Press Release

Press Release

July 06, 2026

ARG ELECTRICALS PRIVATE LIMITED
Rating Assigned

Product	Quantum (Rs. Cr) (SEBI)	Quantum (Rs. Cr) (Other FSR)	Long Term Rating	Short Term Rating	Regulated By
Bank Loan Ratings	0.00	6.50	ACUITE BBB- \| Stable \| Assigned	-	RBI
Bank Loan Ratings	0.00	23.50	-	ACUITE A3 \| Assigned	RBI
Total Outstanding	0.00	30.00	-	-	-
Total Withdrawn	0.00	0.00	-	-	-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

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.30.00 crore of bank facilities of ARG Electricals Private Limited (AEPL). The outlook is ‘Stable’.

Rationale for the rating
The rating reflects the company's established track record of operations of nearly a two decades in the execution of electrical work projects. The rating also factors in the stable scale of operations of the company, as reflected in its operating income of Rs. 123.59 Cr. in FY26 (Prov.) as against Rs. 122.46 Cr. in FY25. Further, the profitability improved, with the operating margin increasing to 10.22% in FY26 (Prov.) from 8.46% in FY25 and the PAT margin improving to 7.31% from 5.13% during the same period. The company's unexecuted order book of approximately Rs. 238.28 Cr. as on March 31, 2026, provides revenue visibility over the medium term, however, timely execution of the order book remains a key monitorable. The rating further draws comfort from the company's moderate financial risk profile, marked by a moderate net worth, low gearing, and comfortable debt protection metrics. However, the rating is constrained by the working capital intensive nature of operations and susceptibility of profitability to fluctuations in raw material prices.

About the Company

Rajasthan based, Arg Electricals Private Limited is an engineering, procurement, and construction (EPC) contractor specializing in high-voltage electrical distribution networks, rural electrification, and commercial HVAC (heating, ventilation, and air conditioning) system installations. The company was incorporated in 2011. The current directors of the company are Mr. Rahul Goyal, Mr. Yogesh Goel, Mr. Akhil Goyal, and Mr. Aman Kumar Agarwal.

Unsupported Rating

Not applicable

Analytical Approach

Acuite has considered the standalone financial and business risk profile of ARG Electricals Private Limited (AEPL) to arrive at the rating.

Key Rating Drivers

Strengths

Experienced promoters
AEPL is promoted by Mr. Rahul Goyal, Mr. Yogesh Goel, and Mr. Akhil Goyal, who have been associated with the company since its inception. The promoters possess over two decades of experience in the erection of power substations and are actively involved in the company's day-to-day operations. They are supported by a team of qualified and experienced professionals, which aids in the efficient execution of projects and overall business management. Acuite believes that the company is expected to benefit from the continued support of experienced management over the medium term.

Stable revenue profile and improved profitability
AEPL maintained a stable scale of operations, reflected in an operating income of Rs. 123.59 Cr. in FY26 (Prov.) as against Rs. 122.46 Cr, in FY25. The company's revenue profile continues to be supported by a moderate unexecuted order book of approximately Rs. 238.28 Cr. as on March 31, 2026, providing adequate revenue visibility over the near to medium term. The operating performance improved during FY26 (Prov.), with EBITDA margin increasing to 10.22% from 8.46% in FY25. The improvement in profitability was primarily driven by a reduction in raw material costs. The PAT margin also improved to 7.31% in FY26 (Prov.) from 5.13% in FY25. Acuité believes that the company's scale of operations is expected to remain supported over the medium term by its moderate order book position.

Moderate financial risk profile
The financial risk profile of AEPL remained moderate, marked by a net worth of Rs. 29.60 Cr. as on March 31, 2026 (Prov.), as against Rs. 20.57 Cr. as on March 31, 2025. The capital structure also remained comfortable, with a gearing ratio of 0.86 times as on March 31, 2026 (Prov.), compared to 0.78 times as on March 31, 2025. The moderation in gearing was primarily on account of an increase in unsecured loans from directors and promoters, which are interest-free in nature and have been utilized for working capital requirements. Further, the debt protection metrics remained comfortable, as reflected by the interest coverage ratio (ICR) and debt service coverage ratio (DSCR) of 7.01 times and 5.30 times, respectively, as on March 31, 2026 (Prov.), against 5.55 times and 3.59 times, respectively, as on March 31, 2025. Acuité believes that the company's financial risk profile is expected to improve over the medium term, supported by steady cash accruals and the absence of any significant debt-funded capital expenditure plans.

