Established track record of operations supported by improvement in the business risk profile :
AG, incorporated in 1996 by Mr. Anil Anand and Mr. Rajan Sharma, has an established presence in the automotive components industry backed by over four decades of promoter experience. AG is the sole supplier of complete motorcycle wheel assemblies and footrest brake assemblies for Yamaha’s Surajpur plant. Furthermore, AG is expanding their business domestically as well as internationally also. Apart from Yahama India, AIts clientele includes leading OEMs such as Motherson Sumi, Royal Enfield, Maruti Suzuki, and Honda India, along with recent diversification into emerging sectors like EVs, robotics, and LED lighting systems for automotive applications. Acuite believes AG’s long-standing track record and experienced management will continue to support its business growth and diversification.

Moderate Financial Risk profile:
AG’s financial risk profile is marked by Moderate net worth and comfortable debt protection metrics. AG’s net worth stood at Rs. 43.42 Cr. as on 31st March 2025 as against Rs.40.01 Cr. as on 31st March 2024. Group follows conservative leverage policy. Gearing levels (debt-to-equity) improved and stood at 0.49 times as on March 31, 2025 as against 0.64 times in FY 2024. Total debt of Rs.21.18 crore comprise of long-term debt of Rs.4.12 crore, short term debt of Rs.14.10 crore, CPLTD of Rs.2.90 crore and USL of Rs.0.06 crore. Debt Protection metrics stood stable with ICR and DSCR stood at 6.92 times and 2.08 times in FY 2025 as compared to 4.81 times and 1.39 times in FY 2024. TOL/TNW and Debt/EBITDA stood at 2.40 times and 1.56 times in FY 2025. Acuite expects, AG’s financial risk profile will remain moderate over the medium term in absence of any debt funded capex plan.

Moderate Working Capital Management with marginal improvement
AG’s working capital management reflecting marginal improvement in GCA days stood at 62 days in FY 25 as compared 71 days in FY 24. Debtor days stood at 42 days in FY 2025 as against 43 days in FY 2024. Average credit period given to customer are 60 days. Around 93% debtors stood at <30 days bracket. Inventory days stood at 15 days in in FY 25 as against 16 days in FY 24. Creditor days also improved to 54 days in FY 25 from 65 days in FY 24. Acuite believes, working capital management of AG group may improve by constant monitoring collection receivables.

Improvement in Operating performance with decline in Profitability:
AG Group’s operating income improved to Rs.468.28 crore in FY25 from Rs.447.62 crore in FY24, supported by higher demand in the automobile sector, with revenue of Rs.234.47 crore recorded in HYFY26. However, despite topline growth, operating margins declined to 2.84% in FY25 from 3.03% in FY24 due to increased raw material and employee costs, while PAT margin also moderated to 0.77% from 1.07% in the previous year. Under the group structure, AACPL operates under a fixed-margin arrangement with Yamaha India, limiting flexibility and making profitability sensitive to input cost fluctuations, whereas AAPL’s activity-based pricing model offers better cost recovery and higher margins, especially in exports. Acuite believes that while the group’s established relationships and diversified client base provide revenue stability, margin pressures remain a key monitorable.

Highly fragmented and competitive nature of industries
The rating continues to reflect the highly competitive and fragmented nature of the automotive components industry. Acuité believes that sustained improvement in AG’s profitability margins over the medium term shall be instrumental in improving the group’s business risk profile.