Rating Rationale

BWR assigns the ratings of 'BWR BBB-/Stable' and 'BWR A3' for the bank loan facilities of Rs 74.55 Crs.

The ratings are supported by National Industries’ established presence in the aluminium extrusion industry, integrated manufacturing capabilities, and significant growth in operating income during FY26. The expansion of installed capacity from 13,750 MT to 24,750 MT and the 86 MN extrusion press provide opportunities to manufacture specialised, larger-specification aluminium profiles and support future growth. However, the ratings are constrained by moderate capacity utilisation of 46.70% in FY26 following the expansion, relatively thin operating margins, exposure to aluminium price volatility and intense competition, and working capital requirements.

The rating outlook is assigned as “Stable,” reflecting BWR’s expectation that National Industries business risk profile will remain steady over the medium term. A stable outlook indicates a low probability of a rating change during this period. The outlook may be revised to “Positive” if the company achieves sustained improvement in revenue and profitability margins, while it may be revised to “Negative” in the event of a deterioration in its financial risk profile.

The terms of sanction include standard covenants normally stipulated for such facilities.

• Locational Advantage :

  National Industries is located at Sachin GIDC, Surat, Gujarat, an established industrial cluster with a strong manufacturing ecosystem. The location provides access to established suppliers, skilled manpower, ancillary industries and logistics infrastructure, which supports efficient procurement, manufacturing and movement of finished aluminium products. The established industrial ecosystem also supports operational continuity and access to supporting vendors.

• Management Experience :

  The business is managed by the promoter-family partners with established experience in aluminium extrusion and related manufacturing operations. The promoter-led structure enables hands-on oversight of manufacturing activities, customer relationships and strategic decisions, supporting continuity in operations and business relationships.

• Revenue from Operations :

  The entity demonstrated strong growth in its scale of operations, with Total Operating Income increasing significantly from Rs. 282.99 Cr in FY25 to Rs. 459.62 Cr in FY26. The growth was supported by higher sales volumes as well as improved realisations. Aluminium Section continues to be the principal revenue-generating product, indicating a strong core manufacturing focus. The company has also expanded its installed capacity, providing further headroom for revenue growth, subject to improvement in capacity utilisation.

• Competition in the Industry :

  The aluminium extrusion industry is competitive and fragmented, with the presence of several organised as well as smaller regional manufacturers. The relatively standardised nature of several aluminium profiles and the presence of multiple industry participants can limit pricing flexibility. Consequently, maintaining customer relationships, product quality, timely delivery and cost competitiveness remains important for protecting market position and margins.

• Thin Profit Margins :

  The business operates with relatively thin operating margins, with the FY26 operating margin at 4.42%. Profitability remains sensitive to fluctuations in aluminium and other input costs, power and manufacturing expenses. Given the commodity-linked nature of the business, the ability to pass on increases in raw-material costs to customers in a timely manner is important. Sustained margin improvement would therefore remain dependent on effective cost management, product mix and timely price pass-through.

• Increased Debt Levels :

  Total debt increased during FY26 alongside the significant expansion in the asset base and manufacturing capacity, resulting in higher leverage. Total Debt/TNW stood at 1.28x in FY26. While the expansion is expected to support future growth, timely ramp-up of the expanded capacity and generation of adequate operating cash flows will remain important to support debt servicing and prevent further leverage-related pressure. The ability to maintain the projected improvement in utilisation, profitability and scheduled debt reduction will therefore remain key monitorables.

Positive Factors

• Growth in scale of operations along with sustained operating margins above 5.5%.
•  Improvement in capital structure, with Total Debt/TNW remaining below 1.50x on a sustained basis.
• Efficient working capital management resulting in lower reliance on external borrowings and stronger liquidity.

Negative Factors

• Deterioration in operating profitability, with operating margins remaining below 4.0% on a sustained basis.
• Decline in revenue levels below Rs. 400 crore or weakening of interest coverage metrics, with ISCR falling below 3.0x.
• Any substantial debt-funded expansion or elongation in the working capital cycle adversely affects the financial risk profile.

Adequate liquidity is characterized by a sufficient cushion in accruals vis-à-vis repayment obligations and moderate net cash accruals of Rs. 11.88 crore. The company has adequate liquidity, supported by gross cash accruals of Rs. 11.88 Cr against CPLTD of Rs. 10.24 Cr and a cash & bank balance of Rs. 17.20 Cr as at FY26. The working capital limits were utilised at an average of 36.33% during May 2026 to September 2026, with no instances of overdrawal reported. The current ratio remained moderate at 1.01x.

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

Environmental: The entity follows the applicable regulatory and factory requirements, with appropriate focus on energy efficiency and responsible handling of aluminium scrap and wastage generated during manufacturing.

Social: The entity operates within the prescribed factory safety framework and maintains compliance with applicable workforce and workplace safety requirements, supporting a safe operating environment.

Governance: The entity is promoter-led with established statutory audit and regulatory compliance practices. The family-managed structure supports continuity and hands-on oversight of operations, with management succession being monitored as the business scales.

Business & Background

National Industries is a partnership firm based in Sachin GIDC, Surat, Gujarat, engaged in the manufacturing and sale of aluminium extrusions/profiles. The business originated in 1989 as National Aluminum and was subsequently rebranded as National Industries in 2008. The entity is managed by the Chalodiya family.The entity is managed by members of the Chalodiya family. Jayaben Vipulbhai Chalodiya, Prabhaben Ishwarbhai Chalodiya and Parshittambhai Ravjibhai Chalodiya are partners, with reported experience of 15 years to 25 years.

Business Model & Product Profile

National Industries operates in the aluminium extrusion value chain, with capabilities covering aluminium melting, billet casting and extrusion of aluminium sections. Aluminium sections are the core product, contributing Rs. 395.40 crore in FY26, compared with Rs. 261.03 crore in FY25. The company also derives small revenue from aluminium scrap and wastage.

Manufacturing & Market

National Industries has increased its installed capacity from 13,750 MT in FY25 to 24,750 MT in FY26, with utilised capacity of 11,559 MT in FY26. The company operates multiple extrusion lines, including an 86 MN extrusion press, which enables production of large-width and customised aluminium profiles. Its in-house billet casting facility has a stated annual capacity of 60,000 tonnes, supporting customised alloy requirements and greater control over key raw material inputs.

Customer Profile & Key Strengths

National Industries primarily caters to B2B customers across formwork, scaffolding, construction and industrial applications. Its key customers include AAR Enterprises, BSL Scaffolding, S-Form India, Shriconst Formwork and Cosmos Construction Machinery. The company's key differentiating capability is its ability to manufacture customised and large aluminium profiles, supported by in-house billet casting and a high-capacity extrusion press.

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Not Applicable

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