Note:- For activities or ratings of instruments falling under the purview of Financial Sector Regulators other than SEBI, the grievance / dispute redressal mechanisms and investor protection mechanisms provided by SEBI shall not be available.
Rating Rationale
Acuite has assigned 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.100.00 crore of bank facilities of Caparo Maruti Limited (CML). The outlook is ‘Stable’.
Rationale for Rating
The ratings factor in the company’s established position as a sheet metal supplier to Maruti Suzuki India Limited (MSIL), a leading player in the passenger vehicle (PV) segment, supported by an experienced management team with nearly three decades of industry presence. The company has demonstrated improvement in its scale of operations, with revenue from operations increasing by ~18% to Rs. 712.57 Cr. in FY26 (prov.) from Rs. 603.53 Cr. in FY25, accompanied by an improvement in operating margins to 2.96% in FY26 (prov.) from 1.37% in FY25. The working capital management remains efficient, as reflected in GCA days of 49 days in FY26 (prov.) compared to 53 days in FY25. Further, the liquidity profile is supported by financial flexibility through access to inter-corporate deposits (ICDs) and extended credit from group companies, which reduces reliance on external borrowings and supports timely debt servicing. However, the ratings are constrained by the company’s negative net worth and its exposure to the inherent cyclicality of the automotive sector.
About the Company
Caparo Maruti Limited (CML) was incorporated in 1994 as a joint venture between Blue Elephant Finance Limited (holding 75% equity) and Maruti Suzuki India Limited (MSIL), which holds the remaining 25%. The company is headquartered in Gurgaon and is engaged in the manufacturing, sale and trading of sheet metal components and welded assemblies, primarily catering to original equipment manufacturers (OEMs) in the automobile sector. CML has a diversified product portfolio comprising under body assemblies, main body assemblies, front end assemblies and rear end assemblies for the passenger vehicle segment, along with stamped components for two-wheelers, commercial vehicles, tractors and off-highway applications. Its product range includes key structural components such as chassis assemblies, tunnel floor members, centre pillar panels, cowl panels and rear floor assemblies. The operations of the company are managed by board of directors comprising Mr. Vinod Kumar Bapna, Mr. Akash Paul, Mr. Arush Paul, Mr. Shashank Srivastava and Ms. Meenakshi Singh.
Unsupported Rating
Not applicable
Analytical Approach
Acuite has considered the standalone business and financial risk profile of CAPARO MARUTI LIMITED to arrive at the rating.
Key Rating Drivers
Strengths
Strong parentage and experienced management team
Caparo Maruti Limited (CML) benefits from strong parentage, being a joint venture between Blue Elephant Finance Limited (holding 75% equity) and Maruti Suzuki India Limited (MSIL), which holds the balance 25%. Blue Elephant Finance Limited is a Mauritius-based entity representing the Caparo Group’s operations in India. The Caparo Group, a UK-headquartered conglomerate founded in 1968 by Late Lord Swraj Paul, operates across more than forty locations globally and has a diversified presence in steel and engineered products. In India, the group has an established footprint across automotive components, steel processing, precision engineering, and power segments. The India operations were co-founded by Late Angad Paul in 1994, reflecting over three decades of sustained presence in the domestic automotive components industry. Furthermore, MSIL, the joint venture partner, is the market leader in the domestic passenger vehicle segment with a market share of around 40%.
Improvement in scale of operations and profitability
The company has demonstrated improvement in its operational performance, with revenue from operations increasing by ~18.07% to Rs. 712.57 Cr. in FY26 (prov.) from Rs. 603.53 Cr. in FY25, primarily driven by higher sales volumes in line with the growth in passenger vehicle demand. Operating margin improved to 2.96% in FY26 (prov.) as against 1.37% in FY25, supported by better operating efficiencies and improved absorption of fixed costs. The net margin also improved to 1.64% in FY26 (prov.) from negative 3.96% in FY25, aided by a one-time gain from the sale of land amounting to Rs. 20.01 Cr. Acuité believes that the company’s performance is expected to witness further improvement over the medium term, supported by steady demand from the automotive sector.
