AI assistant
Simplex Castings Ltd. — Capital/Financing Update 2025
May 8, 2025
61924_rns_2025-05-08_370b7e00-e8bc-4a3f-b10b-8202818ed0e8.pdf
Capital/Financing Update
Open in viewerOpens in your device viewer
Simplex Castings Ltd.
==> picture [76 x 58] intentionally omitted <==
Corporate Office : 32,Shivnath Complex G.E. Road, Supela, Bhilai - 490023 (C.G) India Phone : +91-788-2290483 /84 /85 Fax : +91-788-2285664 E-Mail : [email protected] Website : www.simplexcastings.com
==> picture [80 x 73] intentionally omitted <==
CIN : L27320MH1980PLC067459
May 08, 2025
To, To, The Manager The Manager Department of Corporate Services Calcutta Stock Exchange BSE Limited Address: 7, Lyons Range, PJ Towers, Dalal Street Dalhousie, Kolkata700001, Mumbai-400001 West Bengal Scrip Code: 513472 Scrip Code: 29066
Subject: - Intimation regarding Credit Rating under Regulation 30 of SEBI Listing Regulations.
Dear Sir/Madam,
Pursuant to Regulation 30 of the SEBI (LODR) Regulation, 2015, this is to inform you that Crisil Ratings Limited (“Credit Rating Agency”) has Assigned the Ratings to Bank Facilities of Simplex Castings Limited, as under –
| Facilities | Amount (Rs in | Rating | Rating |
|---|---|---|---|
Cr) |
|||
Action |
|||
| Long Term Bank Facilities |
56.00 | Crisil BB/Stable (Upgraded from ‘Crisil BB-/Stable) |
Assigned |
| Short Term Bank Facilities |
16.00 | Crisil A4+ (Reaffirmed) |
Assigned |
The rating letter received from Crisil Ratings Limited is attached as an Annexure- I.
The above information will also be available on the website of the Company at www.simplexcastings.com. Kindly take the same on record and acknowledge.
Thanking You.
Yours Faithfully,
For Simplex Castings Limited
SANGEETA Digitally signed by SANGEETA KETAN SHAH KETAN SHAH Date: 2025.05.08 15:06:58 +05'30'
Sangeeta Ketan Shah Managing Director DIN- 05322039
OFFICE
ADDRESS
PHONE
FAX
Regd. Office : 601/602 A, FAIRLINK CENTER, OFF ANDHERI LINK ROAD, ANDHERI (W), MUMBAI -53 022-40034768 Kolkata : 119, PARK STREET, WHITE HOUSE 4[th] FLOOR KOLKATA - 700016 (W.B.) INDIA 08961045611 033-22493251 Bhilai (Plant) : 5, INDUSTRIAL ESTATE, BHILAI - 490026 (C.G.) INDIA 0788-4015273 0788-4034188 Rajnandgaon (Plant) : 223/2,224 INDUSTRIAL ESTATE, TEDESARA, RAJNANDGAON - 491441(C.G.) INDIA 9203901697 0788-2285664
[email protected] [email protected] [email protected] [email protected]
08/05/2025, 14:17
Rating Rationale
==> picture [556 x 76] intentionally omitted <==
Rating Rationale
May 06, 2025 | Mumbai
Simplex Castings Limited
Long-term rating upgraded to 'Crisil BB/Stable'; Short-term rating reaffirmed
Rating Action
| RatingAction | |
|---|---|
| Total Bank Loan Facilities Rated | Rs.72 Crore |
| Long Term Rating | Crisil BB/Stable(Upgraded from 'Crisil BB-/Stable') |
| Short Term Rating | Crisil A4+(Reaffirmed) |
Note: None of the Directors on Crisil Ratings Limited’s Board are members of rating committee and thus do not participate in discussion or assignment of any ratings. The Board of Directors also does not discuss any ratings at its meetings. 1 crore = 10 million Refer to Annexure for Details of Instruments & Bank Facilities
Detailed Rationale
CRISIL Ratings has upgraded its rating on the long-term bank loan facility of Simplex Castings Ltd (SCL) to ‘Crisil BB/Stable’ from ‘Crisil BB-/Stable’ while reaffirming the short term rating at ‘Crisil A4+’.
The rating upgrade reflects healthy revenue growth marked by estimated revenue of more than Rs.170 crore in FY25 from Rs.122.8 crore in FY24 while profitability improved from 15% to 18% during the same period. The same has happened due to streamlining operations wherein bulk orders for reduced product line have increased also timely commencement of capex has increased sales and profitability. Gearing has reduced to less than 0.7 times in FY25. Further inventory cycle has been reduced, which has led to a reduction in GCA days. This should also provide cushion to liquidity and reduce dependence on external working capital limits, over the medium term.
