Product Quantum (Rs. Cr) Long Term Rating Short Term Rating
Bank Loan Ratings 16.86 ACUITE BBB | Stable | Upgraded -
Bank Loan Ratings 17.62 - ACUITE A3+ | Upgraded
Total Outstanding 34.48 - -
Total Withdrawn 0.00 - -
 
Rating Rationale

Acuité has upgraded its long-term rating to ‘ACUITE BBB’ (read as ACUITE triple B) from ‘ACUITE BBB-’ (read as ACUITE triple B Minus) and the short term rating to ‘ACUITE A3+’ (read as ACUITE A three plus) from ‘ACUITE A3’ (read as ACUITE A three) on the Rs. 34.48 crore bank facilities of Permanent Magnets Limited (PML). The outlook is 'Stable'.

Rational for rating upgrade

The rating upgrade factors in the group’s stable business risk profile which is expected to strengthen further with augmentation in capacity utilisations and addition of new capacities facilitating diversification in product mix. The rating also factors in group’s sustained healthy financial risk profile, supported by a strong net worth base, low gearing and comfortable debt protection metrics. The rating also reflects the group’s long standing operational track record and experienced management. However, the rating remains constrained by the group’s working capital-intensive operations and susceptibility of profitability to volatility in raw material prices in a highly competitive and fragmented industry.


About the Company

Mumbai based, Permanent Magnets Limited (PML) was incorporated in the year 1960, by Mr. Kantilal Morarji Desai, which was sold off to Taparia Group in the year 1965. It is the flagship company of the Group. PML is engaged in manufacturing of Alnico (Aluminium, Nickel and Cobalt) Magnets & Magnetic assemblies, parts and accessories of Electricity Meters, Gas Meters and Electrical vehicles. The company has its manufacturing facility at Mira road, Mumbai and is currently promoted and managed by Taparia family.

 
About the Group

Quantum Magnetics Private Limited (QMPL)
Incorporated on May 31, 2023, Quantum Magnetics Private Limited is a wholly owned subsidiary of Permanent Magnets Limited (PML). The company is engaged in the manufacture of neodymium magnets and magnet assemblies in India. The directors include Mr. Sharad Taparia and Mr. Mukul Taparia.

 
Unsupported Rating

Not Applicable

 
Analytical Approach

Extent of Consolidation
•Full Consolidation
Rationale for Consolidation or Parent / Group / Govt. Support

­Acuité has considered the consolidated business and financial risk profiles of Permanent Magnets Limited (PML) and Quantum Magnetics Private Limited (QMPL) to arrive at this rating. The consolidation is in the view of QMPL being wholly owned subsidiary of PML, similar line of business, operational synergies and common management.

Key Rating Drivers

Strengths

Experienced management and established track record of operations
PML, operational since 1960, has built a strong and long-standing presence in both domestic and international markets, including the USA, Europe and Brazil. The promoter, Mr. Sharad Taparia, Managing Director, brings nearly 27 years of experience in the magnet industry and is supported by a well-qualified and experienced second line of management, which enhances the group’s operational robustness. The management’s extensive industry experience has enabled PML to sustain long-standing relationships with key customers and suppliers, several of whom it has been associated with for more than two to three decades. The growth prospects are expected to strengthen further with anticipated improvement in trade conditions following the conclusion of the US–India Trade Agreement, which is likely to support export opportunities for the group. Additionally, the recently concluded capex is expected to translate into revenue growth as new capacities ramp up. The rising manufacturing and sale of electric vehicles in India and major global markets is also expected to augment demand for the group’s product portfolio, thereby improving medium-term business prospects.

Acuite believes that the group’s experienced management, established operational track record and favourable industry dynamics will continue to support its business risk profile over the medium term.

Stable business risk profile driven by ongoing capacity augmentation and diversified product mix
The group’s revenue remained rangebound at Rs. 205.38 crore in FY25, compared to Rs. 202.01 crore in FY24. This was due to the stagnation in the smart meter segment, arising from slower-than-anticipated order inflow from key customers, along with a shift in product mix within the electric vehicles segment. However, in 9MFY26, the group reported revenue of Rs. 158.73 crore as against Rs. 152.62 crore in 9MFY25. The group further expects its topline to increase by around 8 to 10 per cent in FY26. From FY27 onwards, revenue and overall profitability are expected to improve with the full operationalisation of the capex undertaken during FY25 and FY26. With new capacity added for automotive parts and the alloys segment operating at around 34 per cent utilisation in 6MFY26, the group is positioned for improved revenue performance. Incremental growth is expected to be supported by higher automotive parts contribution and strengthening demand in the alloys segment. Furthermore, the introduction of latching relays in the smart meter segment is expected to support improvement in operating margins, as these are higher value products compared to shunts and current transformers. The group’s operating profit margin moderated to 15.78 per cent in FY25 from 18.33 per cent in FY24 due to higher raw material costs and increased operating expenses. The net profit margin also declined to 7.67 per cent in FY25 from 10 per cent in FY24, primarily on account of higher depreciation costs incurred during FY25.

