Narmadesh Brass Industries IPO

The company claims to operate a single, integrated manufacturing facility with in-house production, quality control, and dispatch. It has installed capacities of 4,320 MT per annum each for brass rods and brass billets, and 1,600 MT per annum for brass components.

The company claims that the manufacturing facility is located in proximity to raw material suppliers, customers, transport infrastructure, and skilled labour. They also claim that the location supports efficient logistics, availability of utilities, and operational cost management, contributing to smoother manufacturing and distribution operations.

The company’s manufacturing facility is ISO 9001:2015 certified for quality management systems.

The company has seen a consistent increase in revenue from operations. Revenue from operations increased from Rs 59.96 crore in FY23 to Rs 78.88 crore in FY24 to Rs 87.72 crore in FY25.

A significant portion of the company’s revenue is derived from brass rods and brass billets. Revenue from these products aggregated to Rs 16.99 crore (51.08 percent) of the total revenue in the period ended September 30, 2025, Rs 59.93 crore (69.14 percent) in FY25, Rs 36.65 crore (46.46 percent) in FY24, and Rs 32.64 crore (54.43 percent) in FY23. Any decline in demand, pricing pressure, or disruption in the manufacturing of these products could materially affect revenue stability, margins, and overall financial performance.

The company relies on a concentrated supplier base for sourcing key raw materials, which increases supply-side risk. Purchases from the top 10 suppliers aggregated to Rs 22.11 crore (77.81 percent) of total purchases in the period ended September 30, 2025, Rs 52.91 crore (67.69 percent) in FY25, Rs 50.28 crore (73.95 percent) in FY24 and Rs 41.98 crore (80.26 percent) in FY23. Any disruption in supply, deterioration in supplier relationships, price volatility, or inability of suppliers to meet quality or delivery requirements could adversely impact production continuity, cost structure, and profitability.

The company’s revenues are significantly dependent on a limited number of customers, which may affect revenue predictability. Revenue from the top 10 customers was Rs 28.91 crore (84.59 percent) in the period ended September 30, 2025, Rs 76.83 crore (87.59 percent) in FY25, Rs 63.52 crore (80.52 percent) in FY24, and Rs 48.69 crore (81.20 percent) in FY23. The loss of any major customer, a fall in order volumes, or delayed payments could materially impact the company’s business operations, cash flows, and financial performance.

A substantial portion of the company’s revenue is geographically concentrated in Gujarat, Delhi, and Maharashtra. Revenue from these states aggregated to Rs 31.47 crore (92.07 percent) in the period ended September 30, 2025, Rs 64.08 crore (73.06 percent) in FY25, Rs 74.38 crore (94.29 percent) in FY24, and Rs 53.22 crore (88.76 percent) in FY23. Gujarat alone accounted for Rs 21.72 crore (63.55 percent) of revenue in the period ended September 30, 2025, Rs 49.37 crore (56.28 percent) in FY25, Rs 36.26 crore (45.97 percent) in FY24 and Rs 41.24 crore (68.77 percent) in FY23. This high level of geographic concentration makes the company susceptible to local and regional disruptions.

The company’s operations are highly sensitive to fluctuations in the prices and availability of key raw materials such as brass scrap, copper scrap and zinc scrap. Volatility arising from global commodity prices, exchange rate movements, import duties and policy changes may adversely impact production costs, margins and profitability, and the company may not always be able to pass on such increases to customers.

The company’s business is subject to seasonal trends, with relatively lower sales volumes in the first half of the financial year and higher sales in the second half, often accompanied by margin fluctuations. Any deviation from this established seasonal pattern or inability to manage volume–margin trade-offs could adversely affect revenue stability, profitability and overall financial performance.

The company and its promoters are involved in certain ongoing tax proceedings. Any adverse judgment in these cases can be detrimental to the company’s business prospects.

As of the period ended September 30, 2025, the company’s trade receivables were Rs 13.36 crore. Any delay in collections may adversely impact operations.

The company reported negative cash flows from operating activities amounting to Rs 7.90 crore in FY24 and Rs 2.85 crore in FY23. The negative cash flows were due to the increase in trade receivables, inventories, and a decrease in current liabilities and creditors, since the company operates in a high working capital requirement business. The negative cash flows from the investing activities were Rs 1.26 crore in the period ended September 30, 2025, Rs 4.44 crore in FY25, Rs 3.60 crore in FY24, and Rs 2.58 crore in FY23. In this case, the negative cash flows were due to investment in the purchase of plant and machinery during this period.

As of September 30, 2025, the company had outstanding financial indebtedness of Rs 19.21 crore. Failure to service or repay these loans could harm the company’s operations and financial position.