Press Release June 26, 2025 BRD CAR WORLD LIMITED Rating Assigned and Reaffirmed

Product	Quantum (Rs. Cr)	Long Term Rating	Short Term Rating
Bank Loan Ratings	10.00	ACUITE BBB- | Negative | Assigned	-
Bank Loan Ratings	51.50	ACUITE BBB- | Negative | Reaffirmed | Stable to Negative	-
Bank Loan Ratings	1.00	-	ACUITE A3 | Reaffirmed
Total Outstanding	62.50	-	-
Total Withdrawn	0.00	-	-

Rating Rationale

­Acuité has reaffirmed the long-term rating of ‘ACUITE BBB-’ (read as ACUITE Triple B minus) and the short-term rating of 'ACUITE A3' (read as ACUITE A three) on Rs.52.50 Cr. bank facilities of BRD Car World Limited (BRDCWL). The outlook is revised from 'Stable' to 'Negative'. Further, Acuité has assigned the long-term rating of ‘ACUITE BBB-’ (read as ACUITE Triple B minus) on Rs.10.00 Cr. bank facility of BRD Car World Limited (BRDCWL). The outlook is 'Negative'. Rationale for rating The outlook is revised from ‘Stable’ to ‘Negative’ on account of lower operating and profitability margins in FY25 (Prov.) as compared to previous year due to significant increase in sales expenses owing to stiff competition. The revision also considers high utilization of its working capital limits. Further, the rating reaffirmation takes into account the established track record of the company as reflected by stable growth in the operating income along with adequate liquidity position. However, the rating is constrained by moderate financial risk profile and moderate working capital operations.

About the Company

Incorporated in 2008, BRD Car World Limited (BRDCWL) is a Kerala-based authorised dealer for vehicles of Maruti Suzuki India Limited (MSIL) operating in 3 districts of Kerala- Thrissur, Ernakulam and Palakkad with 13 Arena Sales outlets, 13 Service outlets, 2 True Value showrooms, 1 Maruti Driving School, 2 NEXA Showroom, and 1 Commercial Vehicle showroom. The company deals in sales of new cars, pre-owned cars and body works services. The company is promoted by Mr. C. C. William Verghese, Mr. C. C. Simon, Late Mr. K. C. Seemon and Mr. Shibu Job Cheeraan and is currently led by Mr. C. C. Simon and Jijin. C. Surendran.

Unsupported Rating

­Not Applicable

Analytical Approach

­­For arriving at its rating, Acuité has considered the standalone business and financial risk profile of BRDCWL.

Key Rating Drivers

Strengths

Established track record and experienced management BRDCWL is part of the BRD Group of Companies that is engaged in chit funds, hire purchase, asset financing, vehicle sales and industrial training. The company benefits from its experienced management with directors having around four decades of experience in the automobile dealership business. Growing scale of operations The revenue of the company improved at Rs.382.31 Cr. in FY25(Prov.) against Rs.367.34 Cr. in FY24 owing to increase in sales volume. These are supported by increasing investments in outlets, inauguration of one new showroom in FY24 and three showrooms in FY25. The company makes ~70-75 percent of its income from the sale of cars and the rest through sales of pre-owned cars, body works and also through the driving school.

Weaknesses

Moderate financial risk profile The company has moderate financial risk profile marked by marginal improvement in tangible net worth and moderate debt protection metrics and gearing ratios. The gearing level of the company increased to 1.26 times as on 31st March, 2025 (Prov.) as against 1.19 times as on 31st March, 2024 because of increase in working capital borrowings. Further, the coverage ratios also moderated with Interest Coverage Ratio (ICR) of 1.65 times for FY25(Prov.) against 2.58 times for FY24 and Debt Service Coverage Ratio (DSCR) of 1.27 times for FY25(Prov.) against 1.83 times for FY24. Further, in FY26 the company has availed a long-term borrowings of Rs.5.00 Cr. for its new showroom. Moderate working capital management The working capital management of the company is moderately intensive marked by gross current assets (GCA) of 89 days as on 31st March, 2025 (Prov.) (77 days as on 31st March 2024). This includes  inventory days which stood moderately high at 64 days in FY25(Prov.) against 54 days in FY24 on account of lower sales of new cars in certain months and for the newly inaugurated showroom. Moreover, the debtor days stood low as, ~55 percent of the cars are sold through vehicle loans/new car finance, the amount from the same is receivable within 3-4 days from the bank and the remaining through customer’s own funds. Stiff competition from other dealers and brands MSIL's focus on expanding its dealership network is expected to increase competition among its own dealers. Further, the company is also exposed to intense competition from other automobile companies such as Honda, Tata Motors, Hyundai, Mahindra and Kia to name a few. This stiff competition has impacted the operating margin of company in FY25 reducing it to 1.29 percent as against 2.71 percent in FY24. Moreover, the rating is constrained by the inherent cyclicality in the automobile sector and outlook for passenger cars.