Efficient working capital management
The company continues to maintain efficient working capital operations, as reflected in GCA days of 49 days in FY26 (prov.) as compared to 53 days in FY25. The improvement was driven by moderation in inventory holding at 25 days in FY26 (prov.) from 28 days in FY25, along with stable receivables position of 20 days in FY26 (prov.) vis-à-vis 21 days in FY25. The creditor period stood at 75 days in FY26 (prov.) as compared to 88 days in FY25. Acuité expects the working capital cycle to remain range-bound over the medium term.
Financial flexibility through group support
CML derives financial flexibility from regular support extended by group companies in the form of intercorporate deposits (ICDs) and extended credit periods. This support has aided the company’s liquidity position, enabled efficient working capital management, and facilitated timely servicing of its external debt obligations. The continued support from the group is expected to remain a key credit strength. Acuite believes that going forward, the group’s strong financial backbone will continue to support the company if needed in the medium term.
Weaknesses
Below-average financial risk profile
The financial risk profile of the company remains below average, primarily due to its eroded net worth. The total tangible net worth (TNW) stood at Rs. -21.52 Cr. as on March 31, 2026 (prov.) as compared to Rs. -32.89 Cr. as on March 31, 2025, with the improvement driven by profit accretion during the year. The capital structure continues to remain constrained, as reflected in a negative gearing of -5.76 times in FY26 (prov.) as against -4.37 times in FY25, due to the negative net worth position. However, the debt protection metrics have shown improvement, with interest coverage ratio improving to 2.73 times in FY26 (prov.) from 0.61 times in FY25, and debt service coverage ratio improving to 1.40 times from 0.28 times over the same period. The TOL/TNW stood at -13.68 times as on March 31, 2026 (prov.) as against -9.52 times as on March 31, 2025. Acuité expects the financial risk profile to gradually improve over the medium term, supported by steady cash accruals and absence of any major debt-funded capital expenditure.
Susceptibility to raw material price volatility and cyclicality in the automobile industry
The company’s profitability remains exposed to volatility in key raw material prices, particularly steel, and pricing pressures from OEMs. Although the company has a raw material price pass-through mechanism with its customers, the same is subject to a time lag, thereby impacting margins in the interim. The ability to secure higher value-added orders, particularly for premium models from MSIL, remains critical to sustaining profitability. Further, the company’s operations are inherently linked to the performance of the automotive sector, making it susceptible to industry cyclicality. Any sustained slowdown in the domestic automobile industry could adversely impact the company’s revenue growth and profitability.
Rating Sensitivities
Potential triggers (individual or collective) for an upward rating action:
Growth in operating income by more than 30% with stable improvement in profitability.
Improvement in financial risk profile.
Potential triggers (individual or collective) for a downward rating action:
Any large debt funded capex, impacting the financial risk profile and liquidity.
Revenue falling by 20-25 percent and steep decline in profitability.
Liquidity Position
Adequate
The liquidity profile of the company is adequate marked by the net cash accruals of company stood at Rs. 27.05 Cr. in FY 26 (prov.) against the debt obligation of Rs. 14.90 Cr. for the same period. The company has cash & bank position of Rs. 9.07 Cr. Current ratio stood at 0.36 times for FY26 appear optically low, however, this is a function of the negative working capital position, which is structurally supported by a common feature of auto-component manufacturers with strong OEM relationship.The average fund based bank limit utilization is at 88.31% and non-fund based bank limit utilization is at 6.46% for the 12 months’ period ending March 2026. The company also benefits from financial flexibility, with Caparo Group entities expected to support if needed as we have witnessed before.
Outlook: Stable
Other Factors affecting Rating
None
Particulars
Unit
FY 26 (Provisional)
FY 25 (Actual)
Operating Income
Rs. Cr.
712.57
603.53
PAT
Rs. Cr.
11.67
(22.29)
PAT Margin
(%)
1.64
(3.69)
Total Debt/Tangible Net Worth
Times
(5.76)
(4.37)
PBDIT/Interest
Times
2.73
0.61
Status of non-cooperation with previous CRA (if applicable)
Note:- For activities or ratings of instruments falling under the purview of Financial Sector Regulators other than SEBI, the grievance / dispute redressal mechanisms and investor protection mechanisms provided by SEBI shall not be available.
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