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The agency has reaffirmed the company’s short-term rating at 'Crisil A1+'.
Crisil Ratings stated that the revision in outlook reflects continuation of low operating margins leading to net cash accruals significantly lower than previous expectations.
Net cash accruals were over Rs 495 crore in the two fiscals through 31 March 2023 due to increased realizations attributable to favorable market conditions.
However, during the last two fiscals through fiscal 2025, operating margins have remained volatile primarily driven by high power costs resulting in reduced productions.
Also, the realizations have seen a moderation to over Rs 80,000 per ton during these fiscals against over Rs 1,10,000 per ton in fiscals 2022-23. This has led to net cash accruals of below Rs 175 crore during fiscals 2024-25.
With continued headwinds from high power costs and stable raw material prices in the first quarter of fiscal 2026, operating margin was at 10.3%. Recovery in production and improvement in operating margins resulting in higher net cash accruals will remain a key rating sensitivity factor.
The ratings continue to reflect extensive experience of promoters and strong financial risk profile. These strengths are partially offset by exposure to volatility in prices of raw materials and finished goods and cyclicality in the ferro alloys industry.
Maithan Alloys (MAL) manufactures ferroalloys such as ferro manganese, ferro silicon and silico manganese, with varying proportions of other chemical compositions.
The company's consolidated net profit rose 17.44% to Rs 536.14 crore on a 68.58% increase in revenue to Rs 632.31 crore in Q1 FY26 over Q1 FY25.
The scrip fell 1.06% to currently trade at Rs 1100.95 on the BSE.