Weaknesses

Intensive working capital operations
The company’s working capital operations remained intensive, as reflected by gross current assets (GCA) of 331 days in FY26 (Prov.) as against 283 days in FY25. The elongated working capital cycle is primarily on account of high debtor days, which stood at 270 days in FY26 (Prov.) compared to 176 days in FY2025. The debtor level remained elevated due to the nature of contracts executed by the company, wherein a significant portion of receivables comprises retention money. As per the contractual terms, the company receives only a part of the billed amount upon invoicing, while the balance is retained by customers and released upon completion of specified milestones and defect-liability obligations. Inventory holding remained moderate, with inventory days at 44 days in FY2026 (Prov.) as against 66 days in FY2025. Acuité believes that the company’s working capital operations are likely to remain intensive over the near to medium term, owing to the inherent nature of its business, the presence of retention money in receivables, and its exposure to government contracts.

Highly competitive industry marked by tender-based nature of business
The company’s performance is susceptible to the tender-based nature of business, where the business depends on the ability to bid for contracts successfully. Risk becomes more pronounced as tendering is based on the minimum amount of bidding of contracts.

Rating Sensitivities

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

Growth in the scale of operations by 50% with improving profitability margins.
Timely execution of order book and bagging new orders.

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

Reduction in OB/OI below 1.5 times
Any elongation in working capital management.
The company’s failure to secure new orders in FY27 and further delays in execution of the existing order book.

Liquidity Position

Adequate

The liquidity profile of the company is adequate, marked by net cash accruals of Rs. 9.23 Cr. in FY26 (Prov.) against relatively low debt repayment obligations of Rs. 0.16 Cr. during the same period. Further, the company had a cash and bank balances of Rs. 0.51 Cr. as on March 31, 2026 (Prov.), while its current ratio stood at 1.28 times. The average utilization of the company's working capital facilities remained moderate, with fund-based and non-fund-based limits utilized at 74.38% and 73.71%, respectively, during the 12 months ended April 2026. Acuité believes that the company's liquidity position is likely to remain adequate over the medium term, supported by steady cash accruals against modest debt repayment obligations and the absence of any significant debt-funded capital expenditure plans.

Outlook: Stable

Other Factors affecting Rating

None

Key Financials

Particulars	Unit	FY 26 (Provisional)	FY 25 (Actual)
Operating Income	Rs. Cr.	123.59	122.46
PAT	Rs. Cr.	9.04	6.28
PAT Margin	(%)	7.31	5.13
Total Debt/Tangible Net Worth	Times	0.86	0.78
PBDIT/Interest	Times	7.01	5.55

Status of non-cooperation with previous CRA (if applicable)

None

Any other information

None

Applicable Criteria

• Default Recognition :- https://www.acuite.in/view-rating-criteria-52.htm
• Infrastructure Sector: https://www.acuite.in/view-rating-criteria-51.htm
• Application Of Financial Ratios And Adjustments: https://www.acuite.in/view-rating-criteria-53.htm

Note on complexity levels of the rated instrument

In order to inform the investors about complexity of instruments, Acuité has categorized such instruments in three levels: Simple, Complex and Highly Complex. Acuite’s categorisation of the instruments across the three categories is based on factors like variability of the returns to the investors, uncertainty in cash flow patterns, number of counterparties and general understanding of the instrument by the market. It has to be understood that complexity is different from credit risk and even an instrument categorized as 'Simple' can carry high levels of risk. For more details, please refer Rating Criteria “Complexity Level Of Financial Instruments” on www.acuite.in.

Rating History :

Not applicable

Annexure - Details of instruments rated

Lender’s Name	ISIN	Facilities	Listing Status	Regulated By	Date Of Issuance	Coupon Rate	Maturity Date	Quantum (Rs. Cr.)	Complexity Level	Rating
Punjab National Bank	Not avl. / Not appl.	Bank Guarantee (BLR)	Unlisted	RBI	Not avl. / Not appl.	Not avl. / Not appl.	Not avl. / Not appl.	23.50	Simple	ACUITE A3 \| Assigned
Punjab National Bank	Not avl. / Not appl.	Secured Overdraft	Unlisted	RBI	Not avl. / Not appl.	Not avl. / Not appl.	Not avl. / Not appl.	6.50	Simple	ACUITE BBB- \| Stable \| Assigned

