RATING RATIONALE

20Mar2026

Vananchal Concast Pvt. Ltd.

Brickwork Ratings assigns the long-term ratings at BWR BBB-/Stable and the short-term ratings at BWR A3 for the Bank Loan Facilities of Rs. 66.00 Crs. of Vananchal Concast Pvt. Ltd.

Particulars

Facilities**	Amount(Rs.Crs.)	Tenure	Rating#
Fund Based	50.00	Long Term	BWR BBB - /Stable Assignment
Non Fund Based	16.00	Short Term	BWR A3 Assignment
Grand Total	66.00	(Rupees Sixty Six Crores Only)

#Please refer to BWR website www.brickworkratings.com for definition of the ratings
**Details of Bank Loan facilities,consolidation or instruments are provided in Annexure RATING ACTION / OUTLOOK

Brickwork Ratings assigns the long-term ratings at BWR BBB- /Stable and the short-term ratings at BWR A3 for the bank loan facilities aggregating to Rs.66.00 Crs of Vananchal Concast Pvt. Ltd.

The rating draws strength from the extensive experience of the promoters, significant improvement in the scale of operations and profitability, and an adequate liquidity profile. Financial flexibility is strong, supported by timely funding from the promoters. However, the ratings remain constrained by the susceptibility of profitability to volatile sponge iron, steel scrap, and ferro alloys prices and the entity’s presence in a highly competitive and cyclical nature of steel industry.

The ‘Stable’ outlook indicates a low likelihood of rating change over the medium term. BWR believes Vananchal Concast Pvt. Ltd.’s business and financial risk profile will be maintained over the medium term. The outlook may be revised to Positive if a sustained increase in the scale of operations and higher than envisaged profitability result in an improved financial risk profile and leading to stronger cash accruals and improved leverage. The outlook may be revised to Negative if lower than expected revenue or profitability, deterioration in leverage indicators, or any stress in servicing debt obligations.

For assigning the rating, BWR has relied upon the last 3 years of audited financials till FY25 and projected financials for FY26 & FY27, and publicly available information and clarification provided by management.

KEY RATING DRIVERS

Credit Strengths:

Experienced Management :
The operations of Vananchal Concast Pvt Ltd are managed by the directors Ankit Poddar and Nitin Bhalotia, who collectively possess around 30 years of experience in the steel industry. The promoters are actively involved in the day-to-day operations, procurement of raw materials, production management and marketing of finished products, which supports efficient operations and timely decision-making.

Over the years, the management has developed established relationships with suppliers as well as customers, particularly with steel rolling mills and traders operating in various states such as Rajasthan, Uttar Pradesh, Bihar and Jharkhand. These long-standing relationships support regular orders, repeat business and stable demand for MS billets, thereby providing operational stability to the company.
Significant Growth in Revenue and Profitability :
Vananchal Concast Pvt Ltd has witnessed substantial growth in its scale of operations during FY25, with operating income increasing significantly from Rs.278.14 Cr in FY24 to Rs.597.88 Cr in FY25, reflecting strong growth in sales volume of MS billets and improved demand from steel rolling mills.

The growth in revenue was accompanied by improvement in profitability, with OPBDIT increasing from Rs.9.14 Cr in FY24 to Rs.24.67 Cr in FY25, while PAT increased from Rs.2.01 Cr in FY24 to Rs.10.18 Cr in FY25. The improvement in profitability was mainly driven by higher operating scale, improved cost absorption and better operational efficiency.

Credit Risks:

Competitive and Cyclical Nature of the Steel Industry :
Vananchal Concast Pvt Ltd operates in the secondary steel manufacturing segment, which is characterized by the presence of numerous organized and unorganized players, resulting in intense competition. The company’s operations are also exposed to the inherently cyclical nature of the steel industry, where demand is largely dependent on the performance of the construction, infrastructure and real estate sectors. Consequently, fluctuations in demand and supply conditions may impact selling prices and profitability margins.
Raw Material Price Volatility :
The profitability of the company remains susceptible to fluctuations in prices of key raw materials such as sponge iron, steel scrap and ferro alloys, which constitute a major portion of the operating cost. Sudden increases in raw material prices without a corresponding increase in finished steel prices may impact operating margins.

ANALYTICAL APPROACH - Standalone

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

RATING SENSITIVITIES

Going forward, the ability of the company to improve its scale of operations, profitability margins, overall credit risk profile and efficiently manage its working capital requirement would be the key rating sensitivity.

