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
Acuité has upgraded its long-term rating to 'ACUITE BB+’ (read as ACUITE double B plus) from ‘ACUITE D' (read as ACUITE D) and 'ACUITE C '(read as ACUITE C) and the short term rating to 'ACUITE A4+' (read as ACUITE A four plus) from ‘ACUITE D' (read as ACUITE D) and 'ACUITE A4' (read as ACUITE A four) on Rs.100.00 crore of bank facilities of Safety Controls and Devices Limited (SCADL). The outlook is 'Stable'.
Rationale for the rating The rating factors in the completion of the curing period post default event which occurred in February 2026 and subsequently regularised in April 2026. The rating also factors the increase in the company’s scale of operations supported by revenue growth and improvement in profitability margins. The current unexecuted order book remains healthy translating into an OB/OI ratio (Order book/operating income) of 2.80 times as on 31st July 26 providing revenue visibility over the medium term. The ratings also factor in company’s above average financial risk profile marked by increase in net worth, low gearing and moderate debt protection metrics. Acuite notes that the shares of the company were listed on BSE SME platform on 13th April 2026 where the share proceeds were used to repay debt obligation, working capital needs, issue and general corporate expenses. However, the ratings remain constrained by intensive working capital cycle mainly debtor days which will be key monitorable factor and exposure to project execution risks associated with EPC projects, including cost overruns and time delays which can impact cash flows.
About the Company
Uttar Pradesh based Safety Controls and Devices Limited (SCADL) was initially established as a proprietorship concern in 1997 and later got converted into a private limited company in June 2015. Further in October 2023, it got converted into an unlisted public limited company. The company recently was listed in BSE SME in April 2026. The company is engaged in erection of power sub-stations and installation of safety equipment. The company primarily has its presence in Uttar Pradesh and Bihar. The present directors are Mrs. Anjali Chopra, Mr. Rajnish Chopra, Ms. Kamna Sharma, Mr. Tanuj Kumar Saxena and Mr. Abhishek Chopra.
Unsupported Rating
Not Applicable
Analytical Approach
Acuite has considered standalone financial and business risk profile of Safety Controls and Devices Limited (SCADL) to arrive at the rating.
Key Rating Drivers
Strengths
Benefits derived from Experienced promoters
SCDL is promoted by Mr. Rajnish Chopra who is also the Managing Director in the company. He has been associated with the company since inception and has an experience of over one decade in the erection of power sub-stations. He is actively involved in managing the day-to-day affairs of the company along with the support of qualified and experienced professional. Acuite believes that the company will continue to be benefitted by promoters experience over the medium term.
Steady scale of operations and improvement in profitability
The company reported a marginal growth in scale of operations, with revenue increasing to Rs. 117.01 crore in FY2026 from Rs. 102.56 crore in FY2025. The current unexecuted order book remained healthy at Rs. 327.62 crore as on July 31, 2026 (Rs. 314.81 crore as on July 31, 2025), translating to an OB/OI ratio of 2.80 times providing adequate revenue visibility over the medium term. Going forward, the company's ability to secure new orders and execute its existing order book in a timely manner will remain a key rating monitorable. The EBITDA margin improved to 22.58% in FY2026 from 16.61% in FY2025, primarily driven by lower raw material costs. Consequently, the PAT margin improved to 12.33% in FY2026 from 7.45% in FY2025. Acuite believes the scale of operations will improve over the medium term backed by expected timely execution of the order book .
Above average Financial Risk Profile
The financial risk profile of the company is above average marked by increase in net-worth of Rs. 58.76 Crore as on 31st March 2026 against Rs. 40.57 Crore as on 31st March 2025 due to accretion to reserves and infusion of capital. The gearing remained comfortable and stood at 0.84 times as on 31st March 2026 against 0.83 times as on 31st March 2025. Further, the debt protection metrics reflected by interest coverage ratio (ICR) and debt service coverage ratio (DSCR) stood at 2.98 times and 1.34 times respectively as on 31st March 2026 against 2.99 times and 1.52 times respectively as on 31st March 2025. The TOL/TNW ratio of the company stood at 2.33 times as on 31st March 2026 against 1.96 times as on 31st March 2025. Acuite believes that going forward the financial risk profile of the company will continue to remain above average with comfortable capital structure and debt protection metrices over the medium term.
Weaknesses
Intensive ?Working Capital Cycle
The working capital cycle of the company remains intensive as evident from gross current assets (GCA) of 552 days in FY2026 as compared to 356 days in FY2025 primarily due to high receivables. The debtor days stood at 379 days in FY2026 as against 210 days in FY2025, largely on account of retention money withheld by customers, which typically ranges between 15% and 30% of contract value depending on the projects. Inventory days stood at 51 days in FY26 against 51 days in FY25. Whereas, creditor days stood at 249 days in FY2026 against 89 days in FY2025 as payments to suppliers are largely aligned with the receipt of proceeds from customers. Acuite believes that the working capital cycle of the company will remain at similar levels due to the inherent nature of the business.
Highly competitive industry marked by tender based nature of business
The company’s performance is susceptible to the tender based nature of business, where the business depends on the ability to bid for contracts successfully. Risk become more pronounced as tendering is based on minimum amount of biding of contracts. Intense competition from several players, and exposure to risks arising from dependence on tenders. Growth in revenue and profitability depends on the company's ability to bid successfully and executes order within stipulated time frame.
Rating Sensitivities
Potential triggers (individual or collective) for an upward rating action:
Improvement in working capital cycle mainly debtor days.
Potential triggers (individual or collective) for a downward rating action:
Decline in operating margins below 15%.
Further elongation in working capital cycle impacting liquidity position.
Significant delays in execution or cancellation of major orders affecting revenue visibility and cash flows
Liquidity Position
Adequate
The liquidity profile of the company is adequate marked by sufficient net cash accruals of Rs. 14.80 Cr. in FY26 against the debt repayment of Rs. 8.25 Cr. over the same period. The company maintains cash & bank balances of Rs. 0.22 Cr. and current ratio stood moderate at 1.45 times for FY26. The average fund-based and non-fund-based bank limit utilization stood at ~87.98% and ~77.09% respectively for the last 9 months ended July 26. The IPO proceeds of Rs. 48 crores have strengthened the company's liquidity profile aiding in debt repayment, funding of working capital requirements, and general corporate purposes. Acuite believes that the company will continue to have adequate liquidity at the back of heathy cash accruals and absence of debt funded capex plans over the medium term.
Outlook: Stable
Other Factors affecting Rating
None
Particulars
Unit
FY 26 (Actual)
FY 25 (Actual)
Operating Income
Rs. Cr.
117.01
102.56
PAT
Rs. Cr.
14.42
7.64
PAT Margin
(%)
12.33
7.45
Total Debt/Tangible Net Worth
Times
0.84
0.83
PBDIT/Interest
Times
2.98
2.99
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
