RATING RATIONALE
07Apr2026
Bhawani Industries Pvt. Ltd.
Brickwork Ratings assigns the long term rating of BWR BBB+/Stable and short-term rating of BWR A2 for the Bank Loan Facilities of Rs. 195.00 Crs. of Bhawani Industries Pvt. Ltd.
Particulars| Facilities** | Amount(Rs.Crs.) | Tenure | Rating# | |
|---|---|---|---|---|
| Fund Based | 195.00 | Long Term |
BWR BBB +
/Stable Assignment |
|
| (30.00) | ||||
| (30.00) | ||||
| (6.00) | ||||
| (30.00) | Short Term |
BWR A2
Assignment |
||
| (40.00) | ||||
| Non Fund Based | (5.00) | Long Term |
BWR BBB +
/Stable Assignment |
|
| (30.00) | ||||
| (30.00) | ||||
| (10.00) | Short Term |
BWR A2
Assignment |
||
| (10.00) | ||||
| (2.00) | ||||
| Grand Total | 195.00 | (Rupees One Hundred Ninety Five Crores Only) | ||
**Details of Bank Loan facilities,consolidation or instruments are provided in Annexure RATING ACTION / OUTLOOK
Brickwork Ratings (BWR) assigns the long term rating of BWR BBB+/Stable and short-term rating of BWR A2 for the bank loan facilities of Rs. 195.00 Crore of Bhawani Industries Pvt. Ltd.
The ratings draw strength from the entity's long operational history of over 25 years in the iron and steel manufacturing segment, supported by experienced promoters Mr. Sanjiv Sood and Mr. Anoop Kumar Sood who bring over three decades of industry experience.
The ratings also factor in the entity's strategic location advantage in Mandi Gobindgarh being large steel manufacturing clusters, providing ready access to raw material and labors. The entity has a diverse product portfolio consisting of billets, castings, flats, rounds, bars and steel ingots. The firm also holds industry certifications like ISO 9001:2015 and ISO 14001:2015, Certificate of Consent from the Punjab Pollution Control Board.
The ratings consider the entity's steady growth in its operating income from Rs. 654.14 Crs in FY24 to Rs. 703.21 Crs in FY25, with improving operating margins from 3.90% to 5.47%. The entity has a tangible net worth of Rs. 134.92 Crs. The ratings further consider the comfortable debt coverage metrics with ISCR at 2.36 times and DSCR at 2.24 times in FY25 along with satisfactory banker feedback received from Punjab National Bank, Axis Bank, Standard Chartered Bank, Kotak Mahindra Bank and Union Bank of India.
However, the ratings are constrained by the entity's exposure to raw material price volatility and the cyclical nature of the steel industry along with intense competition.
The Stable outlook indicates the entity's moderate risk profile and is expected to be maintained over the medium term, backed by steady revenue and a healthy receivable position. The entity will continue to maintain its capital structure and healthy debt coverage indicators. BWR expects the firm to enhance its scale of operations, improve profitability margins, strengthen its working capital cycle and maintain robust cash management, all of which could lead to a positive outlook. However, significant underperformance in revenue, deteriorating profitability, or liquidity challenges could result in a revision to a negative outlook.
KEY RATING DRIVERSCredit Strengths:
-
Location Advantage :
Bhawani Industries is located and operated in Mandi Gobindgarh, being one of India's steel manufacturing clusters. The locations serves as a dense concentration of steel rolling mills, induction furnaces, foundries and allied units, with providing the entity with access to raw material suppliers and connectivity to buyers aiding firms logistics by reducing lead times and costs. The cluster also offers a pool of skilled labour familiar with steel manufacturing processes.
-
Long Track Record of Operations and Experienced Management :
The current promoters, Mr. Sanjiv Sood and Mr. Anoop Kumar Sood, acquired Bhawani Industries in October 2019. Both promoters bring over three decades of experience in the iron and steel industry, having operated through multiple commodity and business cycles. The promoters are supported by the Royal group of companies (Royal Alloys, Royal Industries, Royal Ispat Udyog, Royal Steel Rolling Mills, Royal Steels), which has been engaged in the manufacture of iron and steel products since 1973.
-
Moderate Financial Risk Profile :
The risk profile of the firm remains moderate supported by its long standing market presence, customer relationships and comfortable projected financial metrics. The entity’s revenue has grown from Rs. 655.99 Crs in FY23 to Rs. 701.98 Crs in FY25 over the three years. While leverage has increased from 0.61 times in FY23 to 1.33 times in FY25 due to higher short-term borrowings, it remains within a manageable entity's Tangible net worth base which has grown steadily from Rs. 110.57 Crs. in FY23 to Rs. 134.92 Crs. FY25 through profit retention, with no dividend payouts or equity dilution. The coverage ratios remain in the comfortable range of 2.36 times & 2.24 times in FY25.
