The agency has also affirmed the company’s short-term rating at ‘[ICRA] A1+’.
ICRA stated that the ratings favourably factor in the established position of Kirloskar Ferrous Industries (KFIL) in the foundry-grade pig iron and ferrous castings businesses.
Despite commodity headwinds, the company’s financial performance continues to remain comfortable as reflected in the healthy operating profits reported in FY2025 and H1 of FY2026.
The company is a part of the reputed Pune-based Kirloskar Group, which has a proven management track record.
The ratings derive comfort from the backward integration achieved at KFIL‘s manufacturing plant through coke oven plant, captive power generation, pulverized coal injection (PCI) plant which leads to substantial cost savings. Besides, the commencement of operations at the Bharath iron ore mine has partially reduced reliance on external iron ore purchases, resulting in cost savings.
The ratings factor in KFIL’s established relationships with large original equipment manufacturers (OEMs). ICRA notes the high customer concentration in the castings segment, though it derives comfort from the fact that KFIL is the single source supplier in most of these cases, which leads to customer retention and repeat orders.
The ratings also derive comfort from the comfortable consolidated financial profile of KFIL, marked by healthy credit metrics.
Despite the large capex plans going forward, ICRA expects KFIL’s comfortable credit metrics to sustain going forward given the healthy cash generation expected which will limit dependence on debt.
The ratings are constrained by the vulnerability of the company’s operating profit margin (OPM) to fluctuating raw material prices, given the commoditised nature of the pig iron business.
The ratings are constrained by the casting division’s exposure to the inherent demand cyclicality in the key end-user segments (both commercial vehicle and tractor segments).
Kirloskar Ferrous Industries (KFIL) is part of Pune-based Kirloskar Group. KFIL manufactures pig iron, and ferrous castings such as cylinder blocks, cylinder heads, axles and transmission parts and different types of housings required in Automobile, Tractor and Diesel engine related industries.