Inducto Steel Limited has received credit rating reaffirmation from Acuite Ratings and Research Limited, maintaining its position in the ship breaking and steel trading sector. The rating agency, through its press release dated March 19, 2026, has reaffirmed the company's credit ratings across its banking facilities.

Credit Rating Details

Acuite Ratings has maintained its assessment of Inducto Steel's creditworthiness across different facility types:

The rating reaffirmation factors the company's established presence in the ship breaking and steel trading business, supported by the promoters' extensive industry experience spanning over three decades.

Financial Performance Analysis

The company demonstrated robust revenue growth in FY2025, with significant changes in its operational metrics:

The revenue improvement was primarily driven by increased availability of vessels for breaking and a sharp surge in traded steel sales, which rose to Rs. 109.09 crore in FY2025 from Rs. 31.51 crore in FY2024. However, the company reported an EBITDA loss of Rs. 2.31 crore due to lower steel realisations and increased trading operations.

Operational Strengths and Challenges

The rating agency highlighted several key factors supporting the reaffirmation. The promoters' established presence in the ship recycling industry provides strong operational familiarity and market access at Alang, a key ship-breaking hub. The company currently has two vessels named Kosta and Bodha under dismantling, providing near-term revenue visibility.

However, the assessment also identified areas of concern. The financial risk profile remains moderate with a reduced net worth of Rs. 39.49 crore as of March 31, 2025, compared to Rs. 43.21 crore in FY2024. Working capital operations remained moderately intensive, with gross current asset days at 62 days in FY2025.

Business Operations and Market Position

Incorporated in 1988, Inducto Steel Limited operates as a BSE-listed company engaged in ship breaking and steel processing activities in the Alang-Sosiya belt of Bhavnagar, Gujarat. The company operates on a 2,385 sq. m plot with a 45-meter frontage, leased from Gujarat Maritime Board, and also trades in steel products.

The company's operations remain susceptible to ship availability and volatile steel prices, with geopolitical factors often restricting vessel inflow. Despite these challenges, the rating agency noted that liquidity remains adequate, supported by the absence of long-term debt obligations and moderate current ratio of 1.58 times as of March 31, 2025.

Rating Outlook and Sensitivities

The stable outlook reflects expectations for gradual improvement in profitability with steel price stabilisation. The rating remains sensitive to the company's ability to improve profitability, maintain cost discipline, and efficiently manage its working capital cycle amid volatile market conditions.

Potential upward rating triggers include increase in operating income and margins, along with generation of net cash accruals above Rs. 7 crore. Conversely, downward pressure could arise from absence of operational revival with net cash accruals falling below Rs. 2.50-3.00 crore or significant additional investments in group companies.

Source: None/Company/INE146H01018/316610c5-ae80-4c36-861d-474dd3beac21.pdf

Inducto Steel Limited has announced its Q3FY26 financial results under Regulation 33, marking a significant operational turnaround with the company returning to profitability after consecutive quarters of losses. The results for the quarter ended December 31, 2025, demonstrate improved financial performance across key metrics.

Board Meeting and Regulatory Compliance

The unaudited standalone and consolidated financial results were reviewed by the Audit Committee and subsequently approved by the Board of Directors at their meeting held on February 13, 2026. The meeting commenced at 2:00 PM and concluded at 2:35 PM. The results have been prepared in accordance with Indian Accounting Standards (Ind-AS) and subjected to limited review by S.N. Shah & Associates, Chartered Accountants.

Financial Performance Overview

The company achieved a net profit of ₹14.33 lakhs in Q3FY26, representing a remarkable improvement from the net loss of ₹59.05 lakhs recorded in the same quarter of the previous year. This turnaround reflects the company's enhanced operational efficiency and cost management initiatives.

Nine-Month Performance Analysis

For the nine-month period ended December 31, 2025, Inducto Steel reported total income of ₹10,116.50 lakhs compared to ₹11,893.62 lakhs in the corresponding period of FY24. Despite lower revenue, the company significantly reduced its net loss to ₹84.97 lakhs from ₹377.41 lakhs in the previous year, indicating substantial improvement in cost control and operational efficiency.

Segment-wise Performance

The company operates through two primary geographic segments - Mumbai and Bhavnagar. In Q3FY26, the Bhavnagar segment contributed ₹2,826.78 lakhs to revenue, while the Mumbai segment generated ₹547.17 lakhs. The segment results showed Mumbai achieving a profit of ₹13.68 lakhs and Bhavnagar contributing ₹48.28 lakhs before finance costs and tax.

Balance Sheet Highlights

The company's total segment assets stood at ₹13,419.64 lakhs as of December 31, 2025, compared to ₹8,552.25 lakhs in the previous year. Total segment liabilities increased to ₹9,555.22 lakhs from ₹4,608.74 lakhs, reflecting the company's expanded operations and working capital requirements.