The ratings reflect the extensive experience of the promoters in the heavy engineering castings business and moderate financial risk profile of the company. These strengths are partially offset by exposure to intense competition, volatility in raw material prices and large working capital requirement.
Analytical Approach
Crisil Ratings has evaluated the standalone business and financial risk profiles of SCL. Unsecured loans of Rs. 23.32 crore as on 31[st] march 2024 is treated as 75% equity, 25% debt as the unsecured loans are subordinated to all forms of external borrowing and is expected to remain in the business, over the medium term.
Key Rating Drivers & Detailed Description Strengths: Extensive experience of the promoters
https://www.crisilratings.com/mnt/winshare/Ratings/RatingList/RatingDocs/SimplexCastingsLimited_May 06_ 2025_RR_367397.html
1/9
08/05/2025, 14:17
Rating Rationale
SCL has been involved in the heavy engineering castings business for more than five decades. The company is promoted by Mr. Ketan Moolchand Shah and Ms. Sangeeta Ketan Shah. The promoters have more than three decades of experience in the steel – castings and foundry business; their strong understanding of market dynamics and healthy relations with customers and suppliers should continue to support the business. Further, a diversified end-user industry base insulates the business from industry slowdown and thereby boosts steady growth, over the medium term.
Moderate financial risk profile
The capital structure should remain supported by limited reliance on external funds. Gearing is estimated at less than 0.7 time and total outside liabilities to adjusted networth ratio of less than 1.2 times as on March 31, 2025. Debt protection metrics should continue to be comfortable due to healthy profitability. The interest coverage ratio is estimated at more than 3.5 times and net cash accrual to total debt ratio at more than 0.4 time for fiscal 2025.
Weaknesses:
Exposure to intense competition
The steel industry is highly cyclical and fragmented due to low capital requirement and limited value addition. The low entry barrier has led to several players catering to regional demand. The consequent intense competition along with limited product diversity (due to commodity nature of products) may continue to constrain scalability, pricing power and profitability.
Exposure to volatility in raw material prices
Since cost of procuring the key raw materials (iron/steel scrap, metalised aluminum, pillow block, mild steel plates) accounts for 60-70% of production cost, even a slight variation in price can drastically impact the operating margin. Further, operations are non-integrated and restricted to the downstream stage of the steel value chain. The margin is also susceptible to changes in market prices according to demand-supply situations.
Large working capital requirement
Gross current assets is estimated to be at more than 200 days as on March 31, 2025, driven by high debtor and inventory levels. Long credit period is extended to customers, owing to nature of business. Furthermore, due to operational needs, high work in process & inventory is maintained. Debtor and inventory days is estimated to remain high at more than 65 and 150 days, respectively in FY25. Working capital management is expected to remain intense, over the medium term.
Liquidity: Adequate
Average month-end bank limit utilization is high at around 95 percent for the past twelve months ended February 2025. Cash accrual are expected to be over Rs.19 crore which are sufficient against term debt obligation of less than Rs.2 crore over the medium term. Current ratio is estimated to remain moderate at 1.3 times on March 31, 2025. The promoters are likely to extend support in the form of equity and unsecured loans to meet its working capital requirements and repayment obligations.
Outlook: Stable
CRISIL Ratings believe SCL will continue to benefit from the extensive experience of its promoter, and established relationships with clients.
Rating Sensitivity Factors
Upward Factors
-
Moderate revenue growth of more than 10% while sustaining healthy margin leading to higher than expected net cash accruals
-
Improvement in the working capital cycle resulting in higher cushion in bank limit along with moderate financial risk profile
https://www.crisilratings.com/mnt/winshare/Ratings/RatingList/RatingDocs/SimplexCastingsLimited_May 06_ 2025_RR_367397.html
2/9
08/05/2025, 14:17
Rating Rationale
Downward Factors
-
Significant decline in scale of operations or operating margin dropping below 9%, resulting in lower-than-expected net cash accrual
-
Intense working capital management or any major debt funded capex plans adversely impacting capital structure and liquidity
About the Company
Set up as a partnership firm in 1971, the entity got reconstituted into a private-limited company in 1980 and into a publiclimited company in 1993. SCL manufactures heavy engineering castings in grey cast iron, alloy cast iron and stainless steel, which find application in industries such as railways, steel, oil and gas, power and defence. It has three facilities at Bhilai and Rajnandgaon (all in Chhattisgarh), with total installed capacities of 29,600 metric tonne per annum.
