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 the long term rating of 'ACUITE BB+' (read as ACUITE double B plus) and the short-term rating of 'ACUITE A4+' (read as ACUITE A four plus) on the Rs. 41.00 Cr. bank facilities of Spectron Engineers Private Limited (SEPL). The outlook remains "Stable."
Rationale for reaffirmation
The rating reaffirmation draws strength from the moderate financial risk profile and healthy profitability margins of SEPL. The rating also draws comfort from the company’s association with reputed clientele of oil and gas companies through their long standing relationship. However, these strengths are offset by the overall modest scale and working capital intensive operations of the company.
About the Company
Incorporated in the year 1995, SEPL is engaged in undertaking operation and maintenance of oil and gas fields, fabrication of industrial-grade equipment, installation and maintenance of security and surveillance systems and waste management services. The company has its registered office located in Mumbai, Maharashtra. The company is managed by Ms. Meena Varghese Ollukaran, Mr. Ollukaran Kanjipallu Varghese and Mr. Spencer Ollukaran Varghese.
Unsupported Rating
Not Applicable
Analytical Approach
Acuité has considered the standalone business and financial risk profiles of the SEPL to arrive at this rating.
Key Rating Drivers
Strengths
Experienced management with an established track record of operations and reputed clientele
SEPL has been operating in the oil and gas industry for over two decades. The company is led by Mr. O. K. Varghese, chairman and managing director, who has more than three decades of industry experience. This has enabled SEPL to build long-standing relationships with leading oil and gas companies in the country.
Moderate financial risk profile
The financial risk profile of the company is characterized by low gearing and healthy debt protection metrics. The tangible networth of the company stood low, but gradually improving at Rs. 39.10 Cr. on March 31, 2026 (Prov.) as against Rs. 32.21 Cr. on March 31, 2025 post profit accretion to reserves. The gearing continues to remain below unity, and stood further improved at 0.48 times on March 31, 2026 (Prov.)[0.73 times in PY] on account of reduction in the long-term debt. Further, TOL/TNW and Debt-EBITDA levels remain comfortable at 1.05 times and 1.35 times respectively as on March 31, 2026 (Prov.). The coverage metrics also remain comfortable.
Going forward, the financial risk profile is expected to remain moderate given the absence of any debt funded capex plans.
Weaknesses
Intensive working capital operations
The operations of the company are intensive, with gross current assets (GCA) of 166 days in FY2026 (Prov.). The high GCA days are driven by inventory days of 14 days, debtor days of 98 days and cash & bank balance in FY2026 (Prov.). On the other hand, the creditor cycle also stood elongated at 154 days in FY2026 (Prov.). The average bank limit utilization stood at ~78 percent for the last six months ended July 2026.
Healthy operating margins, constrained by modest scale of operations
The operating revenue of the company stood at Rs. 105.78 Cr. in FY2026 (Prov.) as against Rs. 109.47 Cr. in FY2025. The company generated around 80 percent of its revenue from supply of services and balance through supply of gas meters. In FY2026, the revenue from services increased, however sale of gas meters declined on account of slowdown in orders which led to moderation in the topline. However, operating margin improved to 12.73 percent in FY2026 (Prov.) from 11.16 percent in FY2025, due to decline in the material cost and better absorption of fixed costs. The PAT margin stood at 6.56 percent in FY2026 (Prov.) as against 4.55 percent in FY2025. Further, the company has recorded a revenue of Rs. 33.32 Cr. till 4M FY2027 (Rs. 28.37 Cr. in corresponding PY).
Tender based nature of operations and competitive industry
The revenue of the company is highly dependent on the number and value of tenders floated by the oil and gas companies. Further, since the nature of operations is tender based, the growth depends on the ability to bid and get contracts awarded successfully.
Rating Sensitivities
Potential triggers (individual or collective) for an upward rating action:
Growth in operating revenue higher than Rs. 150 Cr while sustaining profitability margins
Improvement in working capital cycle
Potential triggers (individual or collective) for a downward rating action:
Further elongation in working capital cycle
Higher than expected increase in debt levels leading to deterioration in the financial risk profile
Decline in operating performance with revenue declining below Rs. 80 Cr
Liquidity Position
Adequate
The net cash accruals (NCA) of Rs. 9.01 Cr. stood sufficient against repayment obligations of Rs. 1.29 Cr. in FY2026 (Prov.). Going forward, the NCAs are expected to remain in the range of Rs. 9 – 12 Cr. against repayment obligations of Rs. 0.44 Cr. in FY2027. The current ratio stood below unity at 0.98 times on March 31, 2026 (Prov.) owing to deferred revenue pertaining to future revenue receipts parked in current liabilities. However, the bank limit utilization remains moderate at 78 percent for the last six months ended July 2026, providing liquidity cushion to some extent. The company also had an unencumbered cash and bank balance of Rs. 6.67 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.
105.78
109.47
PAT
Rs. Cr.
6.94
4.98
PAT Margin
(%)
6.56
4.55
Total Debt/Tangible Net Worth
Times
0.48
0.73
PBDIT/Interest
Times
5.58
4.02
Status of non-cooperation with previous CRA (if applicable)
ACUITE BB+ | Stable
(Upgraded from ACUITE BB | Stable)
Proposed Long Term Bank Facility
Long Term
2.00
ACUITE BB+ | Stable
(Upgraded from ACUITE BB | Stable)
13 Mar 2024
Bank Guarantee/Letter of Guarantee
Short Term
19.00
ACUITE A4+
(Reaffirmed)
Cash Credit
Long Term
20.00
ACUITE BB | Stable
(Reaffirmed)
Term Loan
Long Term
0.70
ACUITE BB | Stable
(Reaffirmed)
Term Loan
Long Term
1.30
ACUITE BB | Stable
(Reaffirmed)
Lender’s Name
ISIN
Facilities
Listing Status
Regulated By
Date Of Issuance
Coupon Rate
Maturity Date
Quantum (Rs. Cr.)
Complexity Level
Rating
Union Bank of India
Not avl. / Not appl.
Bank Guarantee/Letter of Guarantee
Unlisted
RBI
Not avl. / Not appl.
Not avl. / Not appl.
Not avl. / Not appl.
19.00
Simple
ACUITE A4+ | Reaffirmed
Union Bank of India
Not avl. / Not appl.
Cash Credit
Unlisted
RBI
Not avl. / Not appl.
Not avl. / Not appl.
Not avl. / Not appl.
22.00
Simple
ACUITE BB+ | Stable | Reaffirmed
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