Acuite believes that the group’s revenues are likely to improve in the near to medium term, with profitability expected to gradually improve on the back of ongoing capacity augmentation and the product mix shifts toward better margin offerings.

Healthy financial risk profile
The financial risk profile of the group remains healthy, supported by a healthy net worth base, comfortable debt protection metrics and low gearing. The group’s net worth stood at Rs. 143.83 crore as on 31 March 2025, an increase from Rs. 129.67 crore as on 31 March 2024, on account of profit accretion to reserves. The group continues to follow a conservative leverage policy, reflected in its gearing of 0.17 times as on 31 March 2025 as against 0.19 times in the previous year. The total debt of Rs. 23.82 crore as on FY2025 comprises Rs. 16.57 crore of long-term borrowings, Rs. 1.10 crore of short-term debt and Rs. 6.15 crore of maturing obligations. The Total Outside Liabilities to Tangible Net Worth (TOL/TNW) ratio remained low at 0.33 times in FY2025, improving from 0.46 times in FY2024. The Debt/EBITDA ratio stood at 0.69 times as on 31 March 2025 compared with 0.63 times a year earlier. Debt protection indicators remain comfortable, with an interest coverage ratio of 14.14 times in FY2025. The debt service coverage ratio stood at 4.39 times in FY2025 as against 7.67 times in FY2024. The group undertook sizeable capex in FY25 and FY26 to support capacity expansion and business diversification. In FY25, it incurred Rs. 26.55 crore, including Rs. 17.50 crore for land funded through internal accruals and the balance for machinery financed by term loan. In FY26, it invested Rs. 3 crore in the latching relays segment, with an additional Rs. 5–7 crore planned, and Rs. 12–13 crore for upgrading the vacuum induction melting furnace, fully funded through internal accruals. These expansion initiatives are expected to enhance capacity, improve operational efficiency and further support the sustenance of its healthy financial risk profile.

Acuite believes that the financial risk profile of the group will continue to remain healthy on the back of steady accruals despite debt funded capex.


Weaknesses

Working capital intensive operations
The working capital operations of the group remain intensive, reflected in its high Gross Current Assets (GCA) of 196 days as on 31 March 2025, similar to the previous year. The elevated GCA continues to be driven primarily by higher inventory levels. Inventory days stood at 114 days in FY25 as against 121 days in FY24, with the group’s average inventory holding typically ranging between 130–150 days. Debtor days stood rangebound at 73 days as on 31 March 2025 compared with 75 days as on 31 March 2024. The group generally extends a credit period of 60– 90 days to its customers. Creditor days stood at 68 days in FY25 as against 87 days in FY24. The company is required to make advance payments to certain domestic suppliers, while for others, the credit period ranges from 60–90 days. For imports, payments are routed through letters of credit (LCs) with a tenure of up to 180 days. However, the average utilisation of fund-based working capital limits remained low at ~6.20 per cent, while utilisation of non-fund-based limits stood at ~36.41 per cent for the six months ended December 2025.

Acuite believes that the ability of the group towards improving its working capital cycle in near to medium term will remain a key rating monitorable.

Susceptibility of profitability to volatility in raw material prices in a highly competitive and fragmented Industry
The company operates in a highly competitive and fragmented industry, facing intense competition from both organised and unorganised players. PML is also exposed to volatility in raw material prices, which can weigh on its operating margins. In addition, fluctuations in foreign exchange rates pose a risk to profitability; however, the presence of a natural hedge provides partial mitigation against forex-related exposures.

Rating Sensitivities
  • Sustain improvement in revenues and profitability
  • Timely completion of capex without cost and time overrun
  • Elongation of working capital cycle
  • Deterioration in financial risk profile owing to higher than expected debt funded capex
 
Liquidity Position
Adequate

PML’s liquidity position remains adequate, supported by sufficient net cash accruals to meet its maturing debt obligations. The group generated net cash accruals of Rs. 27.18 crore in FY25 against maturing repayment obligations of Rs. 4.33 crore for the same period. Going forward, net cash accruals are expected to remain in the range of Rs. 29–33 crore, compared with maturing debt obligations of Rs. 6.50– 6.90 crore. As on 31 March 2025, the company maintained unencumbered cash and bank balances of Rs. 4.89 crore, while the current ratio stood strong at 3.66 times. However, the group’s liquidity position remains partly influenced by its working capital-intensive operations, as indicated by Gross Current Assets (GCA) of 196 days as on 31 March 2025 and 31 March 2024. The average utilisation of fund-based working capital limits remained low at ~6.20 per cent, while utilisation of non-fund-based limits stood at ~36.41 per cent for the six months ended December 2025.