SCL is listed on the Bombay Stock Exchange. The company is managed by Mr. Ketan Moolchand Shah (chairman and whole-time director), Ms. Sangeeta Ketan Shah (managing director) and Mr. Sajal Kumar Ghosh (whole-time director).
Key Financial Indicators
| Key Financial Indicators | |||
|---|---|---|---|
As on/for theperiod ended March 31 |
Unit | 2024 | 2023 |
| Operating income | Rs crore | 122.83 | 116.60 |
| Reportedprofit after tax(PAT) | Rs crore | 2.39 | -16.99 |
| PAT margin | % | 1.95 | -14.57 |
| Adjusted debt/adjusted networth | Times | 0.86 | 0.96 |
| Interest coverage | Times | 2.15 | 1.51 |
Status of non cooperation with previous CRA
SCL had not cooperated with India Ratings and Research Pvt Ltd, which classified it as non-cooperative vide release dated August 18, 2023. The reason provided by India Ratings and Research Pvt Ltd was non-furnishing of information for monitoring of ratings.
SCL had also not cooperated with Brickwork Ratings India Pvt Ltd, which classified it as non-cooperative vide release dated August 13, 2020. The reason provided by Brickwork Ratings India Pvt Ltd was non-furnishing of information for monitoring of ratings.
Further, SCL had not cooperated with Acuite Ratings and Research Ltd, which has classified it as non-cooperative vide release dated May 10, 2019. The reason provided by Acuite Ratings and Research Ltd was non-furnishing of information for monitoring of ratings
Any other information: Not Applicable
Note on complexity levels of the rated instrument:
Crisil Ratings` complexity levels are assigned to various types of financial instruments and are included (where applicable) in the 'Annexure - Details of Instrument' in this Rating Rationale.
Crisil Ratings will disclose complexity level for all securities - including those that are yet to be placed - based on available information. The complexity level for instruments may be updated, where required, in the rating rationale published subsequent to the issuance of the instrument when details on such features are available.
https://www.crisilratings.com/mnt/winshare/Ratings/RatingList/RatingDocs/SimplexCastingsLimited_May 06_ 2025_RR_367397.html
3/9
08/05/2025, 14:17
Rating Rationale
For more details on the Crisil Ratings` complexity levels please visit www.crisilratings.com. Users may also call the Customer Service Helpdesk with queries on specific instruments.
Annexure - Details of Instrument(s)
| ISIN | Name Of Instrument |
Date Of Allotment |
Coupon Rate (%) |
Maturity Date |
Issue Size (Rs.Crore) |
Complexity Levels |
Rating Outstanding with Outlook |
|---|---|---|---|---|---|---|---|
| NA | Bank Guarantee | NA | NA | NA | 16.00 | NA | Crisil A4+ |
| NA | Cash Credit | NA | NA | NA | 34.00 | NA | Crisil BB/Stable |
| NA | Proposed Working Capital Facility |
NA | NA | NA | 22.00 | NA | Crisil BB/Stable |
Annexure - Rating History for last 3 Years
| Current | Current | Current | 2025 (History) | 2025 (History) | 2024 | 2024 | 2023 | 2023 | 2022 | 2022 | Start of 2022 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Instrument | Type | Outstanding Amount |
Rating | Date | Rating | Date | Rating | Date | Rating | Date | Rating | Rating |
| Fund Based Facilities |
LT | 56.0 | Crisil BB/Stable |
-- | 26-09-24 | Crisil BB-/Stable |
-- | -- | Withdrawn (Issuer Not Cooperating)* |
|||
| Non-Fund Based Facilities |
ST | 16.0 | Crisil A4+ | -- | 26-09-24 | Crisil A4+ | -- | -- | Withdrawn (Issuer Not Cooperating)* |
All amounts are in Rs.Cr.
