Press Release

Press Release

October 07, 2026

AVANTEL LIMITED
Rating Assigned and Reaffirmed

Product	Quantum (Rs. Cr) (SEBI)	Quantum (Rs. Cr) (Other FSR)	Long Term Rating	Short Term Rating	Regulated By
Bank Loan Ratings	0.00	74.44	ACUITE A- \| Stable \| Assigned	-	RBI
Bank Loan Ratings	0.00	59.00	ACUITE A- \| Stable \| Reaffirmed	-	RBI
Bank Loan Ratings	0.00	50.00	-	ACUITE A2+ \| Assigned	RBI
Bank Loan Ratings	0.00	75.50	-	ACUITE A2+ \| Reaffirmed	RBI
Total Outstanding	0.00	258.94	-	-	-
Total Withdrawn	0.00	0.00	-	-	-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 reaffirmed its long-term rating of 'ACUITE A-' (read as ACUITE A minus) and short-term rating of 'ACUITE A2+' (read as ACUITE A two plus) on Rs. 134.50 Cr. bank facilities of Avantel Limited (AL). The outlook is 'Stable'.

Acuite has assigned the long-term rating of 'ACUITE A-' (read as ACUITE A minus) and short-term rating of 'ACUITE A2+' (read as ACUITE A two plus) on Rs. 124.44 Cr. bank facilities of Avantel Limited (AL). The outlook is 'Stable'.

Rationale for rating:
The rating reaffirmation reflects the moderation in operating performance with recovery expected in FY2027 backed by AL's healthy unexecuted order book of ~Rs.1,021 Cr., providing strong medium-term revenue visibility. The rating also factors in the company's established presence in the defence communication and satellite communication equipment segment, healthy financial risk profile and adequate liquidity position. The rating remains constrained by the intensive working capital operations, concentrated order book position and exposure to defence procurement and execution cycles.

About the Company

Avantel Limited was set up in 1990 in Hyderabad as a private limited company by Dr. A. Vidyasagar along with his family members and was reconstituted as a public limited company in 1994. The company specialises in RF microwave subsystems, digital radios, and satellite communication systems, and offers related software solutions and services. It is listed on the BSE and National Stock Exchange. The company has its manufacturing facility and R&D facility at Visakhapatnam and Hyderabad.

Unsupported Rating

Not applicable

Analytical Approach

Acuité has considered the standalone business and financial risk profiles of Avantel Limited to arrive at the rating.

Key Rating Drivers

Strengths

Established track record of operations and experienced management
AL has an established track record of over three decades in the design, development and manufacture of communication and electronic systems catering to defence and strategic-sector applications. The company is promoted by Dr. A Vidyasagar, Mrs. A Sarada and Mr. A Siddhartha Sagar, who oversee the strategic and operational functions of the business. Over the years, the company has developed capabilities across multiple product verticals, including satellite communication systems, software defined radios, radar systems, ground stations and network management solutions, supported by its in-house R&D infrastructure, which have enabled the company to secure repeat orders from various defence and space segment customer. Acuité believes the company's established execution track record, experienced management and long-standing customer relationships will benefit the company's business risk profile.

Moderation in revenue and profitability in FY2026, recovery expected in current fiscal supported by healthy order book position
AL’s operating performance moderated during FY2026, with operating income declining by around 10.92 percent to Rs.221.35 Cr. from Rs.248.48 Cr. in FY2025, primarily due to delays in order finalisation and execution during the year. The moderation in revenue, coupled with execution of relatively lower-margin orders and higher overhead costs, resulted in a decline in profitability, with EBITDA margin moderating to 24.40 percent from 38.61 percent in FY2025 and PAT margin declining to 10.16 percent from 24.11 percent. However, the company's performance improved in Q1FY2027, with revenue increasing by around 35.3 percent to Rs.70.12 Cr. from Rs.51.84 Cr. in Q1FY2026. EBITDA improved to Rs.19.26 Cr. from Rs.11.41 Cr., while EBITDA margin increased to 27.47 percent from 22.00 percent. PAT also improved to Rs.7.62 Cr. from Rs.4.63 Cr., indicating improved order execution and an expected improvement in operating performance during the current fiscal. Further, the company has a healthy unexecuted order book of around Rs.1,021 Cr. as on September 22, 2026, comprising manufacturing, AMC and service contracts, which provides strong medium-term revenue visibility. The sizeable order backlog is expected to support revenue generation over the next 18-24 months, subject to timely execution of orders and customer acceptance milestones. Acuité believes that continued execution of the existing order book and timely receipt of fresh orders will remain critical for sustaining the recovery in operating performance.