-
Competition from Large Domestic and International Players :
Bhawani Industries operates in the secondary steel segment, which is fragmented and competitive. The company faces competition from large integrated producers (Tata Steel, JSW Steel, SAIL, etc.) who benefit from captive raw material sources and greater scale, giving them stronger pricing power with institutional buyers. Steel imports from countries with lower production costs or government subsidies can depress domestic prices. Operating in a commodity linked business and intense competition keeps selling prices low and squeezes profit margins when supply exceeds demand.
-
Raw Material Price Volatility and Cyclicality of the Steel Industry :
The company’s main raw material is steel scrap, which is the largest part of its operating cost. Scrap prices are volatile and follow global steel prices, domestic demand and import price shifts. The company has no long-term fixed-price supply contracts and selling prices for finished goods depend on the market. A sharp fall in steel prices can lead to inventory write-downs. The industry is cyclical with demand linked to construction, infrastructure spending and automotive production. Any unexpected downturn in anchored sectors can reduce volumes and realizations simultaneously, pressuring both revenue and profitability.
For arriving at its ratings, BWR has considered a standalone financials of the company and applied its rating methodology as detailed in the Rating Criteria.
RATING SENSITIVITIES
Upward Factors:
- Sustained increase in operating income to Rs.1000 Crs along with increase in operating margins to 10% and net margins to 5%.
- Improvement in liquidity profile by maintaining current ratio at existing level of 1.5 times or higher.
- Debt protection metrics of ISCR and DSCR to be maintained at present level or higher.
Downward Factors:
- Decline in scale of operating & profitability, leading to lower cash accruals below existing levels.
- Deterioration in debt protection metrics with ISCR & DSCR below 2 times.
- Further, stretch in the liquidity profile and decrease in current ratio below 1.05 times.
Adequate liquidity is characterized by sufficient cushion in accruals vis-a-vis repayment obligations and moderate cash balance of Rs. 0.79 Crs in FY25. The bank funded working capital limits have been utilized to an average extent of 68% for the past 6 months. The current ratio of 1.25 times in FY25 indicates comfortable liquidity. During FY25 the company has generated net cash accruals of Rs.23.02 Crs which adequately covers the CPLTD of Rs.1.48 Crs. The company’s projected cash accruals of Rs.17.16 Crs in FY26 is sufficient to cover upcoming CPLTD of Rs 0.78 Crs in FY27, thus indicating adequate liquidity.
ABOUT THE ENTITY| Macro Economic Indicator | Sector | Industry | Basic Industry |
|---|---|---|---|
| Industrials | Capital Goods | Industrial Products | Iron & Steel Products |
Bhawani Industries Pvt. Ltd., established in 1999, is headquartered in Mandi Gobindgarh, Punjab and operates one of India’s largest integrated steel foundries across 55 acres. The company is promoted by experienced industrialists and led by a professional management team with Anoop Kumar Sood & Sanjiv Sood. Bhawani Industries specializes in manufacturing steel billets, blooms, carbon and alloy steels, flats, rounds, bars and heavy engineering castings. Its operations are supported by advanced facilities including machine shops, heat treatment units and in-house testing labs, with a strong emphasis on quality.
ESG ProfileAs per the information disclosed by the entity, the company demonstrates an 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 of 80 KLD per day, waste-management practices, the firm has a renewable energy contributions of 1,565 kWh/ day with power sold to Rajasthan Electricity board, the emissions are at the levels of 62mg/NM³.