Rating Sensitivities

Growing scale of operations along with improvement in profitability margins. Further deterioration in financial risk profile. Significant stretch in the working capital utilizations affecting the liquidity.

Liquidity Position

Adequate

The company has an adequate liquidity position marked by net cash accruals of Rs.3.73 Cr. as against its maturing debt obligations of Rs.1.71 Cr. in FY2025. The cash accruals of the company are estimated to have remained around Rs.3.50-4.50 Cr. during 2025-26. Going forward, the cash accruals are expected to remain in the range of Rs.3.50-4.50 Cr. during 2025-26. However, the average bank limit utilization for the fund based limits stood high at ~97 percent for the last seven months ended April 2025. Furthermore, the company maintained an unencumbered cash and bank balances of Rs.2.50 Cr. as on 31st March, 2025 (Prov.) and current ratio stood low at 0.90 times as on March 31, 2025 (Prov.).

Outlook: Negative

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Other Factors affecting Rating

­None.

Key Financials

Particulars	Unit	FY 25 (Provisional)	FY 24 (Actual)
Operating Income	Rs. Cr.	382.31	367.34
PAT	Rs. Cr.	0.73	4.47
PAT Margin	(%)	0.19	1.22
Total Debt/Tangible Net Worth	Times	1.26	1.19
PBDIT/Interest	Times	1.65	2.58

Status of non-cooperation with previous CRA (if applicable)

­Not Applicable.

Any other information

­None.

Applicable Criteria

• Default Recognition :- https://www.acuite.in/view-rating-criteria-52.htm • Application Of Financial Ratios And Adjustments: https://www.acuite.in/view-rating-criteria-53.htm • Trading Entities: https://www.acuite.in/view-rating-criteria-61.htm

Note on complexity levels of the rated instrument

­In order to inform the investors about complexity of instruments, Acuité has categorized such instruments in three levels: Simple, Complex and Highly Complex. Acuite’s categorisation of the instruments across the three categories is based on factors like variability of the returns to the investors, uncertainty in cash flow patterns, number of counterparties and general understanding of the instrument by the market. It has to be understood that complexity is different from credit risk and even an instrument categorized as 'Simple' can carry high levels of risk. For more details, please refer Rating Criteria “Complexity Level Of Financial Instruments” on www.acuite.in.

Rating History

Date Name of Instruments/Facilities Term Amount (Rs. Cr) Rating/Outlook 02 Jan 2025 Bank Guarantee (BLR) Short Term 1.00 ACUITE A3 (Assigned) Proposed Long Term Bank Facility Long Term 4.00 ACUITE BBB- | Stable (Reaffirmed) Cash Credit Long Term 30.00 ACUITE BBB- | Stable (Reaffirmed) Cash Credit Long Term 8.00 ACUITE BBB- | Stable (Reaffirmed) Term Loan Long Term 9.50 ACUITE BBB- | Stable (Reaffirmed) 12 Dec 2024 Cash Credit Long Term 25.50 ACUITE BBB- | Stable (Upgraded from ACUITE BB) Cash Credit Long Term 4.50 ACUITE BBB- | Stable (Assigned) Proposed Long Term Bank Facility Long Term 4.00 ACUITE BBB- | Stable (Upgraded from ACUITE BB) Cash Credit Long Term 8.00 ACUITE BBB- | Stable (Upgraded from ACUITE BB) Term Loan Long Term 9.50 ACUITE BBB- | Stable (Upgraded from ACUITE BB) 30 Oct 2023 Cash Credit Long Term 25.00 ACUITE BB (Reaffirmed & Issuer not co-operating*) Proposed Long Term Bank Facility Long Term 11.99 ACUITE BB (Reaffirmed & Issuer not co-operating*) Cash Credit Long Term 8.00 ACUITE BB (Reaffirmed & Issuer not co-operating*) Term Loan Long Term 2.01 ACUITE BB (Reaffirmed & Issuer not co-operating*) 17 Aug 2022 Cash Credit Long Term 25.00 ACUITE BB (Downgraded & Issuer not co-operating* from ACUITE BB+) Proposed Long Term Bank Facility Long Term 11.99 ACUITE BB (Downgraded & Issuer not co-operating* from ACUITE BB+) Cash Credit Long Term 8.00 ACUITE BB (Downgraded & Issuer not co-operating* from ACUITE BB+) Term Loan Long Term 2.01 ACUITE BB (Downgraded & Issuer not co-operating* from ACUITE BB+)

