Regulatory Disclosure

KIC Metaliks Limited (Scrip Code: 513693) intimated BSE Limited on September 12, 2026, pursuant to Regulation 30 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, about the upgrade of its credit rating by CARE Ratings, a SEBI-registered credit rating agency.

Rating Action Details

CARE Ratings upgraded the company's credit ratings as follows:

  • Long-term/Short-term bank facilities (₹25.00 crore): Upgraded to CARE BBB+; Stable / CARE A3+ from CARE BBB; Stable / CARE A3
  • Long-term bank facilities (₹95.01 crore): Upgraded to CARE BBB+; Stable from CARE BBB; Stable

All facilities are regulated by RBI and classified as Simple complexity. The term loan portion (₹0.01 crore) has a maturity date of March 2027.

Rating Rationale and Key Drivers

The rating upgrade reflects:

  • Improvement in capacity utilization to 90% in FY26 from 72% in FY25, further improving to 96% in Q1FY27
  • Enhanced financial risk profile with overall gearing ratio improving to 0.59x as on March 31, 2026 from 0.71x as on March 31, 2025
  • Classification of Bengal Energy Limited (BEL) as a related party from FY26 onwards, with TSCPL as the ultimate holding company for both KML and BEL
  • Strategic relationship with BEL, which supplied 35% of KML's total purchases in FY26, providing supply chain efficiencies and raw material availability
  • Experienced promoters with Radhey Shyam Jalan as CMD and fund support history, including ₹5 crore infusion from TSCPL in FY26 as unsecured loans
  • Debt protection metrics improvement: Interest coverage ratio improved to 2.59x in FY26 from 1.23x in FY25, and further to 7.52x in Q1FY27
  • Full prepayment of term loan obligations during FY26, including ₹1.25 crore prepayment in Q4FY26
  • Presence of backward integration through 3,60,000 MTPA sinter plant and 4.7 MW waste heat-based power plant for captive consumption

Financial Performance

Audited Financials (₹ crore):

  • Total Operating Income: ₹717.68 (FY25) → ₹782.89 (FY26) - 9% YoY growth
  • PBILDT: ₹12.76 (FY25) → ₹25.07 (FY26) - PBILDT margin improved to 3.20% from 1.78%
  • PAT: ₹-6.09 (FY25) → ₹1.05 (FY26)
  • Gross Cash Accruals: ₹3.25 (FY25) → ₹16.41 (FY26)
  • Total Debt/GCA: 38.15x (Mar 2025) → 6.25x (Mar 2026)

Q1FY27 Unaudited Performance (₹ crore):

  • Total Operating Income: ₹228.23 (vs ₹152.00 in Q1FY26)
  • PBILDT: ₹7.29
  • PAT: ₹1.02

Rating Constraints and Risks

  • Cyclical nature of steel industry with intense competition from unorganized sector
  • Single-product profile (pig iron) with low profitability margins (3.20% PBILDT margin in FY26)
  • Exposure to commodity price fluctuations - raw materials account for 84% of total cost of sales in FY26
  • Exposure to increasing environmental compliance requirements requiring potential additional capital expenditure
  • Raw material procurement fully linked with Orissa Mining Corporation Limited

Liquidity Position

Adequate liquidity as of March 31, 2026:

  • Cash and liquid investments: ₹10.07 crore
  • Current ratio: 1.18x
  • Average fund-based working capital utilization: 65.43% (12 months ended July 2026)
  • Debt repayment obligation for FY27: Negligible (against expected sufficient cash accruals)

Outlook and Sensitivity Factors

Stable Outlook: Reflects expectation of sustained satisfactory financial risk profile backed by favorable demand scenario.

Positive Rating Factors:

  • Increase in scale of operations and operating margin beyond 6% sustained
  • Maintenance of overall gearing ratio below 0.4x with TD/PBILDT ratio below 2x sustained

Negative Rating Factors:

  • Moderation in average sales realization from current levels sustained
  • Substantial debt-funded capex resulting in overall gearing above 1.00x sustained

Company Background

KIC Metaliks Limited, incorporated in 1986, manufactures pig iron with installed capacity of 2,35,000 MTPA in Durgapur and trades coking coal & Low Ash Metallurgical Coke. The company operates a 3,60,000 MTPA sinter plant and 4.7 MW waste heat-based power plant for captive consumption.