Healthy financial risk profile:
AL's financial risk profile remained healthy in FY2026, supported by a healthy net worth, low gearing and healthy debt protection metrics. The company's net worth improved significantly to Rs.356.50 Cr. as on March 31, 2026 from Rs.248.01 Cr. as on March 31, 2025, driven by equity infusion of approximately Rs.83.30 Cr. comprising Rs.4.19 Cr. towards share capital and Rs.79.10 Cr. towards securities premium and also due to profits retention. Total debt (comprising long-term debt of Rs.12.33 Cr, short-term debt of Rs.13.72 Cr. and current maturities of long-term debt of Rs.8.33 Cr.) increased to Rs.34.37 Cr. as on March 31, 2026 from Rs.26.33 Cr. as of previous year end, primarily on account of the term loan availed towards the capacity expansion undertaken during the year. However, the capital structure remained comfortable, with gearing at 0.10 times as on March 31, 2026 (0.11 times as on March 31, 2025), while TOL/TNW remained stable at 0.20 times for past two years. Debt protection metrics moderated owing to lower profitability during FY2026, however, remained healthy with the Interest Coverage Ratio (ICR) of 9.91 times and debt service coverage (DSCR) of 8.20 times in FY2026 compared to ICR of 32.01 times and DSCR of 24.49 times in FY2025. Debt to EBITDA stood at 0.62 times in FY2026 from 0.27 times in FY2025. Acuité believes the financial risk profile will remain healthy over the medium term, supported by its strong net worth base.

Weaknesses

Intensive working capital operation:
AL's working capital operations remained intensive in nature, as reflected by Gross Current Assets (GCA) of 342 days in FY2026 as against 234 days in FY2025. The elongation in GCA was primarily driven by elevated inventory levels, with inventory days increasing to 200 days in FY2026 from 144 days in FY2025, on account of the procurement and stocking of raw materials and work-in-progress for the execution of ongoing defence contracts. Accordingly, inventory levels increased to Rs.91.48 Cr. as on March 31, 2026 from Rs.60.03 Cr. as on March 31, 2025. Further, debtor days stood at 117 days in FY2026 as against 104 days in FY2025, reflecting the milestone-based billing and collection cycle associated with defence and government contracts. Creditor days stood at 9 days in FY2026 as compared to 11 days in FY2025. The fund-based working capital limits were moderately utilised, with average utilisation of around 39 percent during the six-month period ended August 2026.
Acuité believes the working capital operations are likely to remain intensive over the medium term, considering the long execution cycles, inventory requirements and customer acceptance-linked billing mechanisms inherent to the defence sector.

Customer concentration in order book
The company's executable order book exhibits customer concentration, with around 44 percent portion attributable to a single customer. This exposes the company to customer-specific execution and order concentration risks. However, the risk is partially mitigated by the strategic nature of the underlying orders, the company's established execution track record and the presence of orders from multiple defence and strategic-sector customers across its broader order book.

Exposure to defence procurement and execution cycles:
The company's business profile remains exposed to the procurement and execution cycles of defence and strategic-sector customers, resulting in dependence on tender awards, approval timelines and project implementation schedules. Any delays in these processes could impact revenue growth and profitability. However, the risk is partially mitigated by the company's established customer relationships and healthy order book position.

ESG Factors Relevant for Rating

The company has established a Risk Management Committee that oversees environmental and sustainability-related matters. As part of its Corporate Social Responsibility (CSR) initiatives, the company regularly contributes towards healthcare activities, in line with the recommendations of its CSR Committee. In compliance with SEBI (Listing Obligations and Disclosure Requirements) Regulations, the company has constituted several committees including the Audit Committee, Nomination and Remuneration Committee, Corporate Social Responsibility Committee, Risk Governance and Management Committee, and Stakeholders’ Relationship Committee, thereby ensuring adherence to corporate governance practices.