Positive Triggers:

A significant improvement in the scale of operations, operating margins of over 8% and net margin of over 4% on a sustained basis.
Improvement in liquidity profile, with the current ratio improving above 1.3x

Negative Triggers:

The rating may be downgraded if there is further deterioration in the financial risk profile, a significant decline in revenue below Rs. 450.00 Cr with operating margins dropping below 3.5%
Stretch in the working-capital cycle, resulting in the current ratio falling below 1x. Deterioration in the financial profile of the company, including the liquidity of the company or on account of any unforeseen unfavourable events, and any impact of any debt-funded capex will be a key Monitorable.

LIQUIDITY INDICATORS - Adequate

The company’s liquidity profile remains adequate, supported by moderate internal cash accruals. The net cash accrual for FY25 stood at about Rs.15.45 crore against CPLTD of around Rs.6.05 crore, indicating adequate coverage of scheduled term loan repayments. The company is expected to generate cash accruals of around Rs.24.30 crore in FY26, which is sufficient to cover the projected CPLTD of about Rs.3.50 crore, reflecting satisfactory debt servicing capability. The current ratio remained moderate at 1.09 times in FY25. Further comfort is derived from the Cash and Bank Balance of Rs.8.68, which provides financial flexibility. However, the liquidity profile remains partly constrained by high trade payables. The average working capital utilisation is around 70%.

ABOUT THE ENTITY

Macro Economic Indicator	Sector	Industry	Basic Industry
Commodities	Metals & Mining	Ferrous Metals	Iron & Steel

Vananchal Concast Pvt Ltd was incorporated on 31 December 2019 and is engaged in the manufacturing of Mild Steel (MS) billets, which are primarily used as raw material for production of TMT bars and other steel products used in the construction sector.

The company’s manufacturing facility is located in Ramgarh, Jharkhand, and operates through the induction furnace route with continuous casting machine (CCM) for the production of MS billets. The company mainly supplies its products to steel rolling mills, traders and TMT manufacturers in the regional market.

The operations of the company are managed by the directors Ankit Poddar and Nitin Bhalotia, who together possess around 30 years of cumulative experience in the steel industry, supporting the company’s operational and business growth.

ESG Profile

The company demonstrates an evolving ESG profile based on its environmental, social, and governance practices.

Environmental: Environmental risks are inherent in the steel manufacturing industry due to high water usage, waste generation, and reliance on energy-intensive processes. However, the company has obtained necessary environmental clearances from the relevant authorities and adheres to prescribed environmental norms.

Social: Social factors hinge on adherence to labour laws, accident prevention frameworks, and human-capital development, with metrics such as workforce mix, 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)	FY 24 - 25 (Audited)	FY 25 - 26 (Unaudited - Others(9MFY 26))
Operating Revenue	Rs.Crs.	278.14	597.88	579.54
EBITDA	Rs.Crs.	9.14	24.67	19.31
PAT	Rs.Crs.	2.01	10.18	12.30
Tangible Net Worth	Rs.Crs.	30.96	68.07	Not Available
Total Debt / Tangible Net Worth	Times	3.01	0.93	Not Available
Current Ratio	Times	1.15	1.09	Not Available

KEY COVENANTS OF THE FACILITY RATED

The terms of sanction include standard 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	50.00	BWR BBB-/Stable (Assignment)	NA	NA	NA	NA	NA	NA
Non Fund Based	ST	16.00	BWR A3 (Assignment)	NA	NA	NA	NA	NA	NA
Grand Total		66.00	(Rupees Sixty Six Crores Only)

Hyperlink/Reference to applicable Criteria

Analytical Contacts
Chinmaya R Rating Analyst chinmaya.r@brickworkratings.com	Nitika Srivastava Associate Director Ratings nitika.s@brickworkratings.com
1-860-425-2742 \| media@brickworkratings.com	Customer Support \| CustSupport@brickwrokratings.com

Vananchal Concast Pvt. Ltd.

ANNEXURE-I

Details of Bank Facilities rated by BWR

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	State Bank Of India (SBI)	Cash Credit - Sanctioned	50.00	_	50.00	Simple##
2	State Bank Of India (SBI)	Bank Guarantee - Sanctioned	_	16.00	16.00	Simple##
Total			50.00	16.00	66.00
TOTAL (Rupees Sixty Six Crores 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.

ANNEXURE-II

INSTRUMENT DETAILS

Instrument	Issue Date	Amount (Rs.Crs)	Coupon Rate (%)	Maturity Date	ISIN Particulars	Complexity of the Instrument
Nil	Nil	Nil	Nil	Nil	Nil	Nil

ANNEXURE-III

List of entities consolidated

Name of Entity	% Ownership	Extent of consolidation	Rationale for consolidation
Nil	Nil	Nil	Nil

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