 
Outlook: Stable
­
 
Other Factors affecting Rating

None

 

Particulars Unit FY 25 (Actual) FY 24 (Actual)
Operating Income Rs. Cr. 205.38 202.01
PAT Rs. Cr. 15.75 20.20
PAT Margin (%) 7.67 10.00
Total Debt/Tangible Net Worth Times 0.17 0.19
PBDIT/Interest Times 14.14 16.65
Status of non-cooperation with previous CRA (if applicable)

­Not Applicable

 
Any Other Information

None

 
Applicable Criteria
• Application Of Financial Ratios And Adjustments: https://www.acuite.in/view-rating-criteria-53.htm
• Consolidation Of Companies: https://www.acuite.in/view-rating-criteria-60.htm
• Default Recognition: https://www.acuite.in/view-rating-criteria-52.htm
• Manufacturing Entities: https://www.acuite.in/view-rating-criteria-59.htm

Note on complexity levels of the rated instrument

Date Name of Instruments/Facilities Term Amount (Rs. Cr) Rating/Outlook
22 Nov 2024 Proposed Short Term Bank Facility Short Term 2.22 ACUITE A3 (Reaffirmed)
Letter of Credit Short Term 11.40 ACUITE A3 (Reaffirmed)
Letter of Credit Short Term 4.00 ACUITE A3 (Reaffirmed)
Cash Credit Long Term 4.68 ACUITE BBB- | Stable (Reaffirmed)
Cash Credit Long Term 3.82 ACUITE BBB- | Stable (Reaffirmed)
Proposed Long Term Bank Facility Long Term 1.86 ACUITE BBB- | Stable (Reaffirmed)
Term Loan Long Term 6.50 ACUITE BBB- | Stable (Reaffirmed)
16 Apr 2024 Letter of Credit Short Term 4.00 ACUITE A3 (Upgraded from ACUITE A4+)
Proposed Short Term Bank Facility Short Term 2.22 ACUITE A3 (Upgraded from ACUITE A4+)
Letter of Credit Short Term 11.40 ACUITE A3 (Upgraded from ACUITE A4+)
Cash Credit Long Term 4.68 ACUITE BBB- | Stable (Upgraded from ACUITE BB+ | Stable)
Cash Credit Long Term 3.82 ACUITE BBB- | Stable (Upgraded from ACUITE BB+ | Stable)
Proposed Long Term Bank Facility Long Term 1.86 ACUITE BBB- | Stable (Upgraded from ACUITE BB+ | Stable)
Term Loan Long Term 6.50 ACUITE BBB- | Stable (Upgraded from ACUITE BB+ | Stable)
17 Feb 2023 Proposed Short Term Bank Facility Short Term 2.22 ACUITE A4+ (Upgraded from ACUITE A4)
Letter of Credit Short Term 11.40 ACUITE A4+ (Upgraded from ACUITE A4)
Letter of Credit Short Term 4.00 ACUITE A4+ (Upgraded from ACUITE A4)
Cash Credit Long Term 4.68 ACUITE BB+ | Stable (Upgraded from ACUITE C)
Cash Credit Long Term 3.82 ACUITE BB+ | Stable (Upgraded from ACUITE C)
Proposed Long Term Bank Facility Long Term 1.86 ACUITE BB+ | Stable (Upgraded from ACUITE C)
Term Loan Long Term 6.50 ACUITE BB+ | Stable (Upgraded from ACUITE C)
­

Lender’s Name ISIN Facilities Date Of Issuance Coupon Rate Maturity Date Quantum
(Rs. Cr.)
Complexity Level Rating
State Bank of India Not avl. / Not appl. Cash Credit Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 3.82 Simple ACUITE BBB | Stable | Upgraded ( from ACUITE BBB- )
CENTRAL BANK OF INDIA Not avl. / Not appl. Cash Credit Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 4.68 Simple ACUITE BBB | Stable | Upgraded ( from ACUITE BBB- )
CENTRAL BANK OF INDIA Not avl. / Not appl. Letter of Credit Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 11.40 Simple ACUITE A3+ | Upgraded ( from ACUITE A3 )
State Bank of India Not avl. / Not appl. Letter of Credit Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 4.00 Simple ACUITE A3+ | Upgraded ( from ACUITE A3 )
Not Applicable Not avl. / Not appl. Proposed Short Term Bank Facility Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 2.22 Simple ACUITE A3+ | Upgraded ( from ACUITE A3 )
State Bank of India Not avl. / Not appl. Term Loan Not avl. / Not appl. Not avl. / Not appl. 30 Nov 2028 3.34 Simple ACUITE BBB | Stable | Upgraded ( from ACUITE BBB- )
State Bank of India Not avl. / Not appl. Term Loan Not avl. / Not appl. Not avl. / Not appl. 31 Oct 2029 3.31 Simple ACUITE BBB | Stable | Upgraded ( from ACUITE BBB- )
State Bank of India Not avl. / Not appl. Term Loan Not avl. / Not appl. Not avl. / Not appl. 30 Jun 2030 1.71 Simple ACUITE BBB | Stable | Upgraded ( from ACUITE BBB- )


*Annexure 2 - List of Entities (applicable for Consolidation or Parent / Group / Govt. Support)

Sr. No. Name of Entities
1 Permanent Magnets Limited (PML)
2 Quantum Magnetics Private Limited (QMPL)
 

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