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 long term rating of ACUITE BBB- (read as ACUITE triple B minus) and short-term rating of ACUITE A3 (read as ACUITE A three) on the Rs.120.00 Cr bank facilities of Akanksha Automobiles Rudrapur Private Limited. The outlook is stable.
Rating Rationale
The rating takes into account the experienced promoter and the established relationship with Maruti Suzuki India Limited (MSIL), which supports business stability. The company has reported improvement in revenues in FY26, driven by higher volumes, supported by robust demand for passenger vehicles following GST rate cut during the year and new product launches. Operating profitability has remained largely stable, aided by better absorption of fixed costs. The financial risk profile is moderate, characterised by improvement in networth and gearing levels and moderate debt protection metrics followed by adequate liquidity. However, the rating is constrained by the intensive working capital cycle and thin profitability margins. inherent in the auto dealership business, coupled with intense competition and limited bargaining power with the OEM, which restricts pricing flexibility.
About the Company
Incorporated in 2007, Akanksha Automobiles Rudrapur Private Limited (AARPL) is an authorized dealer of Maruti Suzuki Private Limited (MSIL) in Uttarakhand. The company operates 15 showrooms (including workshops) along with 1 central warehouse in Uttarakhand equipped with complete range of automobile solutions like sales, service, exchange, finance, accessories, and insurance. AARPL is promoted by Mr Puneet Agarwal and Mr Ankit Mittal.
Unsupported Rating
Not Applicable
Analytical Approach
Acuite has taken a standalone approach of business and financial risk profile of Akanksha Automobiles Rudrapur Private Limited to arrive at the rating.
Key Rating Drivers
Strengths
Experienced management and long-standing relation with MSIL
The promoters have over two decades of experience in the automobile dealership sector. The company also benefits from a long-standing association with MSIL, which has supported its strong presence in markets of Uttarakhand. Acuite believes that the promoters’ experience has helped the company maintain a healthy market position and is expected to support growth in the foreseeable future.
Increase in scale of operations and stable operating margin
The company’s scale of operations grew by ~15% with revenue of Rs.353.08 crore in FY26 (Prov.) compared to Rs. 306.25 crore in FY25 due to increase in demand of passenger vehicles of Baleno, E-Vitara, Swift, Grand Vitara and Ertiga post GST rate cut as evident from the volume sold which has also increased by 13%. The company has reported a revenue of Rs.72.00 crore in 2MFY27 from Rs.43.00 crore in 2MFY26. The operating margin stood largely stable at 4.83% in FY26 (Prov.) as against 4.79% in FY25 and 5.02% in FY24. The marginal increase in FY26 was due to better absorption of fixed costs. However, the decline in EBITDA margin in FY25 was due to higher inventory holding and increased administrative expenses. Acuite believes that the scale of operations will improve over the medium term, supported by newly opened showrooms, launch of new models, and GST 2.0 implementation.
Moderate Financial Risk profile
The financial risk profile of the company is moderate marked by improvement in net worth and gearing along with moderate debt protection metrics. The tangible net worth of the company stood at Rs.56.53 Cr as on March 31, 2026 (Prov.) from Rs.23.65 Cr as on March 31, 2025, due to accretion to reserves, equity infusion from promoters of Rs.1.26 Cr and unsecured loans being treated as quasi equity of Rs.12.59 Cr. The gearing improved to 1.98 times in FY26 (Prov.) from 4.48 times in FY25. The Total Outside Liabilities/Tangible Net Worth (TOL/TNW) stood at 2.08 times in FY26 (Prov.) as against 4.71 times in FY25. The debt protection metrics of the company stood moderate marked by Interest coverage ratio (ICR) of 1.64 times and debt service coverage ratio (DSCR) of 1.07 times for FY2026 (Prov.) as against 1.54 times and 0.89 times respectively in FY25. Acuite believes that the financial risk profile will remain on similar levels over the medium term in absence of debt funded capex plans and steady accruals.