Rating Sensitivities

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

Significant improvement in revenues leading to scaling up of operations with revenues of over Rs. 400 Cr while improving profitability.
Timely execution of the existing order book and healthy accretion of new orders.
Improvement in working capital cycle
Sustenance of healthy financial risk profile

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

Significant decline in revenues and profitability with net cash accruals falling below Rs. 45 Cr consistently
Any further elongation in working capital cycle resulting in higher reliance on external borrowings.
Deterioration in financial risk profile due to debt-funded expansion

Liquidity Position

Adequate

The company’s liquidity position is adequate, marked by healthy net cash accruals of Rs.40.53 Cr. in FY2026 against the nil repayment obligations. Going forward, the company is expected to register NCA of Rs.55.97 Cr. for FY2027 and Rs.59.69 Cr. in FY2028, which would comfortably meet the repayment obligations of Rs.8.33 Cr. and Rs.7.50 Cr. for FY2027 & FY2028, respectively. The working capital operations of the company are intensive with GCA of 342 days in FY2026, the current ratio stood at 3.57 times as on March 31, 2026. The fund based working capital limits were utilized at an average of 39 percent over the past 6 months ending August 2026. The unencumbered cash and bank balances stood at Rs.5.48 Cr. as on March 31, 2026 providing additional liquidity comfort. Acuité believes that the liquidity position of the company will remain adequate over the medium term on account of stable accrual generation, cushion available in the fund-based working capital limits.

Outlook: Stable

Other Factors affecting Rating

None

Key Financials

Particulars	Unit	FY 26 (Actual)	FY 25 (Actual)
Operating Income	Rs. Cr.	221.35	248.48
PAT	Rs. Cr.	22.50	59.92
PAT Margin	(%)	10.16	24.11
Total Debt/Tangible Net Worth	Times	0.10	0.11
PBDIT/Interest	Times	9.91	32.01

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
• Manufacturing Entities: https://www.acuite.in/view-rating-criteria-59.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

Date	Name of Instruments/Facilities	Term	Amount (Rs. Cr)	Rating/Outlook
05 Sep 2025	Cash Credit	Long Term	12.00	ACUITE A- \| Stable (Reaffirmed)
	Stand By Line of Credit	Long Term	5.00	ACUITE A- \| Stable (Assigned)
	Cash Credit	Long Term	20.00	ACUITE A- \| Stable (Assigned)
	Letter of Credit	Short Term	2.00	ACUITE A2+ (Reaffirmed)
	Bank Guarantee (BLR)	Short Term	25.00	ACUITE A2+ (Assigned)
	Bank Guarantee (BLR)	Short Term	55.50	ACUITE A2+ (Reaffirmed)
	Channel/Dealer/Vendor Financing	Short Term	15.00	ACUITE A2+ (Assigned)
18 Jun 2025	Cash Credit	Long Term	12.00	ACUITE A- \| Stable (Reaffirmed)
	Bank Guarantee (BLR)	Short Term	55.50	ACUITE A2+ (Reaffirmed)
	Letter of Credit	Short Term	2.00	ACUITE A2+ (Reaffirmed)
20 Mar 2024	Cash Credit	Long Term	27.50	ACUITE A- \| Stable (Reaffirmed)
	Bank Guarantee (BLR)	Short Term	27.90	ACUITE A2+ (Reaffirmed)
	Bank Guarantee (BLR)	Short Term	12.10	ACUITE A2+ (Assigned)
	Letter of Credit	Short Term	2.00	ACUITE A2+ (Reaffirmed)
06 Mar 2024	Cash Credit	Long Term	27.50	ACUITE A- \| Stable (Upgraded from ACUITE BBB+ \| Stable)
	Bank Guarantee (BLR)	Short Term	27.90	ACUITE A2+ (Upgraded from ACUITE A2)
	Letter of Credit	Short Term	2.00	ACUITE A2+ (Upgraded from ACUITE A2)

