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| Product | Quantum (Rs. Cr) | Long Term Rating | Short Term Rating |
| Bank Loan Ratings | 22.42 | ACUITE BBB- | Stable | Reaffirmed | - |
| Bank Loan Ratings | 4.82 | - | ACUITE A3 | Reaffirmed |
| Total Outstanding | 27.24 | - | - |
| Total Withdrawn | 0.00 | - | - |
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Rating Rationale |
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Acuite has reaffirmed its long-term rating of ‘ACUITE BBB-' (read as ACUITE triple B minus) and short-term rating of ‘ACUITE A3’ (read as ACUITE A three) on Rs.27.24 Cr. bank facilities of Oriental Engineering Works Private Limited (OEWPL). The outlook remains 'Stable'.
Rationale for Rating The rating indicates a small but stable business risk profile for the company, resulting in stagnation in both revenue and operating margin in FY24. However, there has been a decrease in the PAT margin during the same period due to an increase in tax provisions, whereas the previous year benefitted from a write-back of provisions for prior period taxes. The financial risk profile remains healthy, characterized by moderate net worth and comfortable capital structure and debt protection metrics. The liquidity position is adequate, supported by sufficient accruals for debt repayment, the infusion of unsecured loans, moderate current ratio, low utilization of bank limits, and the absence of debt-funded capital expenditure plans. The rating benefits from the company's experienced management and its long-standing relationships with suppliers and customers. However, these strengths are offset by an intensive but improving working capital cycle that will remain a key monitorable.
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| About the Company |
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Oriental Engineering Works Private Limited (OEWPL) was incorporated in 1933 as Karma Engineers in Lahore – India (undivided). The company is into the manufacturing of hydraulic jacks, cylinders, pumps, power packs among others for automobile, construction, power, steel and mining industries via the manufacturing facilities located in Yamuna Nagar (Haryana). Present directors of the company are Mr. Raman Saluja, Mr. Satish Chander Saluja, Ms. Gayatri Saluja, Ms. Divya Khanna, Ms. Samira Saluja and Mr. Shivam Saluja.
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| Unsupported Rating |
| Not Applicable |
| Analytical Approach |
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Acuité has considered the standalone view of the business and financial risk profile of OEWPL to arrive at the rating.
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| Key Rating Drivers |
| Strengths |
| Established track record of operations supported by experienced promoters
The management brings decades of experience, and the company has a strong presence in Haryana with over ninety years of operation. The company exports to UAE, US, Germany, and Netherlands. and imports from China and Germany. This extensive track record has fostered healthy long-standing relationships with customers and suppliers. Acuité believes that OEWPL will benefit from its established industry position, diversified geographical presence and the promoter's experience to scale operations through different industries. Steady scale of operations The revenue of OEWPL stood at Rs.65.66 Cr. in FY24 as against Rs.64.54 Cr. in FY2023. Further the company has achieved ~Rs.72.00 Cr. in FY25. The revenue was stagnant due to impact of Russia-Ukraine war which has affected the demand in European markets. The unexecuted order book stood at ~Rs.12.00 Cr. as of March 2025 which will be executed within 2 months and orders being added regularly. The operating margin of the company stood at 10.63% in FY24 as against 10.50% in FY2023. The increase in margin was due to decrease in expenses like gratuity to director (onetime adjustment in FY23) and other manufacturing costs. The company installed a rooftop solar power plant with a capacity of 225 KW in FY24 to reduce power cost. The company's PAT margin was 4.70 percent in FY24, compared to 6.16 percent in FY2023, when the previous year was positively impacted by a write-back of provisions for prior period taxes. Acuite believes that the scale of operations will improve over the medium term backed by order flow. Healthy Financial Risk Profile The company has healthy financial risk profile marked by moderate net worth, gearing below unity and comfortable debt protection metrics. The Total Tangible net worth stood at Rs.26.63 Cr. as on 31st March 2024 as against Rs. 24.00 Cr. as on 31st March 2023 due to small accretion of reserves. The gearing stood at 0.43 times as on March 31, 2024, as against 0.45 times as on March 31, 2023. Interest coverage ratio stood at 6.75 times and debt service coverage ratio stood at 2.56 times as on March 31, 2024. The TOL/TNW stood at 0.78 times in FY24 as against 1.08 times in FY23. Acuite believes that the financial risk profile is expected to improve in near to medium terms in the absence of debt funded capex plans. |
| Weaknesses |
| Intensive working capital cycle
The company has intensive working capital cycle as evident from gross current assets (GCA) of 177 days in FY24 as against 194 days in FY23 on account of debtor and inventory days. Debtor days stood at 98 days in FY24 as against 116 days in FY23, with average credit terms being around 60 days based on the relationship with them. The company also requires a 20% advance payment and delivers the supplies only after receiving full payment once the billing is done. The Inventory days stood at 60 days in FY2024 as against 67 days in FY2023. The company hold more of raw materials to accommodate any changes in production plans. Against this, creditor days stood at 42 days in FY24 as against 111 days in FY23. The reduction in creditor days is due to Section 15 of MSMED Act, 2006,that mandates payment to suppliers within 45 days. Acuite believes that the working capital cycle will remain on similar levels over the medium term. |
| Rating Sensitivities |
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| Liquidity Position |
| Adequate |
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The company has adequate liquidity marked by net cash accruals of Rs.4.86 Cr. against debt repayment of Rs.1.26 Cr. over the same period. The current ratio stood at 2.40 times in FY24 as against 1.80 times in FY23. The cash and bank balances stood at Rs.2.19 Cr. in FY24 as against Rs.1.34 Cr. in FY23. The unsecured loans stood at Rs.6.14 Cr. in FY24 as against Rs.5.62 Cr. in FY23. The promoters infuse funds in the business as and when required and are interest bearing. The bank limit utilization for fund based limits was utilized at ~36% per cent during the last six months ended March 2025. Acuite believes that liquidity position is expected to remain at adequate levels over the medium term.
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| Outlook: Stable |
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| Other Factors affecting Rating |
| None |
| Particulars | Unit | FY 24 (Actual) | FY 23 (Actual) |
| Operating Income | Rs. Cr. | 65.66 | 64.54 |
| PAT | Rs. Cr. | 3.09 | 3.97 |
| PAT Margin | (%) | 4.70 | 6.16 |
| Total Debt/Tangible Net Worth | Times | 0.43 | 0.45 |
| PBDIT/Interest | Times | 6.75 | 7.10 |
| Status of non-cooperation with previous CRA (if applicable) |
| Not Applicable |
| Interaction with Audit Committee anytime in the last 12 months (applicable for rated-listed / proposed to be listed debt securities being reviewed by Acuite) |
| Not applicable |
| Any other information |
| None |
| Applicable Criteria |
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• Default Recognition :- https://www.acuite.in/view-rating-criteria-52.htm • Manufacturing Entities: https://www.acuite.in/view-rating-criteria-59.htm • Application Of Financial Ratios And Adjustments: https://www.acuite.in/view-rating-criteria-53.htm |
| Note on complexity levels of the rated instrument |
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