Contacts

Mohit Jain
Chief Analytical Officer - Rating Operations

Siddharth Garg
Associate Analyst - Rating Operations

Contact details exclusively for investors and lenders

Mob: +91 8591310146
Email ID: analyticalsupport@acuite.in

List of instruments and names of regulators of the instruments

As required by SEBI Circular (SEBI/HO/DDHS/DDHS-PoD-2/I/4685/2026) dated February 10, 2026, a list of activities or instruments falling under the purview of various Financial Sector Regulators (FSRs), along with the names of respective FSRs, is being disclosed below:
A. Rating Activity:

Sr. No.	Instrument / activity Name	Regulator of the instrument
1	Listed/Proposed to be listed Bonds/Debentures/Preference Shares (all securities)	SEBI
2	Unlisted/Proposed to be unlisted Bonds/Debentures/ Preference share (all securities)	MCA
3	Listed PTCs / Securitisation Notes (originated by entities regulated by RBI)¹	SEBI
4	Listed PTCs / Securitisation Notes (originated by entities not regulated by RBI)¹	SEBI
5	Unlisted PTCs / Securitisation Notes (originated by entities regulated by RBI)¹	RBI
6	Listed Commercial Paper and NCDs with original maturity less than 1 year	RBI
7	Unlisted Commercial Paper and NCDs with original maturity less than 1 year	RBI
8	Loan Facilities (Fund/Non-Fund Based) from Bank / NBFCs/ NHB/ FIs ²	RBI
9	External Commercial Borrowings and other similar borrowings	RBI
10	Certificates of Deposit	RBI
11	Fixed Deposits raised by NBFCs, Banks, HFCs, FIs	RBI
12	Fixed Deposits raised by corporates other than NBFCs, Banks, HFCs, FIs	MCA
13	Inter Corporate Deposits/Loans extended by Corporates	MCA
14	Borrowing programme ³	-
15	Issuer Ratings ⁴	-
16	Credit Ratings for Capital Protection Oriented Schemes (by Mutal Funds and AIFs)	SEBI
17	Credit quality ratings (CQRs) for Mutual Fund Schemes and Schemes of AIFs	SEBI
18	Listed Security Receipts	SEBI
19	Unlisted Security Receipts	RBI
20	Independent Credit Evaluation (ICE)	RBI
21	Expected Loss Ratings (For Loan Facilities [Fund/Non-Fund based] from Banks/NBFCs/NHB/FIs)	RBI
22	Expected Loss Ratings (Listed / Proposed to be listed Bonds / Debentures / Preference Shares (all securities))	SEBI
23	Expected Loss Ratings (Unlisted / Proposed to be unlisted Bonds/ Debentures / Preference Shares (all securities))	MCA
24	Unlisted PTCs / Securitisation Notes (originated by entities not regulated by RBI) ¹	Investor-side Regulator such as IRDAI, PFRDA ⁵

¹Includes securitisation transactions involving assignee payout, acquirer's payout.

² Includes bank facilities such as liquidity facility, second loss facility that are part of securitisation transactions.
³The rated instrument may involve issuance of different instruments such as debt securities (listed or otherwise), bank loans, commercial paper (listed or otherwise), etc. The regulator of the instrument may accordingly be SEBI, RBI or MCA and can only be determined upon issuance. In Press Release(s) subsequent to issuance(s), Acuite shall separately capture the rated quantum details along with names of respective regulators.
⁴ There is no instrument being rated and hence, Regulator of the Instrument is not applicable. The rating scale and definitions are being followed as stipulated in SEBI Master Circular for CRAs.
⁵ These ratings were assigned during regulatory regime prior to the introduction of SEBI CRA Circular dated Feb 10, 2026 and accordingly, investor side regulators have been included.

B. Other activities:

Sr. No.	Activity Name	Regulator of the activity
1	Monitoring Agency	SEBI
2	Research activities, incidental to rating, such as research for Economy, Industries and Companies ⁶	Not applicable

⁶ permitted by SEBI vide SEBI Master Circular for CRAs.

Disclosure on instruments / activities and names of regulators:

A list of products/activities or ratings of instruments falling under the purview of various financial sector regulators (FSRs) along with the names of respective FSRs has also been duly disclosed by Acuite on its website. A link to the same has been provided below for ready reference:

https://acuite.in/Activities-and-Regulators.html

About Acuité Ratings & Research

Acuité is a full-service Credit Rating Agency registered with the Securities & Exchange Board of India (SEBI). The company received RBI Accreditation as an External Credit Assessment Institution (ECAI) for Bank Loan Ratings under BASEL-II norms in the year 2012. Acuité has assigned ratings to various securities, debt instruments and bank facilities of entities spread across the country and across a wide cross section of industries. It has its Registered and Head Office in Kanjurmarg, Mumbai.

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