Product Quantum (Rs. Cr) (SEBI) Quantum (Rs. Cr) (Other FSR) Long Term Rating Short Term Rating Regulated By
Bank Loan Ratings 0.00 57.70 ACUITE BB+ | Stable | Upgraded - RBI
Bank Loan Ratings 0.00 52.30 - ACUITE A4+ | Upgraded RBI
Total Outstanding 0.00 110.00 - - -
Total Withdrawn 0.00 0.00 - - -
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

­Acuité has upgraded its long-term rating to ‘ACUITE BB+’ (read as ACUITE Double B Plus) from 'ACUITE BB-' (read as ACUITE Double B Minus) and short-term rating to 'ACUITE A4+' (read as ACUITE A Four Plus) from 'ACUITE A4' (read as ACUITE A Four) on the Rs.110.00 Cr. bank facilities of MGT Motors Private Limited (MGTMPL). The outlook is ‘Stable’.

Rationale for Rating:
The company has migrated from the status of ‘Issuer not co-operating’. Further, the rating upgrade reflects the company’s established market position and long-standing association with Tata Motors Ltd, along with marginal improvement in operating margins in last two years ended FY26 and expected growth in scale supported by recent expansion in workshop business. However, compared to FY23, the performance of the company has seen a decline due to ensuing geopolitical issues prevailing in Manipur leading to lower topline from that showroom and overall reduced demand for commercial vehicles. The rating also factors in the company’s demonstrated ability to manage its working capital and debt obligations despite stretched liquidity conditions. However, the rating remains constrained by moderation in revenues, thin profitability, high capital leverage with average debt protection metrics, and moderately intensive working capital operations.

About the Company

MGT Motors Private Limited (MGT) was incorporated in 1998 by Mr. Kulwant Singh Cheema and his family. The company functions as an authorized dealer and service provider for Tata Motors Ltd, primarily engaged in the sale and servicing of new commercial vehicles and spare parts. The company has 1 showroom in Guwahati and 1 in Manipur. It has various workshops in both the states. Its key operations include vehicle sales, spare parts, and after-sales services. The current directors include Mr. Kulwant Singh Cheema, Amardeep Singh Cheema and Vrender Kaur Cheema.

 
 
Unsupported Rating
­Not Applicable
 
Analytical Approach

­­Acuité has considered the standalone business and financial risk profile of MGT Motors Private Limited (MGTMPL) while arriving at the rating.
 
Key Rating Drivers

Strengths

­Long operational track record and experienced management:
MGTMPL has a long track of operations spanning over two decades. Moreover, the promoters of the company Mr. Kulwant Singh Cheema, Mr. Amardeep Singh Cheema and Mr. Virender Kaur Cheema have extensive experience of more than two decades in the automobile dealership industry. The company has set up 2 showrooms. Acuite believes that the company will continue to benefit from the promoter’s extensive experience and longstanding association with TATA Motors Limited over the medium term.


Weaknesses

Deterioration in scale of operations albeit marginal improvement in profitability
The revenue of the company declined and stood at Rs.263.48 Cr in FY2026 (Prov.) against Rs.305.89 Cr in FY2025. This decline was primarily attributable to subdued performance of its Manipur dealership, which was impacted by the ongoing volatile situation in the region, resulting in fluctuating sales. The company earns around ~84 percent of its income from the sale of cars and the rest through sale of spares and services. The operating margin of company stood at 3.68 percent in FY2026 (Prov.) against 3.31 percent in FY2025. This is on account of moderation in operating expenses incurred during the year. Further, the net profitability margin improved and stood to 0.35 percent in FY2026 (Prov.) against 0.26 percent in FY2025. Acuité believes, that the ability of the company to improve revenue and profitability will remain a key rating sensitivity.

Moderate financial risk profile:
The financial risk profile of the MGTMPL is moderate, characterized by high gearing, moderate networth and debt protection metrics. The net worth of the company stood at Rs. 33.74 Cr as on March 31st, 2026 (Prov.), as against Rs. 32.84 Cr as on March 31st, 2025, due to accretion of profit to reserve. Further, this tangible net worth also includes unsecured loans from directors amounting to Rs. 2.12 Cr., which have been treated as quasi equity since they are subordinated to bank debts. The total debt of the company stood at Rs. 88.21 Cr.as on March 31, 2026 (Prov.), as against Rs. 72.90 Cr as on March 31, 2025. The gearing (debt-equity) of the company stood at 2.61 times as on March 31, 2026 (Prov.), as compared to 2.22 times as on March 31, 2025. The TOL/TNW of the company stood at 2.71 times as on March 31, 2026 (Prov.), as against 2.69 times as on March 31,2025. Further, the debt protection metrics of the company stood average reflected by debt service coverage ratio of 0.98 times for FY2026 (Prov.) as against 1.07 times for FY2025 and interest coverage ratio stood at 1.33 times for FY2026 (Prov.) as against 1.35 times for FY2025. The net cash accruals to total debt (NCA/TD) stood at 0.02 times in FY2026 (Prov.) as compared to 0.03 times in the previous year.
Acuité believes that going forward the financial risk profile of the company is expected to improve over the medium term, in absence of any major debt funded capex plans.

