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Man Industries gains after Crisil uprades ratings to 'A+' with 'stable' outlook

02-Jun-26   14:40 Hrs IST

The agency has reaffirmed the company's short-term rating at 'Crisil A1'.

Crisil Ratings stated that the upgrade reflects a significant improvement in MIIL's business risk profile following the strategic acquisition of National Pipe Company (NPC), Saudi Arabia, which was completed on 21 May 2026.

This acquisition is expected to significantly improve MIIL's scale of operations by over 50-60% and operating profit before depreciation, interest, and tax (OPBDIT) margins to around 14-15% (12.3% in fiscal 2026). It will also enhance geographic diversification and add 430,000 metric tonnes (MT) of LSAW/HSAW capacity in Saudi Arabia.

NPC is expected to be revenue and earnings accretive from day one, given its fully operational status. The acquisition will also provide MIIL with an immediate entry into the growing Saudi Arabian market.

The upgrade also factors in the improvement in MIIL's operating performance, supported by OPBDIT margins improving to 12.3% in fiscal 2026, from 8-10% in the past, driven by better product mix focused on exports and value-added products.

The NPC acquisition, valued at Rs 1,000 crores (USD 102 million), was funded through a mix of debt (USD 70 million) and equity (USD 32 million). Despite the incremental debt, MIIL's financial risk profile is expected to remain comfortable. Liquidity is expected to remain strong, with net cash accruals of over Rs 450 crores against repayment obligations of Rs 240-250 crore.

The ratings continue to reflect MIIL's established market position in the submerged arc welding (SAW) pipes industry, along with a healthy financial risk profile.

These strengths are partially offset by the integration risks associated with the NPC acquisition, the working capital-intensive nature of operations, and the company's susceptibility to cyclicality in end-user industries, along with volatility in raw material prices and foreign exchange (forex) rates.

Man Industries India (MIIL) is one of the largest SAW pipe players in India with combined capacity of 11.75 lakh tonne per annum, distributed equally between helically submerged arc welded (HSAW) and longitudinal submerged arc welded (LSAW) and electric resistance welded (ERW).

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