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Annexure - Details of instruments rated

Lender’s Name ISIN Facilities Date Of Issuance Coupon Rate Maturity Date Quantum (Rs. Cr.) Complexity Level Rating Axis Bank Not avl. / Not appl. Bank Guarantee (BLR) Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 1.00 Simple ACUITE A3 | Reaffirmed State Bank of India Not avl. / Not appl. Cash Credit Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 30.00 Simple ACUITE BBB- | Negative | Reaffirmed | Stable to Negative Axis Bank Not avl. / Not appl. Cash Credit Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 8.00 Simple ACUITE BBB- | Negative | Reaffirmed | Stable to Negative State Bank of India Not avl. / Not appl. Cash Credit Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 5.00 Simple ACUITE BBB- | Negative | Assigned Not Applicable Not avl. / Not appl. Proposed Long Term Bank Facility Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 5.07 Simple ACUITE BBB- | Negative | Reaffirmed | Stable to Negative Axis Bank Not avl. / Not appl. Term Loan 27 Mar 2023 Not avl. / Not appl. 20 Mar 2030 8.43 Simple ACUITE BBB- | Negative | Reaffirmed | Stable to Negative Axis Bank Not avl. / Not appl. Term Loan 31 Mar 2025 Not avl. / Not appl. 30 Apr 2032 5.00 Simple ACUITE BBB- | Negative | Assigned

Contacts

Mohit Jain Chief Analytical Officer - Rating Operations Dhruvi Chauhan Associate Analyst - Rating Operations	Contact details exclusively for investors and lenders Mob: +91 8591310146 Email ID: analyticalsupport@acuite.in

About Acuité Ratings & Research

Acuité is a full-service Credit Rating Agency registered with the Securities & Exchange Board of India (SEBI). The company received RBI Accreditation as an External Credit Assessment Institution (ECAI) for Bank Loan Ratings under BASEL-II norms in the year 2012. Acuité has assigned ratings to various securities, debt instruments and bank facilities of entities spread across the country and across a wide cross section of industries. It has its Registered and Head Office in Kanjurmarg, Mumbai. Disclaimer: An Acuité rating does not constitute an audit of the rated entity and should not be treated as a recommendation or opinion that is intended to substitute for a financial adviser's or investor's independent assessment of whether to buy, sell or hold any security. Ratings assigned by Acuité are based on the data and information provided by the issuer and obtained from other reliable sources. Although reasonable care has been taken to ensure that the data and information is true, Acuité, in particular, makes no representation or warranty, expressed or implied with respect to the adequacy, accuracy or completeness of the information relied upon. Acuité is not responsible for any errors or omissions and especially states that it has no financial liability whatsoever for any direct, indirect or consequential loss of any kind, arising from the use of its ratings. Ratings assigned by Acuité are subject to a process of surveillance which may lead to a revision in ratings as and when the circumstances so warrant. Please visit our website (www.acuite.in) for the latest information on any instrument rated by Acuité. Please visit https://www.acuite.in/faqs.htm to refer FAQs on Credit Rating. Note: None of the Directors on the Board of Acuité Ratings & Research Limited are members of any rating committee and therefore do not participate in discussions regarding the rating of any entity.