RATING RATIONALE
29Apr2026
Vijay Steel Industries
Brickwork Ratings reaffirms the long-term ratings for the Bank Loan Facilities of Rs. 14.00 Crs. of Vijay Steel Industries
Particulars| Facilities** | Amount (Rs.Crs.) | Tenure | Rating# | ||
|---|---|---|---|---|---|
| Previous | Present | Previous (29 Apr 2025) |
Present | ||
| Fund Based | 14.00 | 14.00 | Long Term |
BWR BBB- /Stable
removal from ISSUER NOT COOPERATING* category/Upgraded |
BWR BBB -
/Stable Reaffirmation |
| Grand Total | 14.00 | 14.00 | (Rupees Fourteen Crores Only) | ||
**Details of Bank Loan facilities,consolidation or instruments are provided in Annexure
RATING ACTION / OUTLOOK
Brickwork Ratings has reaffirmed the long-term rating for the bank loan facilities of Vijay Steel Industries at BWR BBB-/Stable for Rs.14.00 crore.
The reaffirmation factors in the company’s experienced promoters, moderate financial risk profile, adequate liquidity position, franchisee association with a reputed brand, and efficient working capital management. However, the rating remains constrained by risks associated with the partnership constitution, intense industry competition, and the cyclical nature of the steel industry.
The Stable outlook reflects BWR’s expectation that the company’s business risk profile will remain steady over the medium term, indicating a low probability of a rating change in the near to medium term.
For arriving at the rating, BWR has considered the company’s last three years audited financial statements up to FY25, provisional financials for FY26, projected financials for FY27 and FY28, along with publicly available information and clarifications provided by the management.
KEY RATING DRIVERSCredit Strengths:
-
Experienced Promoters :
Vijay Steel Industries is currently being managed by its partners having experience of more than a decade in metal industry. BWR believes that the long track record of experience of the partners will be beneficial in maintaining healthy relations with the customers in medium term.
-
Moderate Financial Risk Profile :
The firm has a moderate financial risk profile, reporting revenues of Rs. 591.03 crore in FY26 (Provisional). Its tangible net worth stood at Rs. 50.63 crore in FY26 (Provisional), showing an improvement from Rs. 41.57 crore in FY25 (Audited), primarily due to profit retention. The firm maintains a moderate gearing level, with a Total Debt to Tangible Net Worth (TD/TNW) ratio of 2.57 times in FY26 (Provisional). The firm’s current ratio remains moderate at 1.31 times in FY26 (Provisional).
-
Franchisee of Reputed Brand :
The company sells its product under the brand name of Kamdhenu TMT Saria, and the frim majorily sells their products in Jammu & Kashmir region and Ladakh region.Quality control team from Kamdhenu is present in the manufacturing unit for quality check of TMT bars and selling the finished product.
-
Efficient working capital management :
The firm’s working capital cycle remains healthy, as reflected in a short operating cycle of 11 days in FY26 (Provisional). VSI maintains adequate inventory levels—both in terms of raw materials to support uninterrupted production and finished goods to fulfill immediate customer demand. The firm extends a credit period of approximately 13 days to its customers, resulting in a very low average collection period in FY26 (Provisional). On the procurement side, VSI sources materials from local suppliers and benefits from a credit period of around 13–14 days.
-
Risk Related to Partnership Constitution :
Being a partnership firm, it is exposed to inherent risk of withdrawal of capital by the partner which may impact the overall capital structure and debt metrics of the firm.
-
Intense Competition and Cyclical Nature :
The firm faces intense competition from other big players in TMT bars manufacturing segment. Moreover the prices of raw material keep on fluctuating in the global markets, resulting in low profit margins. The metal industry is sensitive to the shifting business cycles, including changes in the general economy, interest rates and seasonal changes in the demand and supply conditions in the market.
For arriving at its ratings, BWR has considered the standalone performance of VSI. For arriving at its ratings, BWR has applied its rating methodology as detailed in the Rating Criteria detailed below (hyperlinks provided at the end of this rationale).
