limit its long-term profitability. Demand is heavily concentrated in the construction and infrastructure sector, particularly real estate, which makes it highly cyclical and vulnerable to macroeconomic fluctuations. The industry is fragmented, with a large number of small and unorganized players competing intensely, leading to price pressures and limited scale advantages. Low entry barriers and the widespread availability of standardized machinery encourage constant new entrants, further intensifying competition. Additionally, the lack of technological innovation results in minimal product differentiation, preventing manufacturers from commanding premium pricing. With low value addition and a position in the lower segment of the steel value chain, the industry’s profitability remains inherently thin, leaving most players exposed to volatility and margin erosion.

ANALYTICAL APPROACH - Standalone

For arriving at its ratings, BWR has considered the standalone performance of Sudhesh Industries Pvt. Ltd. BWR has applied its rating methodology as detailed in the Rating Criteria (hyperlinks provided at the end of this rationale)

RATING SENSITIVITIES

Positive :

• Improvement in revenue as per company projections with improvement in net margin above 3.50%.
• Sustenance of debt coverage indicators i.e. ISCR and DSCR above 3.50x and 2.00x, Total Debt/TNW below 3.00x.

Negative :

• Debt funded capex leading to deterioration in overall gearing above 3x on a sustained basis.
• Stretch in working capital cycle, leading to an increase in working capital borrowing and weakening of financial risk profile.
• Any decline in revenue below Rs.500.00Crs.

LIQUIDITY INDICATORS - Adequate

Adequate liquidity characterized by sufficient cushion in accruals vis-a-vis repayment obligations and moderate cash balance of Rs. 3.40cr in Prov FY26 compared to Rs.2.00cr in FY25. The company reported net cash accruals of Rs.12.84cr in Prov FY26 compared to Rs. 4.35cr in FY25 against the current debt of zero rupees in FY25 and Prov FY26. The OPBDIT of Rs. 18.56cr in Prov FY26 was sufficient to cover the finance charges of Rs. 2.61cr in Prov FY26. The current ratio of the company stood at 1.54x in Prov FY26 and 1.30x in FY25. ISCR and DSCR of the company stands 7.12x and 4.38x in Prov FY26 compared to 2.28x and 1.77x in FY25. Further, the company's average utilization of cash credit is 88% during the last 12months. Taking all the above points into consideration the company's liquidity position is defined as adequate.

ABOUT THE ENTITY

Incorporated in December 2019, SIPL started operations by acquisition of existing TMT Bar Facility of M/s Sadhbhawana Impex Private Limited under NCLT in FY21.The manufacturing facility of SIPL is in Bahraich (U.P.). The company is running its furnace and rolling plant having installed capacity of 180,000 MT and 168,000 MT for manufacturing M.S. Billets and T.M.T Bars, respectively. SIPL has a franchise agreement with Kamdhenu Limited, where the company sells its products under the Kamdhenu and KAY2 brand.

ESG Profile

The company demonstrates a Adequate ESG profile based on its environmental, social, and governance practices.

Environmental: Environmental risks are driven by high water usage, waste generation and reliance on energy-intensive processes, making disclosures on water consumption, waste-management practices, renewable energy share and emissions levels particularly important. 

Social: Social factors hinge on adherence to labour laws, accident prevention frameworks, and human-capital development, with metrics such as workforce mix (99.17% male, 0.83%female), safety performance and training initiatives offering insights into operational resilience.

Governance: Governance assessment focuses on board independence, committee effectiveness and robustness of compliance systems, supported by readily available disclosures on board structure, audit mechanisms, and risk-management practices.

KEY FINANCIAL INDICATORS (Standalone)

Key Parameters	Units	FY 23 - 24 (Audited - Annual)	FY 24 - 25 (Audited - Annual)	FY 25 - 26 (Provisional - Annual)
Operating Revenue	Rs.Crs.	475.04	545.07	672.48
EBITDA	Rs.Crs.	12.54	27.06	46.03
PAT	Rs.Crs.	1.89	8.41	22.56
Tangible Net Worth	Rs.Crs.	14.82	23.23	48.79
Total Debt / Tangible Net Worth	Times	9.25	5.73	2.84
Current Ratio	Times	1.15	1.21	1.36

KEY COVENANTS OF THE FACILITY RATED

 

The terms of sanction of the rated facilities include financial covenants normally stipulated for such facilities.

STATUS OF NON-COOPERATION WITH PREVIOUS CRA

Not Applicable

RATING HISTORY FOR LAST THREE YEARS (including withdrawal and suspended)

Facilities	Current Rating  (2026)			2025		2024		2023
Type	Tenure	Amount (Rs.Crs.)	Rating	Date	Rating	Date	Rating	Date	Rating
Fund Based	LT	95.88	BWR BBB/Stable (Assignment)	NA	NA	NA	NA	NA	NA
Grand Total		95.88	(Rupees Ninety Five Crores and Eighty Eight lakhs Only)

Hyperlink/Reference to applicable Criteria

• General Criteria
• Approach to Financial Ratios
• Manufacturing Company
• Manufacturing Company

Analytical Contacts
Harish R Ratings Analyst harish.r@brickworkratings.com	Nagaraj K Director - Ratings Board : +91 80 4040 9940 nagaraj.ks@brickworkratings.com
Media Contact | media@brickworkratings.com	Client Support | clientsupport@brickworkratings.com

SL.No.	Name of the Bank/Lender	Type Of Facilities	Long Term(Rs.Crs.)	Short Term(Rs.Crs.)	Total(Rs.Crs.)	Complexity of the Instrument
1	Punjab National Bank	Term Loan - Out-standing	34.59	_	34.59	Simple##
2	Punjab National Bank	Term Loan - Out-standing	21.29	_	21.29	Simple##
3	Punjab National Bank	Cash Credit - Sanctioned	40.00	_	40.00	Simple##
Total			95.88	0.00	95.88
TOTAL (Rupees Ninety Five Crores and Eighty Eight lakhs Only)

## BWR complexity levels are meant for educating investors. The BWR complexity levels are available at www.brickworkratings.com / download / ComplexityLevels.pdf. Investors queries can be sent to info@brickworkratings.com.