Acuité has considered the consolidated business and financial risk profiles of SAPL and Som Autocast Private Limited, together known as Som Group (SG). The consolidation is owing to the common management and financial linkages between the entities.

Reputed clientele profile along with experienced management
The group primarily caters to leading automotive original equipment manufacturers (OEMs) such as Bajaj Auto Limited, Honda 2W, Varroc Engineering, Greaves Cotton and Dell ‘Orto India, etc. and has established healthy relationships with their stakeholders. Further, with pricing quotation updates on every quarter, the group is able to pass on any fluctuation in raw material costs to its customers. The operations of the group are led by Mr. Anil Ramgopal Mali, having over four decades of long-standing experience in the manufacturing industry, and is ably supported by second generation, Mr. Saurabh Anil Mali along with experienced management team.

Improvement in operating performance backed by continuous increase in capacities
The operating revenue of the group has shown an improvement of ~26 percent y-o-y in FY25, stood at Rs. 337.73 Cr. as compared to Rs. 268.41 Cr. in FY24. The improvement is majorly driven by continuous increase in the production capacity over the past 2-3 years, along with improving sales realization of the group. Furthermore, in FY26, the group has increased its combined die casting capacity to 1100 MT/month from 800 MT/month at a total project cost of Rs. 25 Cr., funded through a combination of external debt (~75 percent of project cost) and remaining through internal cash accruals, which is operational from July 2025.
Further, the operating margin also increased to 6.50 percent in FY25 as against 2.37 percent in FY24, on account of improving efficiency of the operations. Additionally, in July 2025, the group has commenced operations for captive solar power plant with a capacity of 5 MW (3 MW open access and 2 MW rooftop), that is further expected to improve the profitability. Moreover, till Feb 2026, the group has recorded a revenue of Rs. 378.99 Cr. (Rs. 308.57 Cr. in 11MFY2025) and the management anticipates topline of ~Rs. 410 Cr. in FY26.

Moderately intensive working capital operations
The working capital operations of the group is moderately intensive marked by gross current assets (GCA) of 108 days in FY25 (94 days in FY24), majorly driven by inventory and debtor levels. The group maintains an average inventory period of 30-45 days leading to inventory days of 36 days in FY25 (41 days in FY24). Moreover, the group receives the production plan from its customers at the start of the year, enabling the group to plan their production accordingly.  Further, the debtor days stood at 50 days in FY25 (35 days in FY24), and creditors days stood at 36 days in FY25 (49 days in FY24) on account of 30-45 days of average credit period received from the suppliers. Going forward, the working capital operations of the group are expected to remain at similar levels.

Moderate financial risk profile
While the net worth of the group continues to grow with Rs. 68.82 Cr. as on March 31, 2025 (Rs. 47.04 Cr. as on March 31, 2024) on account of accretion of profits to reserves and consideration of unsecured loans as quasi equity (Rs. 6.99 Cr. as on March 31, 2025), however owing to the continuous capex, the debt levels stood elevated to Rs. 118.67 Cr. as on March 31, 2025 (Rs. 91.08 Cr. as on March 31, 2024). Further, the gearing (debt-equity) ratio, although declined, stood moderately high at 1.72 times as on March 31, 2025, as against 1.94 times in the March 31, 2024. However, the debt protection coverage ratios stood comfortable with interest coverage ratio of 3.23 times in FY25 (1.99 times in FY24) and debt service coverage ratio stood at 1.78 times in FY25 (1.06 times in FY24). Additionally, debt-EBITDA, although declined, but stood high at 3.69 times as on March 31, 2025 (6.27 times as on March 31, 2024). Going forward, the financial risk profile is expected to remain moderate on account of additional debt availed for capex completed in FY26, to be supported by incremental cash accruals.

Exposure to customer concentration risk
The group remains exposed to customer concentration risk, with the top three customers accounting for around 89% of its total revenue in FY25. While the group benefits from strong, long-standing relationships with these customers, evidenced by consistent repeat orders, the high concentration makes the group vulnerable to any downturn in the any of the customers’ performance or changes in their business strategies. Hence, to mitigate such risks, the management has been focused on diversifying the customer base and has recently added clients such as Mahindra & Mahindra and Royal Enfield. Going forward, the group is expected to benefit from the government’s plan to develop the Bidkin region of Aurangabad into a global automobile manufacturing hub wherein several OEMs, including Ather Energy, Toyota–Kirloskar, and JSW Green Mobility, have already initiated plans to establish manufacturing units in the area, which is likely to support the Som Group’s future business expansion.

Cyclicality associated with automotive industry along with presence in a competitive industry
Som Group’s performance remains inherently linked to the cyclical nature of the automotive sector, where demand for auto components is directly influenced by vehicle sales, exposing suppliers to inherent industry fluctuations and the operational resilience of OEMs. Further, the automobile industry primarily moves with larger economic cycle, customer preferences, government policies, etc. Additionally, the group operates in a highly competitive industry wherein there is presence of a large number of players in the organized as well as unorganized sectors. Also, the industry is characterized by low entry barriers due to low technological inputs and easy availability of standardized machinery for the production. While the organized segment primarily caters to the OEM segment, the unorganized segment mainly caters to the replacement market and to tier II and III suppliers.

• ­Improvement in financial risk profile with Debt-EBITDA falling below 2.50 times
• Continued improvement in the scale of operations with growing profitability margins

• ­Decline in operating performance with net cash accruals falling below Rs. 20 Cr.
• Increase in debt levels impacting the financial risk profile
• Elongation in the working capital cycle