India Ratings affirms Gallantt Ispat at 'IND A'; maintains 'stable' outlook

Gallantt Ispat said that India Ratings and Research has affirmed the company's long-term issuer rating at 'IND A' with 'stable' outlook.

India Ratings stated that a timely completion of the ongoing capex and ramp-up of incremental capacities, resulting in improved and less volatile EBITDA margins, leading to the net adjusted leverage remaining below 1.5x, on a sustained basis, would lead to a positive rating action.

However, a substantial decline in the scale of operations, operating margins and/or the net adjusted leverage exceeding 2.25x, on a sustained basis, will lead to a negative rating action. Any unrelated diversion of funds could also lead to a negative rating action.

Gallantt Ispat is a partially-integrated re-rolled products (TMT bars, 950,400tpa) manufacturer with an in-house sponge iron (918,000tpa) and mild steel billets production (957,000tpa) with two facilities located at Kutch (Gujarat) and Gorakhpur (Uttar Pradesh). The operations are backed by its 100% captive power generation (129MW).

The company's consolidated net profit surged to Rs 27.54 crore in the quarter ended September 2022 as against Rs 6.20 crore during the previous quarter ended September 2021. Sales rose 38.41% to Rs 931.31 crore in Q2 FY23 over Q2 FY22.

The scrip declined 0.63% to currently trade at Rs 62.70 on the BSE.

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