| Experienced management and established operational track record
The Deccan Group is promoted by Mr. Ratiram Patil, who possesses extensive experience in the dealership, spare parts distribution, and after-sales service industry. The company commenced operations in Indore and has gradually expanded its footprint across multiple locations, including Surat, Vadodara, Ahmedabad, and Vapi, among others. Over the years, the promoter has also established other group entities engaged in vehicle servicing and maintenance, manpower outsourcing, and utility-related contract services. Backed by the promoter’s industry expertise and the group’s diversified business interests, DSSPL has developed a strong operational presence and longstanding relationships within its areas of operation. The company is expected to continue benefiting from its experienced management team and proven track record in the industry.
Sustained growth in revenue and profitability
The Deccan Group reported healthy growth in its operating income, with revenue increasing to Rs. 511.58 Cr. in FY2026 (Prov.) from Rs. 436.91 Cr. in FY2025, reflecting a y-o-y growth of approximately 17.09 percent. The growth was primarily driven by higher sales and increased after-sales service activities across a diversified portfolio of traded equipment and automotive products, catering to industries such as construction, mining, railways, and automobiles. The company derives a significant portion of its business from key markets in Gujarat, Madhya Pradesh, and Rajasthan. The operating profitability of the group also improved, with the operating margin increasing to 4.69 percent in FY2026 (Prov.) from 4.36 percent in FY2025. The improvement was supported by better absorption of fixed overheads, including administrative, selling, and other operating expenses, on account of higher business volumes. Consequently, the net profit margin improved to 2.39 percent in FY2026 (Prov.) from 2.12 percent in FY2025.Going forward, the group's ability to sustain its revenue growth momentum while maintaining healthy profitability levels will remain a key rating sensitivity factor.
Healthy Financial Risk Profile
The financial risk profile of the Deccan Group remained healthy, characterized by a moderate net worth, low gearing levels, and comfortable debt protection metrics. The tangible net worth improved to Rs. 69.39 Cr. as on March 31, 2026 (Prov.), from Rs. 55.80 Cr. as on March 31, 2025, primarily due to the accretion of profits to reserves. The net worth also includes unsecured loans from directors amounting to Rs. 7.31 Cr., which have been treated as quasi-equity as these loans are subordinated to bank borrowings. Consequently, the gearing ratio improved to 0.70 times as on March 31, 2026 (Prov.), from 0.84 times as on March 31, 2025. The total debt stood at Rs. 48.69 Cr. as on March 31, 2026 (Prov.), comprising long-term bank borrowings of Rs. 4.14 Cr., short-term bank borrowings of Rs. 41.50 Cr., and current maturities of long-term debt (CPLTD) of Rs. 3.01 Cr. The gearing level is expected to improve further and remain comfortable over the medium term in the absence of any significant debt-funded capital expenditure plans. The debt protection metrics also remained comfortable during the year. The interest coverage ratio and DSCR improved to 4.34 times and 2.72 times, respectively, in FY2026 (Prov.), compared to 3.56 times and 1.89 times in FY2025. Further, the Net Cash Accruals to Total Debt ratio improved to 0.30 times in FY2026 (Prov.) from 0.25 times in FY2025. The Total Outside Liabilities to Tangible Net Worth (TOL/TNW) ratio improved to 1.64 times as on March 31, 2026 (Prov.), from 1.85 times as on March 31, 2025. Additionally, the Debt/EBITDA ratio improved to 1.98 times in FY2026 (Prov.) compared to 2.35 times in FY2025, reflecting strengthening debt servicing capability and an overall healthy financial risk profile.
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