Weaknesses
Intensive working capital cycle
The intensive working capital cycle of the company is marked by Gross Current Assets (GCA) of 113 days in FY26 (Prov.) as against 130 days in FY25. The inventory days stood at 56 days as on March 31, 2026 (Prov.) as against 70 days as on March 31, 2025. The company holds roughly 2 months of inventory. However, in FY25, there was high holding of inventory which reflected an industry-wide trend of slower retail off-take in early FY25 and higher stock requirements for new model launches. The debtor days stood at 33 days as on March 31, 2026 (Prov.) as against 36 days as on March 31, 2025. Sales to customers are made on a cash and carry model. However, ~80% of the vehicles are bought on vehicle financing basis through banks resulting in a collection period ranging between 7 days to 25 days. Against this, the creditors stood at 2 days in FY26 (Prov.) and FY25. The credit terms with suppliers are on an advance basis. Acuite believes that the working capital cycle of the company will remain at the similar levels over the medium term.
Limited bargaining power
Being primarily into the auto dealership business, where profitability margins are inherently low. The PAT margin stood at 0.89% in FY26 (Prov.) as against 0.83% in FY25. Moreover, dealers have limited bargaining power with the principal manufacturer. Product margins are fixed by MSIL, restricting incremental profits for the company.
Intense competition in the industry
The Indian automobile industry is highly competitive, with several players such as Maruti Suzuki India Limited (MSIL), Tata Motors, Hyundai, Honda, and Toyota operating in the passenger vehicle segment. The company’s operations are geographically restricted to Uttarakhand. OEMs are encouraging more dealerships to improve penetration and sales, increasing competition among dealers. Entry of global OEMs in the Indian market has further intensified competition. Consequently, OEMs such as MSIL offer discount schemes to attract customers. Due to intense competition, dealers are compelled to pass on discounts and exchange schemes to attract customers and capture market share. Dealers’ performance also depends on the industry scenario and OEM performance. AARPL are directly linked to MSIL’s performance. Any downturn in OEM performance or change in dealer agreements will directly impact the financial and operating performance of the company.
Rating Sensitivities
Potential triggers (individual or collective) for an upward rating action:
Increase in revenue above Rs.600 Cr. with improvement in profitability
Improvement in working capital cycle of the company
Potential triggers (individual or collective) for a downward rating action:
Decline in operating margin below 4.00%
Elongation of working capital cycle
Liquidity Position
Adequate
The liquidity position of the company remains adequate characterised by sufficient net cash accruals of Rs.5.72 Cr in FY26 (Prov.) against debt repayment obligations of Rs.4.70 Cr over the same period. The
company has replaced multiple smaller loans with a single loan against property from LIC Housing Finance, which has a longer repayment period of 15 years which resulted in lower repayable from FY26 and onwards. The company is expected to generate net cash accruals of ~Rs.8-10 crore against repayment obligations of ~Rs. 2.00 crore annually. The current ratio stood comfortable at 1.68 times in FY26 (Prov.) as against 1.14 times in FY25. The average bank limit utilisation of fund-based limits stood high at 88.39% for the past 6 months ended May 2026. The cash and bank balances stood at Rs.2.91 Cr in FY26 (Prov.) as against Rs.1.17 Cr in FY25. Acuite believes the liquidity remains adequate on account of sufficient accruals against debt repayment, financial flexibility of promoters to infuse funds, comfortable current ratio albeit high bank limit utilization over the medium term.
Outlook: Stable
Other Factors affecting Rating
None
Particulars
Unit
FY 26 (Provisional)
FY 25 (Actual)
Operating Income
Rs. Cr.
353.08
306.25
PAT
Rs. Cr.
3.14
2.54
PAT Margin
(%)
0.89
0.83
Total Debt/Tangible Net Worth
Times
1.98
4.48
PBDIT/Interest
Times
1.64
1.54
Status of non-cooperation with previous CRA (if applicable)
OCRA vide its press release dated March 28th, 2024 had denoted the rating of Akanksha Automobiles Rudrapur Private Limited as 'B/Stable/A4; DOWNGRADED AND ISSUER NOT CO-OPERATING.
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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