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Acuite has upgraded and withdrawn its long-term rating to 'ACUITE BB+' (read as ACUITE double B Plus) from 'ACUITE BB' (read as ACUITE double B) on Rs. 5.50 Cr. bank facilities and reaffirmed and withdrawn the short-term rating at 'ACUITE A4+' (read as ACUITE A four Plus) on the Rs. 24 Cr. bank facilities of Lyophilization Systems India Private Limited (LSIPL). The rating is being withdrawn on account of request received from the issuer, and no objection certificate (NOC) received from the lender.
Further, Acuité has also withdrawn its rating on the proposed long-term bank facility of Rs. 7.50 Cr. of Lyophilization Systems India Private Limited (LSIPL) without assigning any rating as it’s a proposed facility. The rating is being withdrawn on account of request received from the issuer.
The rating withdrawal is in accordance with Acuité's policy on withdrawal of rating as applicable to the respective facility / instrument.
Rationale for rating upgrade
The rating upgrade and migration from 'Issuer non cooperating’ takes into account of comfortable order book position of 1.97 times of FY 26 revenue providing an improved revenue visibility in FY 27 post a moderate decline witnessed in FY26. Further, the rating considers the moderate financial risk profile with minimal debt obligations. Additionally, the company has an established track record and a reputed client base. The rating remains constrained on account of intensive working capital operations and significant dependence on performance of the end user pharma industry.
About the Company
Established in 2003, Hyderabad-based Lyophilization Systems India Private Limited (LSIPL) is engaged in the manufacturing of lyophilizers and their spares, and also provides post-installation services. The company primarily caters to the pharmaceutical industry. The present directors of the company are Mr. Satya Prasad Meka, Mr. Narendar Davanthapuram, Ms. Surya Kumari Meka, and Ms. Kiran Kilaparti.
Unsupported Rating
Not Applicable.
Analytical Approach
Acuité has considered standalone business and financial risk profile of Lyophilization Systems India Private Limited (LSIPL) to arrive at the rating.
Key Rating Drivers
Strengths
Experienced management
The company is supported by a professionally experienced management team. The directors have over three decades of experience in the industrial machinery segment. Their extensive industry knowledge has aided the company in establishing and maintaining strong relationships with customers and suppliers.
Moderate scale of operations supported by comfortable order book
During FY 26 the company reported a revenue of approximately Rs. 152.49 Cr. as compared to Rs. 183.22 Cr. in FY 25. The revenue decline in FY 26 compared to FY 25 majorly due to delay in installations owing to delays at customer’s end. The company has a current outstanding order book of approximately Rs. 300 Cr. as on August 25, 2026 (1.97 times of FY 26 revenue). In Q1FY27, company has already booked revenue of Rs. 51 Cr. The company’s operating margin improved to 16.19% in FY 26 and 15.33 % in FY 25, primarily driven by execution of some specialised projects. Further, the PAT margin improved in FY 26 which stood at 11.73% against 10.40% in FY 25, majorly due to increase in non-operating income during the period.
Moderate financial risk profile
The financial risk profile of the company stood comfortable, marked by growing net worth, low gearing and moderate debt protection metrics. The net worth of the company stood at Rs. 78.41 Cr. in FY 26 compared to Rs. 60.64 Cr. in FY 25. The gearing ratio stood below unity in FY 26.
Furthermore, debt protection metrics stood healthy with interest coverage ratio (ICR) at 26.69 times in FY 26 and 19.65 times in FY 25. The debt service coverage ratio (DSCR) of the company stood at 7.12 times in FY 26 and 6.59 times in FY 25. The Debt-to-EBITDA ratio of the company stood low at 0.15 times in FY 26 and 0.36 times in FY 25.
Weaknesses
Intensive working capital management
The working capital operations of the company are intensive, marked by gross current assets (GCA) days of 323 days in FY 26, as against 229 days in FY 25. The elevated GCA days is primarily attributable to high inventory days, which stood at 206 days in FY 26 as compared to 150 days in FY 25, due to increase in work in progress consisting of pending orders to be billed. The debtor collection period stood at 62 days in FY 26, similar level as compared to FY 25. The company has general terms of credit from its suppliers is in the range of 30-45 days.
Pharmaceutical industry dependency
The company’s revenue and operating performance are heavily dependent on capital expenditure (capex) cycles within key end-user sectors, particularly the pharmaceutical industry. This vulnerability was highlighted in FY26, when clients request to delay equipment installations caused a direct decline in company revenue. Consequently, any future volatility, budget shifts, or changing project timelines within these primary customer industries may adversely impact the company’s financial outcomes.
Rating Sensitivities
Potential triggers (individual or collective) for an upward rating action:
Not Applicable.
Potential triggers (individual or collective) for a downward rating action:
Not Applicable.
Liquidity Position
Adequate
The company’s liquidity position is adequate marked by sufficient net cash accruals of Rs. 19.47 Cr. in FY 26 as against nominal maturing debt repayment obligations of Rs. 1.87 Cr. for the same period. The current ratio stood comfortable at 1.56 times in FY 26. Further, the unencumbered cash and bank balances of the company stood healthy at Rs. 29.51 Cr. as on March 31, 2026. Additionally, the company has not utilized its working capital bank limits in the past 6 months. However, its bank guarantee (BG) limits are currently fully utilized.
Outlook:
Not Applicable.
Other Factors affecting Rating
None.
Particulars
Unit
FY 26 (Actual)
FY 25 (Actual)
Operating Income
Rs. Cr.
152.49
183.22
PAT
Rs. Cr.
17.88
19.06
PAT Margin
(%)
11.73
10.40
Total Debt/Tangible Net Worth
Times
0.05
0.17
PBDIT/Interest
Times
26.69
19.65
Status of non-cooperation with previous CRA (if applicable)
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.
Contacts
List of instruments and names of regulators of the instruments
