Press Release March 25, 2025 J AND K VEHICLEADES PRIVATE LIMITED Rating Assigned

Product	Quantum (Rs. Cr)	Long Term Rating	Short Term Rating
Bank Loan Ratings	46.25	ACUITE BB | Stable | Assigned	-
Bank Loan Ratings	0.50	-	ACUITE A4+ | Assigned
Total Outstanding	46.75	-	-
Total Withdrawn	0.00	-	-

Rating Rationale

Acuite has assigned long term rating at “ACUITE BB” (read as ACUITE Double B) and short term rating at “ACUITE A4+” (read as ACUITE A four plus) for Rs.46.75 Cr. bank loan facilities of J and K Vehicleades Private Limited (JKVPL). The outlook is ‘Stable’. Rationale for rating The rating takes into account the established relationship with Maruti Suzuki India Limited and extensive experience of the promoters in the automobile dealership industry. The rating also factors the steady in the company’s scale of operations, marked by an operating income of Rs.143.82 Cr. in FY2024 as against Rs.120.62 Cr. in FY2023. The EBITDA margin and PAT margin of the company increased and stood at 6.41% and 5.21% respectively in FY2024. Further, the financial risk profile of the company is average as suggested by gearing ratio which stood at 4.11 times as on 31st March 2024 and coverage indicators i.e. interest coverage ratio (ICR) which stood at 1.64 times and debt service coverage ratio (DSCR) which stood at 1.00 times as on 31st March 2024. However, the rating remains constrained by the stretched liquidity profile and intensive working capital operations of the company marked by GCA days of 175 days as on 31st March 2024 and working capital limits at an average of 95.09% for the last six months ended December 2024. In addition, and the rating is partly offset by the operations of the company being vulnerable to the inherent cyclical nature of the automobile industry.

About the Company

J and K Vehicleades Private Limited is a Private Company incorporated in 2001. It is classified as Non-Government Company and is registered at Registrar of Companies, Jammu. The present directors of the company are Mrs. Gunjan Rana, Ms. Ketki Rana. The company is an authorized dealer for the sale of passenger vehicles of Maruti Suzuki India Limited and is engaged in the sale of passenger vehicles, servicing of vehicles and sale of spare parts in Udhampur region.

Unsupported Rating

­Not Applicable

Analytical Approach

­Acuite has considered the standalone business and financial risk profile of J and K Vehicleades Private Limited.

Key Rating Drivers

Strengths

­Long operational track record and experienced management JKVPL has been operating in the vehicle dealership sector for more than two decades. The extensive experience of the management has helped the company establish long-term relations with the Maruti Suzuki India Limited and strengthen its market position in Udhampur region in J &K. The company has an established market position in Udhampur region with a wide distribution network with over 17 showrooms / workshops covering the area including Udhampur, Chenani, Doda, Ramnagar, Katra among others. Acuité believes that the long operational track record of JKVPL and promoters’ extensive understanding and expertise will benefit the company going forward, resulting in steady growth in the scale of operations. Steady Business Risk Profile JKVPL has registered the revenue of Rs.143.82 Cr. in FY2024 as against Rs.120.62 Cr. in FY2023. The operating margin of the company increased and stood at 6.41 per cent in FY2024 as against 5.21 per cent in FY2023. The overall profitability margin stood at 1.51 per cent in FY2024 as against 1.89 per cent in FY2023. The increase in revenue and operating profitability is on an account of the incremental revenue contribution from the spares, accessories and service income alongside cars being sold and steady demand of PV in the domestic market. The improved profitability margins have translated into moderate RoCE levels for the company of 13.02 percent in FY2024 as against 12.23 percent in FY2023. Further, the company has reported a revenue of Rs.122.26 Cr. as on 31st December, 2024. Going forward, Acuite believes that increasing demand for passenger vehicles along with revenue derived from segments including workshop income, sale of spares and accessories shall continue to support the revenue and profitability of JKVPL to an extent and the company will sustain at healthy levels in near to medium term.