RATING SENSITIVITIES
Going forward, the firm’s ability to maintain its financial risk profile and adequate liquidity shall remain the key rating monitorables. Positive: Significant growth in revenue along with improvement in operating margins above 2.5%, net profit margins above 1.5%, sustained accretion to tangible net worth, while maintaining gearing below 2.20x and ISCR above 2.00x, could lead to a positive rating action. Negative: Deterioration in the financial risk profile and liquidity position, coupled with a decline in net profit margins below 1.00%, reduction in TNW below Rs. 40 crore, and simultaneous increase in gearing above 2.65x with ISCR below 1.45x, could exert downward pressure on the rating.
The firm has cash & bank balances of Rs. 0.23 Crs in 25(A) & Rs. 0.19 Crs in FY26 Prov. The firm has an average utilisation of 95.12% of their cash credit limit in the seven last months till April 26. The firm's long-term borrowings comprises of unsecured loans from partners of Rs 0.10 crores in FY26 (Prov). The firm has healthy cash accruals of Rs 8.92 crores in FY25 and Rs.11.87 Crs in FY26 (Prov) against the Nil debt repayment. In FY25, ISCR and DSCR remain at robust levels of 1.75x and 2.77x respectively. The Current Ratio remains stable at 1.31x in FY26(Prov), indicating the company’s continued ability to meet short-term obligations comfortably. The firm has a conversion cycle of 11 days in FY26 (Prov).
ABOUT THE ENTITY| Macro Economic Indicator | Sector | Industry | Basic Industry |
|---|---|---|---|
| Industrials | Capital Goods | Industrial Products | Iron & Steel Products |
Vijay Steel Industries (VSI) is a partnership firm incorporated in the year 2006. The firm is engaged in manufacturing of TMT bars and has its two manufacturing unit in Jammu. The firm sells its products under the brand name - ‘Kamdhenu TMT Saria’. The firm is actively managed by its five partners Mr Pankaj Aggarwal, Mr Swatantar Aggarwal, Mr Anuj Aggarwal, Mr Sanjay Aggarwal, Mr Ajay Aggarwal ,, Usha Aggarwal and other technical staff who are experienced and qualified in the same field of operations.The company has installed capacity of 262,800 MT p.a.
ESG ProfileThe company demonstrates an Adequate ESG profile based on its environmental, social, and governance practices.
Environmental: Environmental risks are moderate, given the energy-intensive nature of steel processing and dependence on electricity and fuel for operations. Key focus areas include efficient raw material utilization, waste recycling/scrap management, water conservation measures, and adoption of cleaner production practices. Disclosures on energy consumption, emissions levels, renewable energy usage, and waste-management systems remain relevant.
Social: Social factors are supported by adherence to labour laws, employee welfare measures, workplace safety standards, and skill development initiatives. Maintaining a stable workforce, minimizing accidents, and ensuring timely employee benefits are important for operational continuity. Employee training and health & safety practices enhance productivity and resilience.
Governance: Governance assessment reflects the presence of an experienced promoter group involved in day-to-day operations, supported by established internal controls, statutory compliance, and regular financial reporting. Timely disclosures, prudent risk management, and transparent dealings with lenders and stakeholders remain key governance strengths.
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. | 665.45 | 581.80 | 591.03 |
| EBITDA | Rs.Crs. | 7.93 | 8.79 | 14.20 |
| PAT | Rs.Crs. | 5.85 | 7.18 | 13.59 |
| Tangible Net Worth | Rs.Crs. | 37.42 | 41.57 | 50.63 |
| Total Debt / Tangible Net Worth | Times | 1.35 | 1.83 | 2.57 |
| Current Ratio | Times | 1.32 | 1.29 | 1.31 |
The terms of sanction include standard covenants normally stipulated for such facilities.
