Established track record of operations and experienced management
Ajinkya Autowheels LLP (AAWL) has been established in 2019 and operates as an authorised Kia dealer. It has expanded to five showrooms and service centres across Latur, Nanded, Chhatrapati Sambhaji Nagar, Waluj and Jalna. The firm is led by partners Mr. Vikram Madhukarrao Saudagar and Mr. Ajaysingh Bhagwanshingh Rajput, both are having over a decade of experience in the dealership business. They are ably supported by second line of management.

Stable operating performance
The firm has reported a steady operating performance, with operating income improving to Rs. 228.83 Cr. in FY25 from Rs. 203.15 Cr. in FY24. The improvement in FY25 was supported by healthy demand across Kia models and incremental contributions from newly developed showrooms and service centres. Further, the operating profitability deteriorated marginally with EBITDA margins stood at 3.13 per cent in FY25 compared to 3.51 per cent in FY24. PAT margins declined to 0.70 per cent from 1.17 per cent owing to higher finance costs. In 9MFY26, , the firm reported revenue of Rs. 213.77 Cr. with an EBITDA margin of 3.43 percent and PAT margin of 0.68 percent supported by sustained vehicle sales and growing after-sales service income. Acuite believes the operating performance is likely to remain stable over the near to medium term, supported by steady sales, growing after-sales income and contributions from newly open showrooms.

Efficient working capital cycle
The firm’s working capital cycle is efficient reflected in Gross Current Asset (GCA)of 68 days in FY25, improving from 74 days in FY24, reflecting better inventory and receivable management.  Inventory days improved to 26 days in FY25 from 54 days in FY24 Further, debtor days moderated to 20 days in FY25 from 7 days in FY24. Creditor days stood at 8 days in FY25 as compared to 13 days in FY24, indicating timely payments to OEMs and suppliers. Acuite believes the firm will continue to benefit from an efficient working capital cycle given its nature of business.

Average financial risk profile
Firm’s financial risk profile is average, marked by average net worth, leveraged capital structure and average coverage indicators. The tangible net worth stood low at Rs. 7.43 Cr. as on March 31, 2025, improving from Rs. 5.26 Cr. in FY24, supported by retained earnings and capital infusion.  Total debt increased to Rs. 43.04 Cr. in FY25 from Rs. 40.74 Cr. in FY24, primarily on account of higher borrowings and investments in new showrooms and demo vehicles.  As a result, the gearing remained elevated at 5.79 times in FY25, though improved from 7.75 times in FY24.  Debt protection metrics reflect moderation, with the interest coverage ratio at 1.89 times in FY25 as against 2.16 times in FY24, and the debt service coverage ratio at 1.51 times in FY25 against 1.80 times in FY24.  The debt-to-EBITDA ratio stood high at 5.94 times in FY25, against 5.31 times in FY24, reflecting a high reliance on external borrowings. Acuite believes the financial risk profile will remain average over the medium term, on the back of low net worth base.

Exposure to competition in the automotive dealership segment
Ajinkya Autowheels LLP (AAWL) operates in a highly competitive automotive dealership industry, where dealership performance is closely tied to the strategies and dispatch cycles of its OEM, Kia Motors. Although the firm has expanded its footprint across multiple locations, OEMs typically appoint multiple dealers within a region to enhance market penetration, thereby limiting pricing flexibility. Additionally, competitive pressures from other automobile brands and fluctuations in OEM dispatches can impact sales volumes and dealership margins.