­Experienced management and long track record of operations
Shakti Insulated Wires Private Limited(SIWPL) was incorporated in 1962 and is engaged in manufacturing of paper-covered rectangular and round copper wires used in power and distribution transformers. The promoters have an extensive experience of more than six decades in the said line of business. The directors are involved in day-to-day operations of the company and are ably supported by a strong line of mid-level managers. The long experience of the directors has helped the company to make healthy relationships with the customers and export to countries like Kuwait & Dubai etc.
Acuité believes the experience of the directors and the long track record of operations will help the Group in maintaining their business risk profile over the medium term.

Efficient working capital operations
The working capital operations of the company is efficient in nature, with Gross Current Assets (GCA) of 48 days in FY2025, compared to 53 days in FY2024 driven by improved debtor days. The debtor days stood at 19 days in FY2025 as compared against 27 days in FY2024. The company receives payments from customer within average 40–45 days. The creditor days stood at 28 days in FY2025 as against 40 days in FY2024. The inventory levels stood at 19 days in FY2025 as compared against 18 days in FY2024
Acuite believes that working capital operations of the company will continue to remain in similar range over medium term considering the nature of business.

­Deterioration in revenue performance albeit marginal improvement in profitability
The company’s revenue declined and stood at Rs. 90.76 Cr in FY2025 from Rs. 99.27 Cr in FY2024. This decline was due to company’s focused was on debt reduction along with disturbance in international market regarding geopolitical instances. The company majorly export to two countries i.e Dubai and Kuwait etc. The operating margin of the company improved marginally to 5.42 percent in FY2025 as against 5.18 percent in FY2024. This is due to slight reduction in operating expenses. The net profit margin of the company remained at negative 1.22 percent in FY2025 as against negative 2.40 percent in FY2024 on account of lower interest cost during the year.
The company continues to have a negative PAT margin as marked by the PAT margin of negative 1.22 percent for FY2025 as against negative 2.40 percent for FY2024. Acuité believes that the ability of the company to improve the margins will remain a key rating sensitivity in medium term.

Below Average financial risk profile
The Financial risk profile of company is marked by negative net worth, below average gearing and debt protection metrics. The net worth of the company stood negative at Rs. 40.89 Cr as on 31 March 2025 as against Rs. 39.78 Cr as on 31 March 2024 on account of low accretion to reserves. The gearing (debt-equity) stood at negative 1.31 times as on 31 March, 2025 as against negative 1.31 times as on 31 March 2024. The total debt of Rs.53.74 Cr consists of Rs. 7.47 Cr of short-term debt, Rs.46.24 Cr of unsecured loan from directors, Rs.0.03 Cr of current maturities of long-term debt. The TOL/TNW stood negative at 1.65 times as on 31 March 2025 as against negative 1.74 times as on 31 March 2024. The interest coverage ratio and DSCR stood lower at 0.97 times and 0.55 times for FY2025 as against 0.79 times and 0.51 times for FY2024. The Net Cash Accruals to Total debt stood at negative of 0.00 times for FY2025.