* - Issuer did not cooperate; based on best-available information
Annexure - Details of Bank Lenders & Facilities
| Facility | Amount (Rs.Crore) | Name of Lender | Rating |
|---|---|---|---|
| Bank Guarantee | 16 | Kotak Mahindra Bank Limited |
Crisil A4+ |
| Cash Credit | 34 | Kotak Mahindra Bank Limited |
Crisil BB/Stable |
| Proposed Working Capital Facility |
22 | Not Applicable | Crisil BB/Stable |
Criteria Details
| Criteria Details | Criteria Details | Criteria Details |
|---|---|---|
| Links to related criteria | ||
| Criteria for manufacturing, trading and corporate services sector (including approach for financial ratios) | ||
| Basics of Ratings (including default recognition, assessing information adequacy) | ||
| Media Relations | Analytical Contacts | Customer Service Helpdesk |
https://www.crisilratings.com/mnt/winshare/Ratings/RatingList/RatingDocs/SimplexCastingsLimited_May 06_ 2025_RR_367397.html
4/9
08/05/2025, 14:17
| 05/2025, 14:17 Rating Rationale |
||
| Ramkumar Uppara Media Relations Crisil Limited M: +91 98201 77907 B: +91 22 6137 3000 [email protected] Kartik Behl Media Relations Crisil Limited M: +91 90043 33899 B: +91 22 6137 3000 [email protected] Divya Pillai Media Relations Crisil Limited M: +91 86573 53090 B: +91 22 6137 3000 [email protected] |
Argha Chanda Director Crisil Ratings Limited B:+91 33 4011 8200 [email protected] Vishnu Sinha Associate Director Crisil Ratings Limited B:+91 33 4011 8200 [email protected] Jagrit Sharma Rating Analyst Crisil Ratings Limited B:+91 33 4011 8200 [email protected] |
Timings: 10.00 am to 7.00 pm Toll free Number:1800 267 3850 For a copy of Rationales / Rating Reports: [email protected] For Analytical queries: [email protected] |
https://www.crisilratings.com/mnt/winshare/Ratings/RatingList/RatingDocs/SimplexCastingsLimited_May 06_ 2025_RR_367397.html
5/9
08/05/2025, 14:17
Rating Rationale
https://www.crisilratings.com/mnt/winshare/Ratings/RatingList/RatingDocs/SimplexCastingsLimited_May 06_ 2025_RR_367397.html
6/9
08/05/2025, 14:17
Rating Rationale
Note for Media:
This rating rationale is transmitted to you for the sole purpose of dissemination through your newspaper/magazine/agency. The rating rationale may be used by you in full or in part without changing the meaning or context thereof but with due credit to Crisil Ratings. However, Crisil Ratings alone has the sole right of distribution (whether directly or indirectly) of its rationales for consideration or otherwise through any media including websites and portals.
About Crisil Ratings Limited (A subsidiary of Crisil Limited, an S&P Global Company)
Crisil Ratings pioneered the concept of credit rating in India in 1987. With a tradition of independence, analytical rigour and innovation, we set the standards in the credit rating business. We rate the entire range of debt instruments, such as bank loans, certificates of deposit, commercial paper, non-convertible/convertible/partially convertible bonds and debentures, perpetual bonds, bank hybrid capital instruments, asset-backed and mortgage-backed securities, partial guarantees and other structured debt instruments. We have rated over 33,000 large and mid-scale corporates and financial institutions. We have also instituted several innovations in India in the rating business, including ratings for municipal bonds, partially guaranteed instruments and infrastructure investment trusts (InvITs).
Crisil Ratings Limited ('Crisil Ratings') is a wholly-owned subsidiary of Crisil Limited ('Crisil'). Crisil Ratings Limited is registered in India as a credit rating agency with the Securities and Exchange Board of India ("SEBI").
For more information, visit www.crisilratings.com
About Crisil Limited
Crisil is a leading, agile and innovative global analytics company driven by its mission of making markets function better.
It is India’s foremost provider of ratings, data, research, analytics and solutions with a strong track record of growth, culture of innovation, and global footprint.
It has delivered independent opinions, actionable insights, and efficient solutions to over 100,000 customers through businesses that operate from India, the US, the UK, Argentina, Poland, China, Hong Kong and Singapore.
It is majority owned by S&P Global Inc, a leading provider of transparent and independent ratings, benchmarks, analytics and data to the capital and commodity markets worldwide.
For more information, visit www.crisil.com
Connect with us: TWITTER | LINKEDIN | YOUTUBE | FACEBOOK
CRISIL PRIVACY NOTICE
Crisil respects your privacy. We may use your contact information, such as your name, address and email id to fulfil your request and service your account and to provide you with additional information from Crisil. For further information on Crisil's privacy policy please visit www.crisil.com.
https://www.crisilratings.com/mnt/winshare/Ratings/RatingList/RatingDocs/SimplexCastingsLimited_May 06_ 2025_RR_367397.html
7/9
08/05/2025, 14:17
Rating Rationale
DISCLAIMER
This disclaimer is part of and applies to each credit rating report and/or credit rating rationale ('report') provided by Crisil Ratings Limited ('Crisil Ratings'). For the avoidance of doubt, the term 'report' includes the information, ratings and other content forming part of the report. The report is intended for use only within the jurisdiction of India. This report does not constitute an offer of services. Without limiting the generality of the foregoing, nothing in the report is to be construed as Crisil Ratings provision or intention to provide any services in jurisdictions where Crisil Ratings does not have the necessary licenses and/or registration to carry out its business activities. Access or use of this report does not create a client relationship between Crisil Ratings and the user.
