Press Release

March 09, 2026

VIRTUAL GALAXY INFOTECH LIMITED (ERSTWHILE VIRTUAL GALAXY INFOTECH PRIVATE LIMITED)
Rating Assigned and Upgraded

Product	Quantum (Rs. Cr)	Long Term Rating	Short Term Rating
Bank Loan Ratings	19.18	ACUITE BBB \| Stable \| Assigned	-
Bank Loan Ratings	14.53	ACUITE BBB \| Stable \| Upgraded	-
Bank Loan Ratings	2.47	-	ACUITE A3+ \| Upgraded
Total Outstanding	36.18	-	-
Total Withdrawn	0.00	-	-

Rating Rationale

Acuité has upgraded its long term rating at ‘ACUITE BBB’ (read as ACUITE Triple B) from 'ACUITE BBB-' (read as ACUITE Triple B Minus) and the short term rating at ‘ACUITE A3+’ (read as ACUITE A Three Plus) from 'ACUITE A3 (read as ACUITE A Three) on the Rs. 17.00 Cr. bank facilities of Virtual Galaxy Infotech Limited (Erstwhile Virtual Galaxy Infotech Private Limited) (VGIL). The outlook is ‘Stable’.
Acuité has also assigned its long-term rating of ‘ACUITE BBB’ (read as ACUITE Triple B) on the Rs.19.18 Cr. bank facilities of Virtual Galaxy Infotech Limited (Erstwhile Virtual Galaxy Infotech Private Limited) (VGIL). The outlook is ‘Stable’.

Rationale for Rating Upgrade
The rating upgrade reflects VGIL’s strong revenue growth in FY2025, supported by diversified revenue streams translating into improved operating income, healthy operating profitability driven by recurring orders and long-term contract renewals, and a moderate financial risk profile characterised by high net worth, lower gearing, and comfortable debt-coverage indicators. The upgrade also factors in VGIL’s established operating track record of 27 years, along with the extensive experience of its promoters in the Information Technology industry, which continues to support business stability and growth visibility. The rating also factors the improved financial risk profile on the back of successful IPO launch on May 2025 which has aided the company in reducing debt, manage working capital and deploy some amount towards ongoing capex as well. The liquidity remains adequate on the back of healthy accruals and low repayment obligations and free unutilised part of IPO proceeds. The rating, however, remains constrained by the moderately intensive working capital cycle, and the execution and collection risks associated with scaling in the government vertical.

About the Company

Virtual Galaxy Infotech Limited (VGIL), founded in 1997 and headquartered in Nagpur deliver a comprehensive suite of hybrid SaaS products, AI-driven platforms, and cloud-native enterprise solutions across Banking/BFSI, Fintech, ERP, Cybersecurity, and E-Governance domains. There are 6 directors and 2 promoter directors Mr. Avinash Shende and Mr. Sachin Pande.

Unsupported Rating

Not Applicable

Analytical Approach

Acuité has considered standalone business and financial risk profile of Virtual Galaxy Infotech Limited (Erstwhile Virtual Galaxy Infotech Private Limited) to arrive at the rating.

Key Rating Drivers

Strengths

Experienced management and established presence in the market
Established in 1997, the company is promoted by Mr. Avinash Shende and Mr. Sachin Pande who have been associated with the Information Technology industry for more than two decades. VGIL has Data Centre, which provides 24x7 Helpdesk, server colocation, and 4 Lease Lines with a band width of 2-6 MBPS for excellent customer support. It has a pool of Technical and Functional consultants trained in Application Implementation and Optimization to help its customers. The company is well supported by second line of management.
Acuite believes that the promoters' experience and healthy relations with its customers will continue to benefit VGIL over the medium term.

Improving scale of operations and profitability
The company has demonstrated a strong revenue growth of ~42% to Rs.120.14 Cr. in FY2025 from Rs.61.46 Cr. in FY2024, driven by overall increase in revenue across various product offerings. The BFSI segment continues to dominate, contributing around 92% of the topline, followed by the ERP segment. The year-to-date revenue up to December is Rs.127.00 Cr. The company has recently increased its strategic focus on government projects, a vertical expected to scale meaningfully over time. The operating margin of the company stood at 46.00% in FY2025 as compared to 49.78% in FY2024. The high operating margins was supported by higher recurring orders, renewals of long-term contracts, and increased revenue from newly launched product offerings. Consequently, PAT margins also improved and stood to 26.73% in FY2025 as against 26.12% in FY2024.
Acuite believes that the company is expected to show steady growth in its operating performance over the medium term.

