| Extensive experience of promoters with an established position in the material handling system with a diversified clientele:
The Mecgale group is an established player in the material handling and environmental engineering segment and undertakes turnkey projects for pneumatic conveying systems, ash handling systems, coal handling systems and other bulk material handling solutions. The promoters, Mr. Tapas Sarkar and Mr. Taritkumar Sarkar, have over three decades of experience in the industry. The group's long operational track record has enabled it to establish strong relationships across a diversified customer base and secure repeat business over the years. The group is supported by an experienced technical team, including a dedicated in-house design and engineering function, which strengthens its project execution capabilities. Acuité believes that the group will continue to benefit from its experienced management.
Sustained growth in revenue while maintaining healthy profitability amidst modest operating scale
The group's operating scale remained modest with revenues estimated to improve significantly by around 30.0 percent to Rs.500.68 Cr. in FY2026 (Est.) from Rs.385.21 Cr. in FY2025, supported by healthy order inflows and timely execution of projects. The group's profitability has remained healthy, with EBITDA improving to Rs.83.01 Cr. in FY2026 (Est) from Rs.63.06 Cr. in FY2025. Consequently, EBITDA margin has improved marginally to 16.58 percent in FY2026 (Est.) from 16.37 percent in FY2025. The stable margins are on account of presence in niche engineering solutions and integrated operations. Further, PAT has improved to Rs.60.70 Cr. in FY2026 (Est) from Rs.48.39 Cr. in FY2025, while PAT margin remained at 12.12 percent in FY2026 (Est.) as against 12.56 percent in FY2025. The group reported consolidated revenue of Rs.92.33 Cr. during 3MFY2027, and estimated to end the year with revenue of Rs.570-590 Cr. Further, the group maintained a diversified order book of ~Rs.827 Cr. as on May 31, 2026, providing adequate revenue visibility over the medium term and reflecting its ability to secure orders across end-user industries.
Acuité believes that the group's operating performance would remain healthy over the medium term, supported by its healthy order book position.
Healthy financial risk profile:
Financial risk profile of the group remained healthy marked by comfortable net worth, healthy capital structure and strong debt protection metrics. Group’s net worth improved to Rs.269.62 Cr. as on March 31, 2026 (Est.) from Rs.208.92 Cr. as on March 31, 2025, supported by accretion of profits to reserves. The total debt stood at Rs.27.93 Cr, which consists of long-term debt of Rs.5.97 Cr, short-term debt at Rs.18.51 Cr, unsecured loans of Rs.1.77 Cr. and current maturities of long-term debt of Rs.1.68 Cr. as on March 31, 2026 (Est.) against Rs.20.79 Cr. as on March 31, 2025. The capital structure remained comfortable, as reflected by gearing of 0.10 times as on March 31, 2026 (Est.), which remained at the same level as the previous year. Further, the group's TOL/TNW improved to 0.51 times in FY2026 (Est.) from 0.60 times in FY2025. The debt protection metrics continued to remain strong, with the interest coverage ratio (ICR) and debt service coverage ratio (DSCR) at 33.03 times and 25.16 times respectively, in FY2026 (Est.) against ICR of 32.09 times and DSCR of 24.48 times in FY2025. Further, Debt/EBITDA stood at 0.32 times in FY2026 (Est.) as against 0.30 times in FY2025. The group undertook a capex of approximately Rs.25 Cr. during FY2025 towards strengthening its backward integration initiatives. The capex was funded through a mix of term debt of Rs.17.25 Cr, unsecured loans of Rs.1.77 Cr. and remaining through internal accruals and became operational from June 2026. Acuite believes that the financial risk profile of the company will remain healthy over the medium term on the back of healthy cash accruals despite expected debt infusion for capex.
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| Intensive working capital operations:
The working capital operations of the group remain intensive with high gross current asset (GCA) of 250 days in FY2026(Est) as against 271 days in FY2025. The higher GCA cycle is attributable to elongated debtors days which stood at 180 days in FY2026 (Est) from 175 days in FY2025. The collection cycle remains elongated due to milestone-based billing mechanisms and retention money withheld by customers. The group is required to maintain retention money of around 10 percent of the project value for a defect liability period ranging from 12 to 18 months, which forms part of the receivables. Further, the group's collections are linked to project completion milestones and customer certifications, particularly in turnkey contracts. Creditor days stood at 98 days in FY2026 (Est) and in FY2025, while inventory days improved to 34 days in FY2026 (Est.) from 29 days in FY2025. The group's reliance on working capital borrowings remained moderate, with average fund-based bank limit utilisation of around 81 percent during the six months ended July 2026. Acuite believes that working capital operations of the group will remain intensive over the medium term on account of elongated debtors.
Cash flows dependent on receipt and timely execution of orders in tender bases operations:
The group’s cash flows are exposed to economic spending and receipts of orders. The group is partly dependent on successful bids and the tenders being released in the financial year. However, with the current order book position, the group exhibits healthy revenue visibility for near to medium term. Further, some projects have elongated execution period from 6 months to 18 months thus faces the challenge of timely execution of orders. Acuité believes that it is critical for the group to execute orders in hand within stipulated timelines for sustained performance.
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