Crisil Ratings reaffirms ratings of Man Industries at 'A/A1' with 'stable' outlok

Crisil Ratings stated that SEBI vide its order dated 29th September 2025 has completed the forensic audit of the financial statements of MIIL and has imposed a penalty of Rs 25 lakhs each on MIIL, Ramesh Mansukhani (promoter), Nikhil Mansukhani (promoter) and Ashok Gupta (ex-CFO). The order also bans MIIL and its promoters from accessing securities markets for 2 years.

The SEBI action primarily relates to non-consolidation of the financial statements of Merino Shelters (MSPL) for the year FY15-FY21 and partial disclosure of related party transactions.

Crisil Ratings has taken note of the order and expects impact on the business and financial risk profile of the company to be limited, given its healthy liquidity position and absence of any major plans to raise funds in near term.

However, the financial flexibility of the company will be a monitorable as the implementation of capacity expansions is currently underway and commercialization of expanded capacities within expected timelines will be critical.

In Q1 fiscal 2026, MIIL has recorded revenue of Rs.742 crores with operating margins at 7%. The company currently has healthy revenue visibility for fiscal 2026 with an order book of Rs 4,700 crore to be executed in the next 6-12 months.

MIIL is in the process of increasing its product offerings in India and overseas. The company is currently undertaking a capex of Rs 1,180 crore. The total will capex be funded via debt of Rs 800-850 crore and balance through equity and internal accruals. The capex, mainly towards value-added products, is also expected to boost the profitability of the company upon commissioning.

The financial risk profile of the company remains comfortable, as reflected in adequate debt coverage and healthy capitalization ratios. The debt coverage and capitalization ratios are expected to remain comfortable over the medium term as well, in-spite of the debt funded planned capex.

The ratings continue to reflect the established market position of MIIL in the submerged arc welding (SAW) pipes industry along with a healthy financial risk profile. These strengths are partially offset by the working capital-intensive nature of operations and the susceptibility of the company to cyclicality in end-user industries along with volatility in raw material prices and foreign exchange (forex) rates.

MIIL is one of the largest SAW pipe players in India with combined capacity of 11.75 lakh tonne per annum, distributed equally between HSAW and LSAW.

On a consolidated basis, net profit of Man Industries (India) rose 44.99% to Rs 27.62 crore while net sales declined 0.88% to Rs 742.13 crore in Q1 June 2025 over Q1 June 2024.

The scrip fell 2.62% to currently trade at Rs 372.95 on the BSE.

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