| Experienced management and established track record of operations
PML, operational since 1960, has built a strong and long-standing presence in both domestic and international markets, including the USA, Europe and Brazil. The promoter, Mr. Sharad Taparia, Managing Director, brings nearly 27 years of experience in the magnet industry and is supported by a well-qualified and experienced second line of management, which enhances the group’s operational robustness. The management’s extensive industry experience has enabled PML to sustain long-standing relationships with key customers and suppliers, several of whom it has been associated with for more than two to three decades. The growth prospects are expected to strengthen further with anticipated improvement in trade conditions following the conclusion of the US–India Trade Agreement, which is likely to support export opportunities for the group. Additionally, the recently concluded capex is expected to translate into revenue growth as new capacities ramp up. The rising manufacturing and sale of electric vehicles in India and major global markets is also expected to augment demand for the group’s product portfolio, thereby improving medium-term business prospects.
Acuite believes that the group’s experienced management, established operational track record and favourable industry dynamics will continue to support its business risk profile over the medium term.
Stable business risk profile driven by ongoing capacity augmentation and diversified product mix
The group’s revenue remained rangebound at Rs. 205.38 crore in FY25, compared to Rs. 202.01 crore in FY24. This was due to the stagnation in the smart meter segment, arising from slower-than-anticipated order inflow from key customers, along with a shift in product mix within the electric vehicles segment. However, in 9MFY26, the group reported revenue of Rs. 158.73 crore as against Rs. 152.62 crore in 9MFY25. The group further expects its topline to increase by around 8 to 10 per cent in FY26. From FY27 onwards, revenue and overall profitability are expected to improve with the full operationalisation of the capex undertaken during FY25 and FY26. With new capacity added for automotive parts and the alloys segment operating at around 34 per cent utilisation in 6MFY26, the group is positioned for improved revenue performance. Incremental growth is expected to be supported by higher automotive parts contribution and strengthening demand in the alloys segment. Furthermore, the introduction of latching relays in the smart meter segment is expected to support improvement in operating margins, as these are higher value products compared to shunts and current transformers. The group’s operating profit margin moderated to 15.78 per cent in FY25 from 18.33 per cent in FY24 due to higher raw material costs and increased operating expenses. The net profit margin also declined to 7.67 per cent in FY25 from 10 per cent in FY24, primarily on account of higher depreciation costs incurred during FY25.
Acuite believes that the group’s revenues are likely to improve in the near to medium term, with profitability expected to gradually improve on the back of ongoing capacity augmentation and the product mix shifts toward better margin offerings.
Healthy financial risk profile
The financial risk profile of the group remains healthy, supported by a healthy net worth base, comfortable debt protection metrics and low gearing. The group’s net worth stood at Rs. 143.83 crore as on 31 March 2025, an increase from Rs. 129.67 crore as on 31 March 2024, on account of profit accretion to reserves. The group continues to follow a conservative leverage policy, reflected in its gearing of 0.17 times as on 31 March 2025 as against 0.19 times in the previous year. The total debt of Rs. 23.82 crore as on FY2025 comprises Rs. 16.57 crore of long-term borrowings, Rs. 1.10 crore of short-term debt and Rs. 6.15 crore of maturing obligations. The Total Outside Liabilities to Tangible Net Worth (TOL/TNW) ratio remained low at 0.33 times in FY2025, improving from 0.46 times in FY2024. The Debt/EBITDA ratio stood at 0.69 times as on 31 March 2025 compared with 0.63 times a year earlier. Debt protection indicators remain comfortable, with an interest coverage ratio of 14.14 times in FY2025. The debt service coverage ratio stood at 4.39 times in FY2025 as against 7.67 times in FY2024. The group undertook sizeable capex in FY25 and FY26 to support capacity expansion and business diversification. In FY25, it incurred Rs. 26.55 crore, including Rs. 17.50 crore for land funded through internal accruals and the balance for machinery financed by term loan. In FY26, it invested Rs. 3 crore in the latching relays segment, with an additional Rs. 5–7 crore planned, and Rs. 12–13 crore for upgrading the vacuum induction melting furnace, fully funded through internal accruals. These expansion initiatives are expected to enhance capacity, improve operational efficiency and further support the sustenance of its healthy financial risk profile.
Acuite believes that the financial risk profile of the group will continue to remain healthy on the back of steady accruals despite debt funded capex.
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| Working capital intensive operations
The working capital operations of the group remain intensive, reflected in its high Gross Current Assets (GCA) of 196 days as on 31 March 2025, similar to the previous year. The elevated GCA continues to be driven primarily by higher inventory levels. Inventory days stood at 114 days in FY25 as against 121 days in FY24, with the group’s average inventory holding typically ranging between 130–150 days. Debtor days stood rangebound at 73 days as on 31 March 2025 compared with 75 days as on 31 March 2024. The group generally extends a credit period of 60– 90 days to its customers. Creditor days stood at 68 days in FY25 as against 87 days in FY24. The company is required to make advance payments to certain domestic suppliers, while for others, the credit period ranges from 60–90 days. For imports, payments are routed through letters of credit (LCs) with a tenure of up to 180 days. However, the average utilisation of fund-based working capital limits remained low at ~6.20 per cent, while utilisation of non-fund-based limits stood at ~36.41 per cent for the six months ended December 2025.
Acuite believes that the ability of the group towards improving its working capital cycle in near to medium term will remain a key rating monitorable.
Susceptibility of profitability to volatility in raw material prices in a highly competitive and fragmented Industry
The company operates in a highly competitive and fragmented industry, facing intense competition from both organised and unorganised players. PML is also exposed to volatility in raw material prices, which can weigh on its operating margins. In addition, fluctuations in foreign exchange rates pose a risk to profitability; however, the presence of a natural hedge provides partial mitigation against forex-related exposures.
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