Moderately Intensive Working capital operations:
The company’s working capital operations are moderately intensive in nature. The GCA days stood at 147 days as on March 31, 2026 (Prov.), as against 116 days as on March 31, 2025. The GCA days are driven by inventory days. The debtor days stood at 59 days as on March 31,2026 (Prov.) as against 58 days as on March 31, 2025. The company maintains an average inventory holding period of approximately 45–60 days, while procurement from suppliers is undertaken on a full advance payment basis. The inventory days stood at 67 days as on March 31, 2026 (Prov.), as against 40 days as on March 31, 2025. The creditor days stood at 2 days as on March 31,2026 (Prov.) as against 3 days as on March 31, 2025. The payment terms with TATA motors ltd is fully advance. Acuité believes that the working capital operations of the company is expected to remain in similar range in the medium term.

Rating Sensitivities

Potential triggers (individual or collective) for an upward rating action:

­• Sustained improvement in scale of operations along with stable or improving profitability margins.
• Improvement in financial risk profile reflected by reduction in leverage and strengthening of debt protection metrics, with overall gearing below ~2.00x.
• Improvement in liquidity position supported by higher cash accruals.

Potential triggers (individual or collective) for a downward rating action:

­• Any further decline in revenue or pressure on profitability margins.
• Deterioration in financial risk profile with DSCR below 1.00x.
• Further elongation in working capital cycle.

Liquidity Position
Stretched

The company’s liquidity position is stretched, marked by low but steady net cash accruals of Rs. 2.13 Cr. in FY2026 (Prov.) as against maturing debt obligations of Rs. 2.34 Cr. in the same tenure. The company has serviced its debt obligations through working capital management. Going forward, the cash accruals of the company are estimated in the range of Rs.3.20 Cr. to Rs.5.00 Cr. as against maturing repayment obligations in the range of Rs. 1.00-1.60 Cr. over the medium term. The unencumbered cash and bank balances of the company stood at Rs. 5.40 Cr. as on March 31, 2026 (Prov.). The current ratio stood at 1.21 times as on March 31, 2026 (Prov.), as compared to 1.21 times as on March 31, 2025. Further, the average consolidated fund-based bank limit utilization is at 93.37% for the 6 months’ period ending April 2026 with instances of adhoc limit availed by the company.
Acuite believes that the company’s liquidity will continue to be supported by steady accruals, absence of any major capex plans albeit high dependence on working capital borrowings.
 
Outlook: Stable
­
 
Other Factors affecting Rating
­None
 

Particulars Unit FY 26 (Provisional) FY 25 (Actual)
Operating Income Rs. Cr. 263.48 305.89
PAT Rs. Cr. 0.91 0.80
PAT Margin (%) 0.35 0.26
Total Debt/Tangible Net Worth Times 2.61 2.22
PBDIT/Interest Times 1.33 1.35
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