STATUS OF NON-COOPERATION WITH PREVIOUS CRA
Not Applicable
ANY OTHER INFORMATIONNA
RATING HISTORY FOR THE PREVIOUS 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 | 14.00 |
BWR BBB-/Stable
(Reaffirmation) |
29Apr2025 |
BWR BBB- Stable
(removal from ISSUER NOT COOPERATING* category/Upgraded) |
04Jun2024 |
BWR BB Stable
(Continues to be in ISSUER NOT COOPERATING* category/Downgraded) |
25May2023 |
BWR BB+ Stable
(Downgrade/ISSUER NOT COOPERATING*) |
| Grand Total | 14.00 | (Rupees Fourteen Crores Only) | |||||||
| Analytical Contacts | |
|---|---|
|
Mukul Singh Sahu Ratings Analyst mukulsingh.s@brickworkratings.com |
Ravi Rashmi Dhar Director - Ratings ravi.d@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 | Jammu and Kashmir Bank | Cash CreditSanctioned | 14.00 | _ | 14.00 | Simple## |
| Total | 14.00 | 0.00 | 14.00 | |||
| TOTAL (Rupees Fourteen 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 |
| Instrument / Activity | Regulator |
|---|---|
| Listed/Proposed to be listed bonds/debentures/preference share (all securities) | SEBI |
| Unlisted/Proposed to be unlisted Bonds/Debentures/ Preference share (all securities) | MCA |
Listed PTCs / Securitisation Notes (originated by entities regulated by RBI) 1| SEBI | |
Listed PTCs / Securitisation Notes (originated by entities not regulated by RBI) 1| SEBI | |
Unlisted PTCs / Securitisation Notes (originated by entities regulated by RBI) 1| RBI | |
| Listed Commercial Paper and NCDs with original maturity less than 1 year | RBI |
| Unlisted Commercial Paper and NCDs with original maturity less than 1 year | RBI |
Loan Facilities (Fund/Non-Fund Based) from Bank/NBFCs/NHB/FIs 2| RBI | |
| External Commercial Borrowings and other similar borrowings | RBI |
| Certificates of Deposit | RBI |
| Fixed Deposits raised by NBFC's, Banks, HFCs, Fis | RBI |
| Fixed Deposits raised by corporates other than NBFCs, Banks, HFCs, Fis | MCA |
| Inter Corporate Deposits/Loans extended by Corporates | MCA |
Borrowing programme 3| - | |
Issuer Ratings 4| - | |
| Credit Ratings for Capital Protection Oriented Schemes (by Mutal Funds and AIFs) | SEBI |
| Credit quality ratings (CQRs) for Mutual Fund Schemes and Schemes of AIFs | SEBI |
| Listed Security Receipts | SEBI |
| Unlisted Security Receipts | RBI |
| Independent Credit Evaluation (ICE) | RBI |
| Expected Loss Ratings (for Loan Facilities (Fund/Non-Fund Based) from Bank/NBFCs/NHB/Fis) | RBI |
| Expected Loss Ratings (Listed/Proposed to be listed bonds/debentures/preference share (all securities)) | SEBI |
| Expected Loss Ratings (Unlisted/Proposed to be unlisted Bonds/Debentures/ Preference share (all securities)) | MCA |
Unlisted PTCs / Securitisation Notes (originated by entities not regulated by RBI) 1| Investor-side Regulator | such as IRDAI, PFRDA 5 |
| Monitoring Agency | SEBI |
| Research activities, incidental to rating, such as research for Economy, Industries and Companies 6 | NA |
- Includes securitisation transactions involving assignee payout, acquirer's payout.
- Includes bank facilities such as liquidity facility, second loss facility that are part of securitisation transactions.
- The rated instrument may involve issuance of different instruments such as debt securities (listed or otherwise), bank loans, commercial paper (listed or otherwise), etc. The regulator of the instrument may accordingly be SEBI, RBI or MCA and can only be determined upon issuance. In PRs subsequent to issuance(s), BWR shall separately capture the rated quantum details along with names of respective regulators.
- There is no instrument being rated and hence, Regulator of the Instrument is not applicable.
- These ratings were assigned during regulatory regime prior to the introduction of SEBI CRA Circular dated Feb 10, 2026, and accordingly, investor side regulators have been included.
- Permitted by SEBI vide SEBI Master Circular for CRAs
For any grievances relating to rating of instruments regulated by other FSR (Financial Sector Regulators), please contact grievance@brickworkratings.com.
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