|
|
| Product | Quantum (Rs. Cr) | Long Term Rating | Short Term Rating |
| Bank Loan Ratings | 71.99 | ACUITE BBB- | Stable | Reaffirmed | - |
| Bank Loan Ratings | 0.01 | - | ACUITE A3 | Reaffirmed |
| Total Outstanding | 72.00 | - | - |
| Total Withdrawn | 0.00 | - | - |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 the Rs.72.00 Cr. bank facilities of EGearz Private Limited (EGPL). The outlook is ‘Stable’.
Rationale for rating The rating reaffirmation takes into account improved scale of operations in FY25 & 9MFY26, backed by sustained demand and the manufacturing efficiency through better technology adaptation. Further, the rating also considers experienced management, moderate financial risk profile and adequate liquidity position. However, these strengths are partially offset by moderately intensive working capital operations and cyclical nature of automobile industry. |
| About the Company |
|
Incorporated in 2019, EGearz Private Limited (EGPL) is a Maharashtra based company engaged into manufacturing of auto ancillary parts and components having wide use in the automotive industry. EGPL is a group company of Speciality Sintered Products Private Limited (SSPL). The manufacturing plant is located at Shirwal in Maharashtra having installed capacity of 4500 MT as of December 2025. EGPL had also applied for R&D certification which was received in July 2025 and now has an in-house R&D lab. The directors of EGPL are Mrs. Sonal Narkhede, Mr. Niranjan Narkhede and Mr. Vijay Kulkarni.
|
| Unsupported Rating |
| Not applicable. |
| Analytical Approach |
| Acuité has considered the standalone business and financial risk profile of EGPL to arrive at the rating. |
| Key Rating Drivers |
| Strengths |
| Experienced management
EGPL is promoted by Mr. Niranjan Narkhede & his wife Mrs. Sonal N. Narkhede. The promoters have an experience of more than two decades in the field of technology and are being supported by its team of experienced professionals in managing day to day operations of EGPL. The extensive experience of the promoters has enabled EGPL to establish a healthy relationship with its customers and suppliers. Acuité believes that EGPL will continue to benefit from its experienced management. Improved scale of operations EGPL reported increase in its revenue to Rs.207.47 Cr. in FY25 against Rs.141.59 Cr. in FY24 (Rs.100.26 Cr. in FY23). The improvement is based on the increase in the demand for its products i.e. sintered parts used in the various electrical and hybrid vehicles across the domestic market as well as export market. EGPL has its presence of selling sintered parts in domestic market in states like Maharashtra, Gujarat, Haryana, Tamil Nadu & Uttar Pradesh whereas in exports it has majority of the presence in Canada. Exports remained in the range of 28-30 percent during FY25 and FY24. Apart from this, EGPL also exported some transmission components used in cars in FY26. Further, the top line for 9MFY26 stood at ~Rs.184 Cr. The current order book stands at ~Rs.58 Cr. as of December 2025 which is to be completed till March 2026. Moreover, operating and profitability margins also stood improved at 13.23% in FY25 and 6.71% in FY25 respectively. Moderate Financial Risk Profile The financial risk profile stood moderate marked by improved net worth, moderate gearing and comfortable debt protection metrics. The tangible net worth stood improved at Rs.46.03 Cr. as on 31st March 2025 as against Rs.31.21 Cr. as on 31st March, 2024 on account of profit accretion. Further, quasi equity of Rs.7.23 Cr has been considered basis the undertaking from promoter. The total debt for FY25 stood increased at Rs.75.39 Cr. on account of capex to set up a robotic automation process and line driven manufacturing system at a total cost of ~Rs.15 Cr. which was funded 60% through bank borrowings and balance through internal accruals. In addition, EGPL has also set up a sintering furnace which will be operational in the current year. However, the gearing (debt-equity) stood slightly improved at 1.64 times as on 31st March, 2025 (1.84 times as on 31st March, 2024). Moreover, the debt protection metrics also stood comfortable with interest coverage ratio and debt service coverage ratio of 5.81 times and 2.03 times during FY25 respectively. Debt/EBITDA also stood improved at 2.70 times as on 31st March, 2025 (3.07 times as on 31st March, 2024). Going forward the financial risk profile is expected to remain in similar lines backed by steady accruals. |
| Weaknesses |
| Moderately intensive working capital operations
The working capital operations of EGPL is moderately intensive in nature marked by its increased gross current assets of 137 days in FY25 against 123 days for FY24. This is on account of its increased receivable days, which stood at 85 days in FY25 (63 days in FY24). The usual receivable mechanism is of 45-60 days in the domestic market and 90-120 days in the export market on delivery at place terms. Further, the inventory days moderated to 48 days in FY25 (65 days in FY24) with creditors cycle of 111 days in FY25 (108 days for FY24). Cyclicality and competition associated with automotive component industry The auto component is highly cyclical in nature with growth linked to overall growth in the economy and consumption. Acuité believes that EGPL’s revenues to be exposed and tied to cyclical demand prospects of the automobile industry and the presence of other players which leads to increased competition. |
| Rating Sensitivities |
|
| Liquidity Position |
| Adequate |
|
Liquidity position of EGPL is adequate as reflected from sufficient Net cash accruals (NCA) Rs.20.20 Cr. in FY25 against the maturing debt repayment obligations. of Rs.7.54 Cr. Additionally, the company is expected to generate cash accruals in the range of Rs.22.00-26.00 Cr. over the medium-term repayment obligations in the range of Rs.10.00-12.00 Cr. Moreover, the company’s reliance on working capital limits stood high at nearly 88% for the last 6 months ended January 2026. The current ratio stood low at 0.98 times during FY25, and the unencumbered cash and bank balance stood at Rs.0.34 Cr. in FY25.
|
| Outlook: Stable |
| |
| Other Factors affecting Rating |
| None. |
| Particulars | Unit | FY 25 (Actual) | FY 24 (Actual) |
| Operating Income | Rs. Cr. | 207.47 | 141.59 |
| PAT | Rs. Cr. | 13.91 | 8.15 |
| PAT Margin | (%) | 6.71 | 5.75 |
| Total Debt/Tangible Net Worth | Times | 1.64 | 1.84 |
| PBDIT/Interest | Times | 5.81 | 4.92 |
| 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 • 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 |
|
| |
|
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
Contacts |
About Acuité Ratings & Research |
