| Part of strong and reputed Welspun Group
BAPL Rototech Private Limited forms part of the Welspun Group, with its 70 percent shareholding held by Welspun BAPL Private Limited (completely owned by Mr. B.K. Goenka, Trustee of Welspun Group Master Trust). The remaining 30 percent of the shares are held by Rototech SRL, Italy-based group providing its technical knowhow support. Further, established in 1985 by Mr. Balkrishnan Goenka and Mr. Rajesh R. Mandawewala, the Mumbai-headquartered Welspun Group is a diversified conglomerate with a strong track record across sectors such as line pipes, textiles, infrastructure and warehousing. The group has also been expanding its footprint in DI pipes, TMT rebars, stainless steel and alloy products, automotive components, flooring solutions, renewables, green energy, and advanced textiles. Further, the group has a global presence across more than 50 countries and employs over 40,000 people. The key entities of the group include Welspun Corp Limited (WCL), Welspun Living Limited (WLL), and Welspun Enterprises Limited (WEL), having combined market capitalisation of more than Rs. 43,000 Cr. wherein the promoter’s shareholding is worth of almost ~Rs. 23,000 Cr. as on April 15, 2026.
Improving operating performance
Although, the revenue of the company stood moderated at Rs. 293.24 Cr. in FY25 (Rs. 318.92 Cr. in FY24), primarily on account of moderation in the automobile industry in FY25, however, there is improvement in 9MFY26 that stood at Rs. 230.72 Cr. as against Rs. 216.94 Cr. in 9MFY25. Moreover, the company has established its presence in the niche and emerging segment of plastic moulded tanks for automotive purposes and thereby the operating margin remains healthy at 13.88 percent in FY25 (14.19 percent in FY24). Going forward, with the increase in volumes and operating efficiency, the management anticipates continued growth momentum in the operating performance of the company, which shall be a key rating monitorable.
Healthy financial risk profile
The financial risk profile of the company stood healthy marked by moderate net worth, low gearing and healthy debt protection metrics. The net worth of the company stood at Rs. 91.98 Cr. in FY25 (Rs. 71.26 Cr. in FY24), improved on account of accretion of profits to reserves. Further, the debt profile of the company consists of moderate long-term borrowings and financial lease liabilities amounting to Rs. 28.88 Cr. as on March 31, 2025 (Rs. 31.96 Cr. as on March 31, 2024) that has been availed for the capex incurred by the company at different units. Therefore, the gearing (debt/equity) ratio stood below unity at 0.31 times in FY25 (0.45 times in FY24). Moreover, the debt protection metrics stood healthy with interest coverage ratio of 17.16 times in FY25 (17.39 times in FY24) and debt service coverage ratio of 5.46 times in FY25 (8.13 times in FY24). Going forward, in FY26, the debt levels are expected to increase, however, the financial risk profile is expected to remain healthy.
Moderate working capital operations
The working capital operations of the company are moderate marked by gross current assets (GCA) days of 112 days in FY25 (105 days in FY24), majorly driven by debtor levels that stood at 50 days in FY25 (42 days in FY24) with an average credit period of 45 to 60 days extended to its customers. Further, the company maintains inventory days of around two months leading to inventory levels of 60 days in FY25 (62 days in FY24). Moreover, the company receives an average credit period of 90 days from their vendors. Going forward, the working capital operations of the company are expected to remain in similar levels.
|
| Cyclicality associated with automotive industry along with customer concentration risk
The company’s performance remains inherently linked to the cyclical nature of the automotive sector, where demand for auto components is directly influenced by vehicle sales, exposing suppliers to inherent industry fluctuations and the operational resilience of OEMs. Further, the automobile industry primarily moves with larger economic cycle, customer preferences, government policies, etc. Additionally, the company operates in a niche segment of plastic-moulded automobile components, an emerging technology that offers significant weight reduction compared to conventional metal components, thereby enhancing fuel efficiency. However, the pace and extent of adoption of this technology by commercial vehicle OEMs in India will remain a key monitorable. Further, there exist customer concentration risk with one of the top customers contributing ~54 percent of revenue in FY25. Moreover, with the expected increase in electric vehicle penetration, where fuel tanks are not required, the company’s business profile and revenue visibility will remain monitorable.
|