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
Canara Bank	Not avl. / Not appl.	Bank Guarantee (BLR)	Unlisted	RBI	Not avl. / Not appl.	Not avl. / Not appl.	Not avl. / Not appl.	33.50	Simple	ACUITE A2+ \| Reaffirmed
State Bank of India	Not avl. / Not appl.	Bank Guarantee (BLR)	Unlisted	RBI	Not avl. / Not appl.	Not avl. / Not appl.	Not avl. / Not appl.	25.00	Simple	ACUITE A2+ \| Reaffirmed
State Bank of India	Not avl. / Not appl.	Bank Guarantee (BLR)	Unlisted	RBI	Not avl. / Not appl.	Not avl. / Not appl.	Not avl. / Not appl.	50.00	Simple	ACUITE A2+ \| Assigned
State Bank of India	Not avl. / Not appl.	Cash Credit	Unlisted	RBI	Not avl. / Not appl.	Not avl. / Not appl.	Not avl. / Not appl.	20.00	Simple	ACUITE A- \| Stable \| Reaffirmed
Canara Bank	Not avl. / Not appl.	Cash Credit	Unlisted	RBI	Not avl. / Not appl.	Not avl. / Not appl.	Not avl. / Not appl.	34.00	Simple	ACUITE A- \| Stable \| Reaffirmed
State Bank of India	Not avl. / Not appl.	Cash Credit	Unlisted	RBI	Not avl. / Not appl.	Not avl. / Not appl.	Not avl. / Not appl.	40.00	Simple	ACUITE A- \| Stable \| Assigned
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 A2+ \| Reaffirmed
Canara Bank	Not avl. / Not appl.	Letter of Credit	Unlisted	RBI	Not avl. / Not appl.	Not avl. / Not appl.	Not avl. / Not appl.	2.00	Simple	ACUITE A2+ \| Reaffirmed
State Bank of India	Not avl. / Not appl.	Stand By Line of Credit	Unlisted	RBI	Not avl. / Not appl.	Not avl. / Not appl.	Not avl. / Not appl.	5.00	Simple	ACUITE A- \| Stable \| Reaffirmed
State Bank of India	Not avl. / Not appl.	Term Loan	Unlisted	RBI	23 Dec 2025	Not avl. / Not appl.	31 Mar 2029	25.00	Simple	ACUITE A- \| Stable \| Assigned
Canara Bank	Not avl. / Not appl.	Working Capital Term Loan	Unlisted	RBI	29 Jun 2026	Not avl. / Not appl.	30 Jun 2031	6.30	Simple	ACUITE A- \| Stable \| Assigned
State Bank of India	Not avl. / Not appl.	Working Capital Term Loan	Unlisted	RBI	03 Jul 2026	Not avl. / Not appl.	30 Jun 2031	3.14	Simple	ACUITE A- \| Stable \| Assigned

Contacts

Mohit Jain
Chief Analytical Officer - Rating Operations

Katta Akhil
Senior 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 ⁶	RBI
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 a	Fixed Deposits raised by NBFCs, HFCs, FIs	RBI
11 b	Fixed Deposits raised by Banks ⁷	+
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 ⁶	RBI
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) ⁷	+
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.
⁶ By virtue of the instrument being listed, SEBI acts as the regulator for listing and related issues.
⁷ To be finalized following a discussion with the regulatory authorities.

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 ⁸	Not applicable

⁸ 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.

Disclaimer: An Acuité rating does not constitute an audit of the rated entity and should not be treated as a recommendation or opinion that is intended to substitute for a financial adviser's or investor's independent assessment of whether to buy, sell or hold any security. Ratings assigned by Acuité are based on the data and information provided by the issuer and obtained from other reliable sources. Although reasonable care has been taken to ensure that the data and information is true, Acuité, in particular, makes no representation or warranty, expressed or implied with respect to the adequacy, accuracy or completeness of the information relied upon. Acuité is not responsible for any errors or omissions and especially states that it has no financial liability whatsoever for any direct, indirect or consequential loss of any kind, arising from the use of its ratings. Ratings assigned by Acuité are subject to a process of surveillance which may lead to a revision in ratings as and when the circumstances so warrant. Please visit our website (www.acuite.in) for the latest information on any instrument rated by Acuité. Please visit https://www.acuite.in/faqs.htm to refer FAQs on Credit Rating.

Note: None of the Directors on the Board of Acuité Ratings & Research Limited are members of any rating committee and therefore do not participate in discussions regarding the rating of any entity.