Healthy financial risk profile
The financial risk profile of the company is marked by high networth, below unity gearing and healthy debt protection metrics. The net worth of the company stood at Rs. 69.94 Cr. as on March 31st, 2025, as against Rs. 32.53 Cr. as on March 31st, 2024, due to accretion of profit to reserve and capital infusion. The company has successfully completed its IPO in the month of May 2025 and has raised net proceeds of equity of Rs. 81.34 Cr. The total debt of the company stood at Rs. 39.73 Cr. as on March 31, 2025, as against Rs. 38.64 Cr. as on March 31, 2024. The debt profile of the company comprises of Rs. 1.83 Cr. of long-term debt, Rs. 7.50 Cr. of short-term debt, Rs.24.71 Cr. of unsecured loan from directors, and Rs.5.69 Cr. of current maturities of long-term debt. The gearing (debt-equity) of the company stood below unity at 0.57 times as on March 31, 2025, as compared to 1.19 times as on March 31, 2024. The Total Outside Liabilities/Tangible Net Worth (TOL/TNW) of the company stood at 0.93 times as on March 31, 2025, as against 2.21 times as on March 31,2024. Further, the debt protection metrics of the company stood healthy reflected by debt service coverage ratio of 8.28 times for FY2025 as against 4.66 times for FY2024 and interest coverage ratio stood at 21.61 times for FY2025 as against 12.37 times for FY2024. The net cash accruals to total debt (NCA/TD) stood at 1.00 times in FY2025 as compared to 0.57 times in the previous year.
Acuite believes that the financial risk profile is expected to remain healthy over the medium term marked by successful capital structure despite moderate debt funded capex plans over the medium term.

Weaknesses

Moderately intensive working capital operations:

The working capital management of the company is moderately intensive, as reflected by its Gross Current Assets (GCA) of 109 days in FY2025, which, although improved, yet remain high. The elongated GCA are primarily attributable on account of high debtor days, which stood at 68 days in FY2025 against 149 days in FY2024. This improvement in debtor’s days is on account of efficient collection mechanisms. The inventory days stood at 0 day in FY2025 as against 1 day in FY2024 whereas the creditor days stood at 34 days in FY2025 and 196 days in FY2024. Further, the average utilization for fund based and non-fund-based limits stood moderate, averaging around 60 percent for fund based limits and 63 percent for non-fund-based limits over the last six months ending Dec 2025.

Highly fragmented and competitive service industry
VGIL operates in a highly fragmented service industry with a large number of players in the organised and unorganised segment. The company faces direct competition from many organised and established players in the domestic market. There are various players catering to the same market which leads to limited bargaining power of the company and consequent pressure on its margins. The industry is highly technology oriented which keeps changing from time to time. Thus, the company has to keep upgrading its work procedure according to the needs of the clients.

Rating Sensitivities

Significant improvement in scale of operations while maintaining profitability margins.
Any large debt-funded capital expenditure, resulting in deterioration of financial risk profile.
Working capital cycle.

Liquidity Position

Adequate

The liquidity position remains adequate, evidenced by net cash accruals of Rs.39.77 Cr. in FY2025, as against its maturing debt obligations of Rs.2.54 Cr. In addition, it is expected to generate cash accrual in the range of Rs.60.00 Cr. to Rs.75.00 Cr. as against maturing repayment obligations in the range of Rs. 0.60 Cr. to Rs.5.00 Cr over the medium term. The cash and bank balance of the company stood at Rs. 0.19 Cr. as on 31st March 2025. The current ratio has stood at 1.02 times on March 31, 2025 from 1.20 times on March 31, 2024. Further, the working capital management of the company is moderately intensive in nature marked by improved yet high Gross Current Assets (GCA) of 109 days in FY2025, with moderate reliance on working capital limits with average fund-based limit utilisation of ~60.64 percent and non-fund based of ~63.36 percent in the last Six months ended Dec 2025.
Acuité believes that going forward the company will maintain adequate liquidity position owing to steady accruals, moderate current ratio and reliance on bank lines to fund working capital requirements.

Outlook: Stable

Other Factors affecting Rating

None

Key Financials

Particulars	Unit	FY 25 (Actual)	FY 24 (Actual)
Operating Income	Rs. Cr.	120.14	61.46
PAT	Rs. Cr.	32.12	16.05
PAT Margin	(%)	26.73	26.12
Total Debt/Tangible Net Worth	Times	0.57	1.19
PBDIT/Interest	Times	21.61	12.37

Status of non-cooperation with previous CRA (if applicable)

Not Applicable

Any other information

None

Applicable Criteria

• Default Recognition :- https://www.acuite.in/view-rating-criteria-52.htm
• Service Sector: https://www.acuite.in/view-rating-criteria-50.htm
• Application Of Financial Ratios And Adjustments: https://www.acuite.in/view-rating-criteria-53.htm

Note on complexity levels of the rated instrument

In order to inform the investors about complexity of instruments, Acuité has categorized such instruments in three levels: Simple, Complex and Highly Complex. Acuite’s categorisation of the instruments across the three categories is based on factors like variability of the returns to the investors, uncertainty in cash flow patterns, number of counterparties and general understanding of the instrument by the market. It has to be understood that complexity is different from credit risk and even an instrument categorized as 'Simple' can carry high levels of risk. For more details, please refer Rating Criteria “Complexity Level Of Financial Instruments” on www.acuite.in.

