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 reaffirmed its long term rating of 'ACUITE BBB' (read as ACUITE triple B) and the short term rating of 'ACUITE A3+' (read as ACUITE A three plus) on the Rs. 170.00 Cr. bank facilities of Saraf Corporation India Private Limited (SCIPL). The outlook remains 'Stable'
Further, Acuite has assigned its long term rating of 'ACUITE BBB' (read as ACUITE triple B) and the short term rating of 'ACUITE A3+'(read as ACUITE A three plus) on the Rs. 144.50 Cr. bank facilities of Saraf Corporation India Private Limited (SCIPL). The outlook is 'Stable'
Rationale for rating
The reaffirmation factors the growing scale of operations of SCIPL supported by the robust orderbook position. The profitability margins have improved significantly and stood healthy at 35.15 percent in FY2026 (Prov.) The rating also factors the company's growing networth and moderate financial risk profile despite significant increase in debt levels in FY2026 and expected increase in FY2027 owing to vessel purchase capex. However, the presence of an escrow mechanism and maintenance of debt service reserve account (DSRA) balance of 3 months against the existing long-term debt provides liquidity cushion. However, the rating continues to remain constrained due to the customer concentration risk and tender based nature of operations of the company.
About the Company
Incorporated in 2006, Mumbai based Saraf Corporation India Private Limited (SCIPL) is engaged in providing catering, housekeeping, painting & fabrication services, EPC, electrical maintenance, plumbing services to onshore and offshore locations of rigs, platforms, vessels, industrial canteens, etc. The operations of SCIPL are overseen by Mr. Deepak Saraf, who is the managing director of the company.
Unsupported Rating
Not Applicable
Analytical Approach
Acuite has considered the standalone business and financial risk profile of Saraf Corporation India Private Limited (SCIPL) to arrive at the rating.
Key Rating Drivers
Strengths
Experienced management and long track record of operations
SCIPL was incorporated by Mr. Deepak Saraf and his family in 2006. The company operates majorly across three segments viz catering & housekeeping, painting services and EPC contracts (involving fabrication and painting works). Historically, the catering segment was the primary revenue source of SCIPL. However, in FY2026 the company has forayed into the EPC segment involving painting and fabrication of offshore rigs and platforms, which involve high value and high margin work contracts. With this, SCIPL plans to focus more towards procurement of such EPC work contracts. The extensive experience of the promoters and established clientele base will support the company to expand their operations.
Growing scale of operations with healthy profitability
The company generated a revenue of Rs. 238.72 Cr. in FY2026 (Prov.) from Rs. 92.19 Cr. in FY2025, majorly on account of company’s entry into the offshore EPC projects, which involves painting and fabrication works. These projects are more technical and therefore generate higher margins as compared to the other segments. The company had also purchased a vessel in FY2026, which had led to a decline in the vessel hiring charges, leading to reduction in the input cost. These have led to significant improvement in the EBITDA margins, which stood at 35.15 percent in FY2026 (Prov.) as against 12.95 percent in FY2025. The company recorded a PAT of Rs. 55.88 Cr. and PAT margin stood at 23.51 percent in FY2026 (Prov.)
Going forward, the regular inflow of new work orders and timely execution at sustained profitability levels will be a key monitorable.
Moderate financial risk profile
The financial risk profile of the company is characterized by growing networth, moderate gearing and healthy debt protection metrics. The networth of the company grew to Rs. 91.96 Cr. in FY2026 (Prov.) post accretion of Rs. 55.88 Cr. PAT to reserves. The gearing increased to 1.44 times in FY2026 (Prov.) from 0.62 times in FY2025 on account of addition of debt for purchase of vessel. This has also led to increase in TOL/TNW levels to 1.87 times in FY2026 (Prov.) from 0.96 times in FY2025. Despite increase in the overall debt levels, the Debt-EBITDA levels remain moderate at 1.57 times in FY2026 (Prov.) as against 1.83 times in FY2025. The interest coverage ratio (ICR) stood healthy at 8.61 times with a strong debt service coverage ratio (DSCR) at 6.82 times in FY2026 (Prov.).
Weaknesses
Intensive working capital operations
The operations of SCIPL remain working capital intensive with high gross current assets (GCA) of 154 days in FY2026 (Prov.). The GCA days are mainly driven by debtor days which stood high at 131 days in FY2026 (Prov.) as against 61 days in FY2025. In FY2026, the company increased their focus towards the fabrication work contracts. The revenue for these are recorded on milestone basis and payments are released within 30 - 50 days. Further, major of the sales were generated in Q4 FY2026, which led to higher receivable position on the year end. Further, increase in the advance tax paid also led to increase in the GCA days.
Customer concentration risk and tender based nature of operations
SCIPL’s operations are mainly tender based with competitive pricings, most of work orders coming from a single oil & exploration customer. As a result, the company’s revenue depends heavily on tenders floated by this government company, leading to high customer concentration risk. Further, considering the tenor of the orders ranges from 3-5 yrs, timely execution at sustained profitability remains a challenge. However, SCIPL has a longstanding relationship of around two decades and given the reputed counter party, the risk is mitigated to some extent. Further, for execution of EPC works, charter vessel hiring is crucial, increase in freight rates may have an impact on the margins.
Rating Sensitivities
Potential triggers (individual or collective) for an upward rating action:
Improvement in working capital cycle
Improvement in operating performance, generation of net cash accruals higher than Rs. 85 Cr.
Continued maintenance of a healthy financial risk profile with TOL/TNW remaining below unity.
Potential triggers (individual or collective) for a downward rating action:
Significant increase in debt levels leading to deterioration in the financial risk profile
Generation of net cash accruals lower than Rs. 50 Cr.
Liquidity Position
Adequate
The company generated net cash accruals of Rs. 62.24 Cr. against maturing repayment obligations of Rs. 0.74 Cr. in FY2026 (Prov.). Going forward, the NCAs are expected to remain in the range of Rs. 70 – 85 Cr. against repayment obligations of Rs. 16 – 35 Cr. in FY2027 and FY2028. The current ratio stood at 1.52 times in FY2026 (Prov.) The bank limit utilization stood low at ~47 percent for the last six months ended May 2026. The company also maintains a 3 month DSRA balance along with ESCROW mechanism for its existing long term debt which provides the additional liquidity comfort. The company had an unencumbered cash and bank balance of Rs.0.14 Cr. on March 31, 2026 (Prov.).
Outlook: Stable
Other Factors affecting Rating
None
Particulars
Unit
FY 26 (Provisional)
FY 25 (Actual)
Operating Income
Rs. Cr.
238.72
92.19
PAT
Rs. Cr.
55.88
7.87
PAT Margin
(%)
23.41
8.54
Total Debt/Tangible Net Worth
Times
1.44
0.62
PBDIT/Interest
Times
8.61
13.36
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.
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