Product Quantum (Rs. Cr) (SEBI) Quantum (Rs. Cr) (Other FSR) Long Term Rating Short Term Rating Regulated By
Bank Loan Ratings 0.00 1.80 ACUITE C | Assigned - RBI
Bank Loan Ratings 0.00 4.09 ACUITE C | Downgraded - RBI
Bank Loan Ratings 0.00 8.20 ACUITE D | Assigned - RBI
Bank Loan Ratings 0.00 25.91 ACUITE D | Downgraded - RBI
Total Outstanding 0.00 40.00 - - -
Total Withdrawn 0.00 0.00 - - -
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 downgraded the long-term rating to 'ACUITE D' (read as ACUITE D) from 'ACUITE B+' (read as ACUITE B plus) on the bank facilities of Rs. 25.91 Cr. of Maderu Engineering Private Limited .

Acuite has downgraded the long-term rating to 'ACUITE C' (read as ACUITE C) from 'ACUITE B+' (read as ACUITE B plus) on the Proposed bank facility of Rs. 4.09 Cr. of Maderu Engineering Private Limited .

Acuite has assigned the long-term rating to 'ACUITE D' (read as ACUITE D) on the bank facilities of Rs. 8.20 Cr. of Maderu Engineering Private Limited .

Acuite has assigned the long-term rating to 'ACUITE C' (read as ACUITE C) on the Proposed bank facility of Rs. 1.80 Cr. of Maderu Engineering Private Limited .

Rationale for rating
­The rating downgrade takes into account the  poor liquidity position of the company resulting in delays servicing debt obligations.

About the Company
­Bengaluru based Maderu Engineering Private Limited, incorporated in 2021, previously known as Paragon Engineering Works is one of the solution providers and manufacturers of modern-day sheet metal forming in Bangalore.  The company is engaged in Sheet Metal Press Components, Electrical and Electronics, Assemblies and Sub-Assemblies Automotive and Non-Automotive Parts. The company operates as a Tier 1 and Tier 2 OEM supplier within the electronics and automotive sectors. Mr. Gowda Venkate Gowda Mayur and Mr. Munibyregowda Venkate Gowda are the present directors of the company.
 
Unsupported Rating
­Not Applicable
 
Analytical Approach
­Acuite has considered standalone business risk profile and financial risk profile of Maderu Engineering Private Limited to arrive at its rating.
 
Key Rating Drivers

Strengths

­Benefits derived from Experienced management
The operations of the company are managed by Mr. Gowda Venkate, Mr. Gowda Mayur, and Mr. Munibyregowda Venkate Gowda, who possess extensive experience in the automobile components industry. The company caters to a diversified clientele comprising reputed players in the automotive and industrial sectors. Acuité believes that the promoters' industry expertise and long-standing relationships with customers will continue to support the company's business growth and operational stability going forward.


Weaknesses

Declining Revenues and operating profitability
The company's revenue moderated to Rs. 10.42 crore in FY2026 (Prov.) from Rs. 10.39 crore in FY2025, primarily on account of the scaling down of production during the ongoing capex implementation. The company reported revenue of Rs. 5.50 crore during 3MFY2027. The operating profitability has decreased to 13.33 percent as on March 31, 2026(Prov.) as compared to 15.11 percent as on March 31, 2025. The decline in margins was primarily due to the company incurring significant setup costs for its new manufacturing facility and higher expenses arising from the temporary outsourcing of certain production processes to external vendors.
 Below Average Financial Risk Profile
The financial risk profile of the company is below average marked by moderate net worth, high gearing and moderate debt protection metrics.  The net worth of the company improved to Rs. 7.62 crore as on March 31, 2026 (Prov.) from Rs. 3.23 crore as on March 31, 2025, primarily driven by the infusion of equity share capital amounting to Rs. 4.32 crore, along with accretion to reserves. Gearing stood at 5.19 times as on March 31, 2026(Prov.) as against 7.74 times as on March 31,2025. The Total Outside Liabilities/Tangible Net Worth (TOL/TNW) stood at 5.71 times as on March 31, 2026(Prov) as compared to 8.48 times as on March 31,2025. The debt protection metrics is marked by Interest Coverage Ratio at 1.34 times as on March 31, 2026(Prov) as compared to 1.32 times as on March 31,2025 and Debt Service Coverage Ratio at 0.99 times as on March 31, 2026(Prov.) as compared to 1.08 times as on March 31,2025. Net Cash Accruals/Total Debt (NCA/TD) stood at 0.01 times as on March 31, 2026(Prov.) as compared to 0.01 times as on March 31,2025. Acuité believes that going forward the financial risk profile will remain same over the medium term.

