AARTI STEELS LIMITED

Address: Miller Ganjg T Road Ludhiana, Punjab

Website: http://www.aartisteelsltd.com/ Email: info@aartisteelsltd.com Telephone: 91161006100
CIN: U17115PB1979PLC003991 Customer Type: New Customer

Key Statistics External Rating

Industry: Iron and Steel Whether Credit Rating required? Yes (As Loan does exists)
Segment: Iron and Steel products Credit Rating Agency: ICRA
Date of Incorporation: 06/06/1979 Long-Term Rating: A
Auditors: N K Bector & Co. Short-Term Rating: A2+

Ratio Analysis 31/03/2022 31/03/2023 31/03/2024

Income Statement: (Rs Cr) 31/03/2022 31/03/2023 31/03/2024 Revenue Growth (%) 0.00% 15.67% -8.86%
Revenue From Operations: 1,453.74 1,681.58 1,532.53 EBDITA Growth (%) 0.00% -36.70% -8.76%
Other Income: 0.59 1.13 2.19 EBDITA Margin (%) 12.46% 6.82% 6.83%
EBDITA: 181.15 114.67 104.63 PAT Growth (%) 0.00% -69.85% -20.97%
Depreciation & Amortization: 49.09 51.55 52.58 PAT Margin (%) 5.72% 1.49% 1.29%
EBIT: 132.06 63.12 52.05 PBT Growth (%) 0.00% -67.67% -34.47%
Finance Cost: 19.73 26.80 28.25 PBT Margin (%) 7.73% 2.16% 1.55%
PBT: 112.33 36.32 23.80 Cash Profit/Turnover 9.10% 4.56% 4.72%
Current Tax: 29.15 11.24 3.98 Current Ratio 2.08 1.86 1.90
Deferred Tax: - - - Leverage (TOL/TNW) 0.84 0.95 0.79
PAT: 83.18 25.08 19.82 Return on Equity (excl. Pref. Share) 11.68% 3.45% 2.64%
Return on Capital Employed 21.79% 4.99% 4.08%
Balance Sheet: (Rs Cr) 31/03/2022 31/03/2023 31/03/2024 Debt/Equity 0.49 0.54 0.39
Sources of Funds Sales/Fixed Assets 2.89 3.55 2.95
Paid up Capital 11.74 11.74 11.74 Debt/Cash Profit 2.64 5.14 4.06
Reseves and Surplus 700.52 714.71 740.21 Interest Coverage 6.69 2.36 1.84
Minority Interest - - - Average Collection Period* (Days) 31 57 59
Total Equity 712.26 726.45 751.95 Average Payable Period* (Days) 5 10 13
Long Term Borrowings 233.93 234.14 191.10
Deferred Tax Liabilities 43.95 44.18 40.56 Rating of Aarti Steels Limited (New Customer)
Other Long Term Liabilities - - - Parameter Weightage of Marks Marks Given to Party
Long Term Provisions 4.97 6.05 6.26 Management , Experience of
Total Non Current Liabilities 282.85 284.37 237.92 Promoters , and Industry 7 6
Short Term Borrowings 149.89 198.09 186.10 Prospects
Trade Payables 41.83 48.28 62.96
Market report 14 12
Other Current Liabilities 115.87 159.44 102.50
Short Term Provisions 6.31 2.42 5.37 Our Past Experience including
0 0
Total Current Liabilities 313.90 408.23 356.93 Margins
Total Liabilities 1,309.01 1,419.05 1,346.80
Financial analysis 59 25

Application of Funds External ratings Profitability and

20 13
Tangible Assets 503.37 472.76 519.40 Risk Perception
Intangible Assets 0.49 0.58 0.64 Total 100 56
Total Net Fixed Assets 503.86 473.34 520.04
Tangible Assets Capital WIP 4.55 32.11 46.30 About the Company
Intangible Assets Under Development/WIP - - - Aarti Steels Limited (ASL), is a part of the Aarti Group, promoted by the Ludhiana-based Mittal
Non Current Investments 74.78 74.79 81.96 family led by Mr. Shiva Prasad Mittal. ASL is a vertically integrated manufacturer of carbon
Long Term Loans and Advances 5.63 6.47 7.03 and alloy steel, mainly for the automobile sector. ASL had two plants in Cuttack, Odisha, and
Other Non-Current Assets 68.69 73.08 14.08 Ludhiana, Punjab. However, its plant in Ludhiana has been de-merged to Aarti Steel
Deferred Tax Assets(Net) - - - International Limited and the Cuttack plant remains with ASL. ASL’s plant in Cuttack has the
Total Non Current Assets 153.65 186.45 149.37 capacity to manufacture sponge iron of 3,20,000 tonnes per annum (TPA), ingots/billets of
Current Investments - - - 1,20,000 TPA, rolled products of 2,00,000 TPA along with ferro alloys manufacturing capacity
Inventories 297.61 360.63 391.77 of 36 MVA and captive power plants of 90 MW. The ferroalloys manufacturing facility is used
Trade Receivables 248.99 276.01 215.93 to carry out the conversion of ferrochrome for Tata Steel Limited.
Cash and Bank Balances 14.85 9.31 4.93
Short Term Loans and Advances 0.10 5.60 0.42 Rating Provided by Us (Internal Credit Rating)
Other Current Assets 89.95 107.71 64.34
Total Current Assets 651.50 759.26 677.39 Grade Provided: BBB
Total Assets 1,309.01 1,419.05 1,346.80 Remarks: Moderate Safety

Conclusion
The company’s revenue has decreased in fiscal 2024 and profitability has decreased year over year. The operating margin has improved in fiscal 2024 but net margin has decreased year over year. The net
worth base has increased year over year. Leverage is good as on 31.03.2024. Interest coverage ratio and current ratio both are moderate. Average payable days are 13. External rating is A/A2+/Stable
(Downgraded from A+/A1 and removed from Rating Watch with Developing Implications) indicates adequate saftey of investment and a stable outlook. ICRA has consolidated the financials of ASL with its
associate entity, Aarti Green Tech Limited (AGTL), as ASL has provided a corporate guarantee to the lender of AGTL. Previously, ICRA had also considered another Group company, Creative Infra Limited (CIL),
in which ASL had a shareholding of ~38%, for the consolidated rating view. However, CIL has been merged into another Group company, Aarti International Limited, as per the restructuring scheme and hence
CIL has not been considered for arriving at the ratings of ASL. So, as per available financials and credit perspectives, exposures and profitability should be maintained accordingly.

Exposure Recommendation
Credit Exposure of upto Rs.25 Lakhs can be approved by BM, upto Rs.100 Lakhs can be approved by RM, upto Rs.200 Lakhs can be approved by BU Head and any other sum above these can only be approved
by CMD.

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