Date Name of Instruments/Facilities Term Amount (Rs. Cr) Rating/Outlook
16 Apr 2026 Channel/Dealer/Vendor Financing Short Term 62.50 ACUITE A4 (Downgraded & Issuer not co-operating* from ACUITE A4+)
Channel/Dealer/Vendor Financing Short Term 5.00 ACUITE A4 (Downgraded & Issuer not co-operating* from ACUITE A4+)
Channel/Dealer/Vendor Financing Short Term 9.00 ACUITE A4 (Downgraded & Issuer not co-operating* from ACUITE A4+)
Ad-hoc Limits (Fund Based) Short Term 3.50 ACUITE A4 (Downgraded & Issuer not co-operating* from ACUITE A4+)
Channel/Dealer/Vendor Financing Short Term 15.00 ACUITE A4 (Downgraded & Issuer not co-operating* from ACUITE A4+)
Channel/Dealer/Vendor Financing Short Term 10.00 ACUITE A4 (Downgraded & Issuer not co-operating* from ACUITE A4+)
Cash Credit Long Term 5.00 ACUITE BB- (Downgraded & Issuer not co-operating* from ACUITE BB)
16 Jan 2025 Channel/Dealer/Vendor Financing Short Term 62.50 ACUITE A4+ (Reaffirmed & Issuer not co-operating*)
Channel/Dealer/Vendor Financing Short Term 15.00 ACUITE A4+ (Reaffirmed & Issuer not co-operating*)
Channel/Dealer/Vendor Financing Short Term 10.00 ACUITE A4+ (Reaffirmed & Issuer not co-operating*)
Channel/Dealer/Vendor Financing Short Term 5.00 ACUITE A4+ (Reaffirmed & Issuer not co-operating*)
Channel/Dealer/Vendor Financing Short Term 9.00 ACUITE A4+ (Reaffirmed & Issuer not co-operating*)
Ad-hoc Limits (Fund Based) Short Term 3.50 ACUITE A4+ (Reaffirmed & Issuer not co-operating*)
Cash Credit Long Term 5.00 ACUITE BB (Downgraded & Issuer not co-operating* from ACUITE BB+)
23 Oct 2023 Channel/Dealer/Vendor Financing Short Term 62.50 ACUITE A4+ (Downgraded & Issuer not co-operating* from ACUITE A3)
Channel/Dealer/Vendor Financing Short Term 15.00 ACUITE A4+ (Downgraded & Issuer not co-operating* from ACUITE A3)
Channel/Dealer/Vendor Financing Short Term 10.00 ACUITE A4+ (Downgraded & Issuer not co-operating* from ACUITE A3)
Channel/Dealer/Vendor Financing Short Term 5.00 ACUITE A4+ (Downgraded & Issuer not co-operating* from ACUITE A3)
Channel/Dealer/Vendor Financing Short Term 9.00 ACUITE A4+ (Downgraded & Issuer not co-operating* from ACUITE A3)
Ad-hoc Limits (Fund Based) Short Term 3.50 ACUITE A4+ (Downgraded & Issuer not co-operating* from ACUITE A3)
Cash Credit Long Term 5.00 ACUITE BB+ (Downgraded & Issuer not co-operating* from ACUITE BBB- | Stable)
­

Lender’s Name ISIN Facilities Listing Status Regulated By Date Of Issuance Coupon Rate Maturity Date Quantum
(Rs. Cr.)		 Complexity Level Rating
H D F C Bank Limited Not avl. / Not appl. Bank Guarantee (BLR) Unlisted RBI Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 0.30 Simple ACUITE A4+ | Upgraded ( from ACUITE A4 )
H D F C Bank Limited Not avl. / Not appl. Cash Credit Unlisted RBI Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 15.00 Simple ACUITE BB+ | Stable | Upgraded ( from ACUITE BB- )
H D F C Bank Limited Not avl. / Not appl. Channel/Dealer/Vendor Financing Unlisted RBI Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 22.00 Simple ACUITE A4+ | Upgraded ( from ACUITE A4 )
Tata Capital Limited Not avl. / Not appl. Channel/Dealer/Vendor Financing Unlisted RBI Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 15.00 Simple ACUITE A4+ | Upgraded ( from ACUITE A4 )
State Bank of India Not avl. / Not appl. Channel/Dealer/Vendor Financing Unlisted RBI Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 15.00 Simple ACUITE A4+ | Upgraded ( from ACUITE A4 )
Tata Capital Limited Not avl. / Not appl. Covid Emergency Line. Unlisted RBI 14 Apr 2022 Not avl. / Not appl. 14 Apr 2028 1.35 Simple ACUITE BB+ | Stable | Upgraded ( from ACUITE BB- )
State Bank of India Not avl. / Not appl. Dropline Overdraft Unlisted RBI Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 15.00 Simple ACUITE BB+ | Stable | Upgraded ( from ACUITE BB- )
Not Applicable Not avl. / Not appl. Proposed Long Term Bank Facility Unlisted RBI Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 23.13 Simple ACUITE BB+ | Stable | Upgraded ( from ACUITE BB- )
Bank Of Baroda Not avl. / Not appl. Secured Overdraft Unlisted RBI Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 0.22 Simple ACUITE BB+ | Stable | Upgraded ( from ACUITE BB- )
Tata Capital Limited Not avl. / Not appl. Term Loan Unlisted RBI 31 Oct 2024 Not avl. / Not appl. 31 Oct 2027 2.00 Simple ACUITE BB+ | Stable | Upgraded ( from ACUITE BB- )
Tata Capital Limited Not avl. / Not appl. Term Loan Unlisted RBI 18 Jun 2024 Not avl. / Not appl. 18 Jun 2030 0.50 Simple ACUITE BB+ | Stable | Upgraded ( from ACUITE BB- )
Tata Capital Limited Not avl. / Not appl. Term Loan Unlisted RBI 18 Jun 2024 Not avl. / Not appl. 18 Jun 2030 0.50 Simple ACUITE BB+ | Stable | Upgraded ( from ACUITE BB- )
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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