Social: Social factors hinge on adherence to labour laws, accident prevention frameworks and human-capital development, with metrics such as workforce mix of 324 males and 14 females, along with 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 22 - 23 (Audited - Annual) |
FY 23 - 24 (Audited - Annual) |
FY 24 - 25 (Audited - Annual) |
|---|---|---|---|---|
| Operating Revenue | Rs.Crs. | 656.50 | 654.14 | 703.21 |
| EBITDA | Rs.Crs. | 17.04 | 25.48 | 38.48 |
| PAT | Rs.Crs. | 7.17 | 7.32 | 17.01 |
| Tangible Net Worth | Rs.Crs. | 110.57 | 117.89 | 134.92 |
| Total Debt / Tangible Net Worth | Times | 0.61 | 1.00 | 1.33 |
| Current Ratio | Times | 1.15 | 1.36 | 1.25 |
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 | 195.00 |
BWR BBB+/Stable
(Assignment) |
NA |
NA
|
NA |
NA
|
NA |
NA
|
| FB SubLimit | LT | (30.00) |
BWR BBB+/Stable
(Assignment) |
NA |
NA
|
NA |
NA
|
NA |
NA
|
| (30.00) |
BWR BBB+/Stable
(Assignment) |
NA |
NA
|
NA |
NA
|
NA |
NA
|
||
| (6.00) |
BWR BBB+/Stable
(Assignment) |
NA |
NA
|
NA |
NA
|
NA |
NA
|
||
| FB SubLimit | ST | (30.00) |
BWR A2
(Assignment) |
NA |
NA
|
NA |
NA
|
NA |
NA
|
| (40.00) |
BWR A2
(Assignment) |
NA |
NA
|
NA |
NA
|
NA |
NA
|
||
| NFB SubLimit | LT | (5.00) |
BWR BBB+/Stable
(Assignment) |
NA |
NA
|
NA |
NA
|
NA |
NA
|
| (30.00) |
BWR BBB+/Stable
(Assignment) |
NA |
NA
|
NA |
NA
|
NA |
NA
|
||
| (30.00) |
BWR BBB+/Stable
(Assignment) |
NA |
NA
|
NA |
NA
|
NA |
NA
|
||
| NFB SubLimit | ST | (10.00) |
BWR A2
(Assignment) |
NA |
NA
|
NA |
NA
|
NA |
NA
|
| (10.00) |
BWR A2
(Assignment) |
NA |
NA
|
NA |
NA
|
NA |
NA
|
||
| (2.00) |
BWR A2
(Assignment) |
NA |
NA
|
NA |
NA
|
NA |
NA
|
||
| Grand Total | 195.00 | (Rupees One Hundred Ninety Five Crores Only) | |||||||
| Analytical Contacts | |
|---|---|
|
Santosh S K Ratings Analyst santosh.sk@brickworkratings.com |
Suryanarayan N Associate Director - Ratings suryanarayan.n@brickworkratings.com |
| 1-860-425-2742 | media@brickworkratings.com | Customer Support | CustSupport@brickwrokratings.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 | Axis Bank Ltd. | Cash CreditSanctioned | 42.00 | _ | 42.00 | Simple## |
| Sub-Limit (Bank guarantee ) Sanctioned | (5.00) | |||||
| Sub-Limit (Foreign currency demand loan (FCDL) ) Sanctioned | (40.00) | |||||
| Sub-Limit (Letter of credit (Inland/Import) ) Sanctioned | (10.00) | |||||
| Sub-Limit (SBLC for buyer's credit) Sanctioned | (10.00) | |||||
| Sub-Limit (Working capital demand loan (WCDL) ) Sanctioned | (30.00) | |||||
| 2 | Kotak Mahindra Bank | Dropline ODSanctioned | 15.00 | _ | 15.00 | Simple## |
| 3 | Kotak Mahindra Bank | Working Capital Demand LoanSanctioned | 10.00 | _ | 10.00 | Simple## |
| Sub-Limit (Cash Credit) Sanctioned | (6.00) | |||||
| 4 | Punjab National Bank | Working Capital Demand LoanSanctioned | 30.60 | _ | 30.60 | Simple## |
| 5 | Punjab National Bank | Cash CreditSanctioned | 20.40 | _ | 20.40 | Simple## |
| 6 | Standard Chartered Bank | Over DraftSanctioned | 30.00 | _ | 30.00 | Simple## |
| Sub-Limit (Buyers Credit) Sanctioned | (30.00) | |||||
| Sub-Limit (Letter of Credit ) Sanctioned | (30.00) | |||||
| Sub-Limit (Stadby Letter of Credit) Sanctioned | (30.00) | |||||
| Sub-Limit (Working capital demand loan (WCDL) ) Sanctioned | (30.00) | |||||
| 7 | Union Bank of India | Cash CreditSanctioned | 47.00 | _ | 47.00 | Simple## |
| Sub-Limit (Bank guarantee (BG)) Sanctioned | (2.00) | |||||
| Total | 195.00 | 0.00 | 195.00 | |||
| TOTAL (Rupees One Hundred Ninety Five 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.
| Instrument | Issue Date | Amount (Rs.Crs) | Coupon Rate (%) | Maturity Date | ISIN Particulars | Complexity of the Instrument |
|---|---|---|---|---|---|---|
| Nil | Nil | Nil | Nil | Nil | Nil | Nil |
| Name of Entity | % Ownership | Extent of consolidation | Rationale for consolidation |
|---|---|---|---|
| Nil | Nil | Nil | Nil |
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