Intensive working capital management 
The intensive working capital management is marked by Gross Current Assets (GCA) of 594 days as on March 31, 2026(Prov) as compared to 480 days as on March 31, 2025. The debtor days stood at 59 days as on March 31,2026(Prov) as compared to 53 days as on March 31, 2025. Typically, the credit terms range to about 45-60 days. No advance payments are received. Furthermore, inventory days increased to 530 days as on March 31, 2026 (Prov.) from 490 days as on March 31, 2025. The elevated inventory levels were largely attributable to the maintenance of safety stock, a significant portion of which is generally consumed during the subsequent months of April and May. Additionally, as the company is gradually shifting production lines while ensuring uninterrupted supplies to customers, certain manufacturing stages are being outsourced to external vendors. This has necessitated higher stocking of raw materials and semi-finished goods within the production pipeline, resulting in increased inventory levels. The creditor days stood at 233 days as on March 31, 2026(Prov.) from 117 days as on March 31,2025  Acuité believes that going forward the working capital operations of the company will remain intensive over the medium term.

Time and cost overruns in project
The project experienced significant time and cost overruns due to delays in execution, changes in project scope, and unforeseen operational challenges. These factors resulted in an extension of the project timeline and an increase in overall expenditure beyond the initial estimates. Consequently, project efficiency was impacted, highlighting the need for stronger planning, monitoring, and risk management practices to minimize such deviations in future projects.

Rating Sensitivities

Potential triggers (individual or collective) for an upward rating action:
­
  • Timely servicing of debt obligations
Potential triggers (individual or collective) for a downward rating action:
­
  • Not applicable
Liquidity Position
Poor

The liquidity is poor, on account of delay in servicing the debt obligations (As evident from Bank statements), also the net cash accruals of Rs 0.32 Cr. in FY2026(Prov.) is tightly matched to repay the long term debt obligation of Rs 0.33 Cr, Further, the current ratio of the company stood comfortable at 1.24 times in FY2026(Prov.). The cash and bank balance stood at Rs. 0.07 Cr. in FY2026(Prov) as against Rs 0.08 Cr. in FY2025. The bank limit of the company has been fully utilized for the last Six months ended June 2026. Moreover, the working capital cycle of the company is intensive marked by Gross Current Assets (GCA) of 594 days for FY2026(Prov) as against 480 days for FY2025. Liquidity is further constrained by the ongoing capex project for the new manufacturing facility, which has witnessed delays due to the addition of a supporting production line and production modifications undertaken to cater to evolving customer requirements.

 
Outlook: Not Applicable
­
 
Other Factors affecting Rating
­None
 

Particulars Unit FY 26 (Provisional) FY 25 (Actual)
Operating Income Rs. Cr. 10.42 10.39
PAT Rs. Cr. 0.08 0.07
PAT Margin (%) 0.75 0.66
Total Debt/Tangible Net Worth Times 5.19 7.74
PBDIT/Interest Times 1.34 1.32
Status of non-cooperation with previous CRA (if applicable)
­Not Applicable
 
Any other information
­None
 
Applicable Criteria
• Default Recognition :- https://www.acuite.in/view-rating-criteria-52.htm
• Manufacturing Entities: https://www.acuite.in/view-rating-criteria-59.htm
• Application Of Financial Ratios And Adjustments: https://www.acuite.in/view-rating-criteria-53.htm
Note on complexity levels of the rated instrument

Date Name of Instruments/Facilities Term Amount (Rs. Cr) Rating/Outlook
30 Apr 2025 Proposed Long Term Bank Facility Long Term 4.09 ACUITE B+ | Stable (Assigned)
Term Loan Long Term 16.91 ACUITE B+ | Stable (Assigned)
Secured Overdraft Long Term 9.00 ACUITE B+ | Stable (Assigned)
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Lender’s Name ISIN Facilities Listing Status Regulated By Date Of Issuance Coupon Rate Maturity Date Quantum
(Rs. Cr.)		 Complexity Level Rating
Not Applicable Not avl. / Not appl. Proposed Long Term Bank Facility Unlisted RBI Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 4.09 Simple ACUITE C | Downgraded ( from ACUITE B+ )
Not Applicable Not avl. / Not appl. Proposed Long Term Bank Facility Unlisted RBI Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 1.80 Simple ACUITE C | Assigned
Canara Bank Not avl. / Not appl. Secured Overdraft Unlisted RBI Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 9.00 Simple ACUITE D | Downgraded ( from ACUITE B+ )
Canara Bank Not avl. / Not appl. Term Loan Unlisted RBI 12 Dec 2024 Not avl. / Not appl. 12 Nov 2036 16.91 Simple ACUITE D | Downgraded ( from ACUITE B+ )
Canara Bank Not avl. / Not appl. Term Loan Unlisted RBI 14 Oct 2025 Not avl. / Not appl. 14 Jan 2037 8.20 Simple ACUITE D | Assigned
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.
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