Rating History

Date	Name of Instruments/Facilities	Term	Amount (Rs. Cr)	Rating/Outlook
17 Dec 2024	Bank Guarantee (BLR)	Short Term	2.47	ACUITE A3 (Upgraded from ACUITE A4+)
	Term Loan	Long Term	4.00	ACUITE BBB- \| Stable (Upgraded from ACUITE BB)
	Proposed Long Term Bank Facility	Long Term	3.53	ACUITE BBB- \| Stable (Upgraded from ACUITE BB)
	Cash Credit	Long Term	7.00	ACUITE BBB- \| Stable (Upgraded from ACUITE BB)
12 Oct 2023	Bank Guarantee (BLR)	Short Term	2.47	ACUITE A4+ (Reaffirmed & Issuer not co-operating*)
	Cash Credit	Long Term	7.00	ACUITE BB (Downgraded & Issuer not co-operating* from ACUITE BB+ \| Stable)
	Proposed Long Term Bank Facility	Long Term	0.33	ACUITE BB (Downgraded & Issuer not co-operating* from ACUITE BB+ \| Stable)
	Working Capital Term Loan	Long Term	0.70	ACUITE BB (Downgraded & Issuer not co-operating* from ACUITE BB+ \| Stable)
	Working Capital Term Loan	Long Term	1.82	ACUITE BB (Downgraded & Issuer not co-operating* from ACUITE BB+ \| Stable)
	Term Loan	Long Term	4.68	ACUITE BB (Downgraded & Issuer not co-operating* from ACUITE BB+ \| Stable)

Annexure - Details of instruments rated

Lender’s Name	ISIN	Facilities	Date Of Issuance	Coupon Rate	Maturity Date	Quantum (Rs. Cr.)	Complexity Level	Rating
BANK OF MAHARASHTRA	Not avl. / Not appl.	Bank Guarantee (BLR)	Not avl. / Not appl.	Not avl. / Not appl.	Not avl. / Not appl.	2.47	Simple	ACUITE A3+ \| Upgraded ( from ACUITE A3 )
BANK OF MAHARASHTRA	Not avl. / Not appl.	Cash Credit	19 Oct 2024	Not avl. / Not appl.	Not avl. / Not appl.	7.50	Simple	ACUITE BBB \| Stable \| Upgraded ( from ACUITE BBB- )
Not Applicable	Not avl. / Not appl.	Proposed Long Term Bank Facility	Not avl. / Not appl.	Not avl. / Not appl.	Not avl. / Not appl.	0.21	Simple	ACUITE BBB \| Stable \| Upgraded ( from ACUITE BBB- )
BANK OF MAHARASHTRA	Not avl. / Not appl.	Term Loan	30 Mar 2020	Not avl. / Not appl.	28 Feb 2027	0.95	Simple	ACUITE BBB \| Stable \| Upgraded ( from ACUITE BBB- )
BANK OF MAHARASHTRA	Not avl. / Not appl.	Term Loan	29 Aug 2022	Not avl. / Not appl.	31 Jul 2029	1.79	Simple	ACUITE BBB \| Stable \| Upgraded ( from ACUITE BBB- )
BANK OF MAHARASHTRA	Not avl. / Not appl.	Term Loan	11 Feb 2022	Not avl. / Not appl.	31 Jan 2027	0.26	Simple	ACUITE BBB \| Stable \| Upgraded ( from ACUITE BBB- )
Union Bank of India	Not avl. / Not appl.	Term Loan	30 Sep 2025	Not avl. / Not appl.	31 Aug 2033	3.82	Simple	ACUITE BBB \| Stable \| Upgraded ( from ACUITE BBB- )
Union Bank of India	Not avl. / Not appl.	Term Loan	30 Sep 2025	Not avl. / Not appl.	31 Aug 2033	19.18	Simple	ACUITE BBB \| Stable \| Assigned

Contacts

Mohit Jain
Chief Analytical Officer - Rating Operations

Sahil Sawant
Associate Analyst - Rating Operations

Contact details exclusively for investors and lenders

Mob: +91 8591310146
Email ID: analyticalsupport@acuite.in

About Acuité Ratings & Research

Acuité is a full-service Credit Rating Agency registered with the Securities & Exchange Board of India (SEBI). The company received RBI Accreditation as an External Credit Assessment Institution (ECAI) for Bank Loan Ratings under BASEL-II norms in the year 2012. Acuité has assigned ratings to various securities, debt instruments and bank facilities of entities spread across the country and across a wide cross section of industries. It has its Registered and Head Office in Kanjurmarg, Mumbai.

Disclaimer:

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