Weaknesses

­Intensive Working capital operations The working capital operations of the company is intensive marked by GCA days of 175 days as on 31st March, 2024 as compared to 181 days as on 31st March, 2023. The high GCA is on an account of high debtor days which stood at 109 days as on 31st March 2024 as compared to 126 days in the previous year. The debtor period is high as the company sales vehicles to Army and other Government agencies, from whom the proceeds are sometimes delayed. On the other hand, the creditor days stood at 8 days as on 31st March, 2024 as compared to 4 days as 31st March, 2023. The company has to maintain inventory of all the models of cars for display. The inventory days of the company stood at 71 days as on 31st March, 2024 as compared to 51 days as on 31st March, 2023 on an account of increase in stocking / maintenance of nexa and arena models by the company.  Further, working capital limits stood at an average of 95.09% for the last six months ended December, 2024. Acuité expects that the working capital operations are likely to remain similar range and will be key monitorable in near to medium term. Average Financial Risk Profile The financial risk profile of the company is average, marked by net worth of Rs.14.07 Crore in FY2024 and Rs.11.87 Cr. in FY2023. The increase in the net-worth is on an account of accretion of profits into reserves. Further, the total debt of the company stood at Rs.57.83 Crore as on 31st March, 2024 as against Rs.50.58 Crore as on 31st March, 2023. The capital structure of the company is marked by a high gearing ratio which stood at 4.11 times as on 31st March, 2024 against 4.26 times as on 31st March, 2023. Further, the coverage indicators of the company are reflected by interest coverage ratio and debt service coverage ratio which stood at 1.64 times and 1.00 times respectively as on 31st March, 2024 as against 2.41 times and 2.08 times respectively as on 31st March, 2023. The TOL/TNW ratio of the company stood at 4.48 times as on 31st March, 2024 as against 4.68 times as on 31st March, 2023 and DEBT-EBITDA of the company stood at 6.13 times as on 31st March, 2024 as against 7.87 times as on 31st March, 2023. Acuité believes that going forward the financial risk profile of the company will remain in similar range in near to medium term with no major debt funded capex plans.

Rating Sensitivities

­Sustenance of the profitability margins while scaling up of operations. Working capital cycle.

Liquidity Position

Stretched

­The liquidity profile of the company is stretched with net cash accruals of Rs.2.85 Crore as on 31st March, 2024 against the debt repayment obligation of Rs.2.82 Crore over the same period. Going forward, the company is expected to generate net cash accruals under the range of Rs.3.50 Crore to Rs.5.00 Crore against the debt repayment obligations up to Rs.2.76 Crore over the same period. The working capital limits stood at an average of 95.09% for the last six months ended December 2024. The current ratio of the company stood at 1.24 times as on 31st March 2024 as against 1.26 times as on 31st March 2023. Further, the cash and bank balance available with the company stood at Rs.1.07 Crore as on 31st March, 2024. Acuité believes that going forward the ability of the company to maintain its liquidity position will remain sensitive factor.

Outlook: Stable

­

Other Factors affecting Rating

­None

Key Financials

Particulars	Unit	FY 24 (Actual)	FY 23 (Actual)
Operating Income	Rs. Cr.	143.82	120.62
PAT	Rs. Cr.	2.17	2.28
PAT Margin	(%)	1.51	1.89
Total Debt/Tangible Net Worth	Times	4.11	4.26
PBDIT/Interest	Times	1.64	2.41

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

­None

Interaction with Audit Committee anytime in the last 12 months (applicable for rated-listed / proposed to be listed debt securities being reviewed by Acuite)

Not applicable

Any other information

­None

Applicable Criteria

• Default Recognition :- https://www.acuite.in/view-rating-criteria-52.htm • Application Of Financial Ratios And Adjustments: https://www.acuite.in/view-rating-criteria-53.htm • Trading Entities: https://www.acuite.in/view-rating-criteria-61.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 Date Of Issuance Coupon Rate Maturity Date Quantum (Rs. Cr.) Complexity Level Rating Punjab and Sind Bank Not avl. / Not appl. Bank Guarantee (BLR) Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 0.50 Simple ACUITE A4+ | Assigned Punjab and Sind Bank Not avl. / Not appl. Cash Credit Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 32.50 Simple ACUITE BB | Stable | Assigned State Bank of India Not avl. / Not appl. Channel/Dealer/Vendor Financing Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 10.00 Simple ACUITE BB | Stable | Assigned State Bank of India Not avl. / Not appl. Covid Emergency Line. Not avl. / Not appl. Not avl. / Not appl. 31 Jan 2027 0.86 Simple ACUITE BB | Stable | Assigned Punjab and Sind Bank Not avl. / Not appl. Covid Emergency Line. Not avl. / Not appl. Not avl. / Not appl. 28 Feb 2027 0.19 Simple ACUITE BB | Stable | Assigned Not Applicable Not avl. / Not appl. Proposed Long Term Bank Facility Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 2.70 Simple ACUITE BB | Stable | Assigned

Contacts

Mohit Jain Senior Vice President - Rating Operations Archita Sharma Associate Analyst - Rating Operations	Contact details exclusively for investors and lenders Mob: +91 8591310146 Email ID: analyticalsupport@acuite.in

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.