The report is a statement of opinion as on the date it is expressed, and it is not intended to and does not constitute investment advice within meaning of any laws or regulations (including US laws and regulations). The report is not an offer to sell or an offer to purchase or subscribe to any investment in any securities, instruments, facilities or solicitation of any kind to enter into any deal or transaction with the entity to which the report pertains. The recipients of the report should rely on their own judgment and take their own professional advice before acting on the report in any way.
Crisil Ratings and its associates do not act as a fiduciary. The report is based on the information believed to be reliable as of the date it is published, Crisil Ratings does not perform an audit or undertake due diligence or independent verification of any information it receives and/or relies on for preparation of the report. THE REPORT IS PROVIDED ON “AS IS” BASIS. TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAWS, CRISIL RATINGS DISCLAIMS WARRANTY OF ANY KIND, EXPRESS, IMPLIED OR OTHER WARRANTIES OR CONDITIONS, INCLUDING WARRANTIES OF MERCHANTABILITY, ACCURACY, COMPLETENESS, ERROR-FREE, NON-INFRINGEMENT, NON-INTERRUPTION, SATISFACTORY QUALITY, FITNESS FOR A PARTICULAR PURPOSE OR INTENDED USAGE. In no event shall Crisil Ratings, its associates, third-party providers, as well as their directors, officers, shareholders, employees or agents be liable to any party for any direct, indirect, incidental, exemplary, compensatory, punitive, special or consequential damages, costs, expenses, legal fees or losses (including, without limitation, lost income or lost profits and opportunity costs) in connection with any use of any part of the report even if advised of the possibility of such damages.
The report is confidential information of Crisil Ratings and Crisil Ratings reserves all rights, titles and interest in the rating report. The report shall not be altered, disseminated, distributed, redistributed, licensed, sub-licensed, sold, assigned or published any content thereof or offer access to any third party without prior written consent of Crisil Ratings.
Crisil Ratings or its associates may have other commercial transactions with the entity to which the report pertains or its associates. Ratings are subject to revision or withdrawal at any time by Crisil Ratings. Crisil Ratings may receive compensation for its ratings and certain credit-related analyses, normally from issuers or underwriters of the instruments, facilities, securities or from obligors.
Crisil Ratings has in place a ratings code of conduct and policies for managing conflict of interest. For more detail, please refer to: https://www.crisil.com/en/home/our-businesses/ratings/regulatory-disclosures/highlighted-policies.html. Public ratings and analysis by Crisil Ratings, as are required to be disclosed under the Securities and Exchange Board of India regulations (and other applicable regulations, if any), are made available on its websites, www.crisilratings.com and https://www.ratingsanalytica.com (free of charge). Crisil Ratings shall not have the obligation to update the information in the Crisil Ratings report following its publication although Crisil Ratings may disseminate its opinion and/or analysis. Reports with more detail and additional information may be available for subscription at a fee. Rating criteria by Crisil Ratings are available on the Crisil Ratings website, www.crisilratings.com. For the latest rating information on any company rated by Crisil Ratings, you may contact the Crisil Ratings desk at [email protected], or at (0091) 1800 267 3850.
https://www.crisilratings.com/mnt/winshare/Ratings/RatingList/RatingDocs/SimplexCastingsLimited_May 06_ 2025_RR_367397.html
8/9
08/05/2025, 14:17
Rating Rationale
Crisil Ratings uses the prefix 'PP-MLD' for the ratings of principal-protected market-linked debentures (PPMLD) with effect from November 1, 2011, to comply with the SEBI circular, "Guidelines for Issue and Listing of Structured Products/Market Linked Debentures". The revision in rating symbols for PPMLDs should not be construed as a change in the rating of the subject instrument. For details on Crisil Ratings' use of 'PP-MLD' please refer to the notes to Rating scale for Debt Instruments and Structured Finance Instruments at the following link: htps://www.crisilratngs.com/en/home/our-business/ratngs/credit-ratngs-
scale.html
https://www.crisilratings.com/mnt/winshare/Ratings/RatingList/RatingDocs/SimplexCastingsLimited_May 06_ 2025_RR_367397.html
9/9