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) and short-term rating of 'ACUITE A4+' (read as ACUITE A four plus) on Rs.514.51 Cr. bank facilities of Walchandnagar Industries Limited (WIL). The outlook is revised from‘Negative' to 'Stable'. Acuité has also withdrawn its proposed long-term rating of Rs. 120.49 Cr. bank facility without assigning any rating as it is a proposed facility of Walchandnagar Industries Limited. The rating has been withdrawn on account of the request received from the issuer. The rating withdrawal is in accordance with Acuité's policy on withdrawal of rating as applicable to the respective facility / instrument.?
Rationale for Rating
The rating reaffirmation and revision in outlook reflects the improvement in the company's operational performance during FY2026 as compared to FY2025. Revenue was increased by ~6% during the year, while the company reported a positive EBITDA, as a result of reduced cost and better absorption of operating costs. However, the sustainability of the operational turnaround and improvement in profitability remains a key monitorable. The company's liquidity position is stretched, supported by debt repayments through share warrant proceeds, funding towards planned capex requirements, inflow of inter-corporate borrowings, and moderate bank limit utilisation. Nevertheless, the company continues to report negative cash accruals, which shall remain a key monitorable over the medium term. Acuite notes that monetization of non-core assets for the outstanding debt repayment or any further capital infusion remains a key rating sensitivity factor. The rating also factors in the comfort derived from the release of partial retention money of Rs.23.74 Cr. and bank guarantees of Rs.8.28 Cr. from TNEB during FY26. The working capital cycle, however, continues to remain intensive owing to the inherent nature of the business. Further, the financial risk profile remains moderate supported by steady networth, gearing below unity albeit below average debt protection metrics. Acuite also notes the management's plans to raise additional funds through preferential allotment by FY2027. The proposed fund infusion is expected to support debt reduction, fund capital expenditure requirements, and augment working capital, thereby strengthening the company's overall financial flexibility.
About the Company
Mumbai based, Walchandnagar Industries Limited (WIL) is an ISO 9001:2008 certified company with global presence and diversified business portfolio in Projects, Products and High-tech Manufacturing. Incorporated in 1908, WIL has a long track record of operations for over 100 years. WIL has been engaged in strategic business areas like Defence, Nuclear, Missiles, Aerospace (DNAM) and industrial products like Gears, Centrifugal, Castings and Gauges. The company benefits from an established customer base across its business segments and listed on the BSE and NSE stock exchanges in India. The directors of the company are Mr. Chirag Chakor Doshi, Mr. Rupal Anand Vora, Mr. Prabhat Kumar, Mr. Chakor Lalchand Doshi, Mr. Jayesh Chaturdas Dadia and Mr. Giriraj Sharan Agrawal.
Unsupported Rating
Not Applicable
Analytical Approach
Acuite has taken standalone financial and business risk profile of Walchandnagar Industries Limited to arrive at this rating.
Key Rating Drivers
Strengths
Established track record of operations and experienced management
WIL has a long operating track record of over 100 years and is engaged in strategic sectors such as Defence, Nuclear, Missiles and Aerospace (DNAM), which contributed around 31% of FY2026 revenues. The company also derives revenues from its Product segment (55% of total revenue) and Foundry & Instrumentation segment (14% of total revenue). Established by (Late) Seth Walchand Hirachand Doshi, WIL has evolved into a diversified engineering enterprise with capabilities across high-precision manufacturing and critical equipment supply. The company is currently led by Mr. Chakor Doshi, who brings over three decades of industry experience. WIL has developed strong technical expertise and execution capabilities over the years, catering to marquee domestic and international customers. Its contribution to several prestigious national programmes, including the supply of critical equipment for India's lunar missions, Chandrayaan-I and Chandrayaan-II, as well as the Akash Missile programme, underscores its strong positioning in strategic sectors. Acuite believes that WIL's established presence in niche engineering segments, longstanding customer relationships, and the extensive experience of its management are expected to continue supporting its business profile over the medium term.
Increase in scale of operations during FY26
The operating income of the company stood at Rs.278.11 Cr. in FY26 as against Rs.262.09 Cr. in FY25 primarily driven by higher execution in the product segment. The unexecuted order book stood at Rs.374.56 Cr. as on 30.06.2026. The OB/OI stood at 1.35 times. This provides revenue visibility over the medium term. The EBITDA margin stood at 7.84% in FY26 as against (25.62) % in FY25 supported by the execution of higher-margin nuclear and aerospace orders, improved operational efficiencies and better cost control measures. Further, the losses have reduced significantly and stood at (5.28) % in FY26 as against (32.82) % in FY25 due to its operating performance. It was further supported by the write-back of a one-time provision pertaining to TNEB orders in FY2025. Acuite believes the scale of operations will improve backed by order flow and increasing focus on DNA over the medium term.
Weaknesses
Intensive Working Capital Cycle
The working capital cycle Is intensive marked by GCA days of 640 days in FY26 as against 690 days in FY25. The inventory days stood at 196 days in FY26 as against 137 days in FY25, primarily due to the requirement to maintain adequate raw material requirements for long-gestation projects and elevated work-in-progress arising from extended manufacturing and processing cycles. The debtor days stood at 204 days in FY26 as against 211 days in FY25. While collections from regular customers are generally realised within ~75 days of invoicing, the overall receivables cycle continues to remain elongated owing to long-pending dues from Tamil Nadu Electricity Board (TNEB). The other current assets majorly involved unbilled revenue of Rs.120.50 Cr. (pending the completion of various quality and inspection checks), balance with govt of Rs.27.37 Cr. and advances to suppliers of Rs.21.48 Cr. Against this, the creditor day stood at 194 days in FY26 as against 168 days in FY25 as payments to suppliers are largely aligned with the receipt of proceeds from customers. Additionally, the company procures raw materials for its Heavy Engineering Division (HED) and Foundry businesses through letters of credit, which typically provide a credit period of 150-180 days. Acuite believes that the working capital cycle will remain on similar levels over the medium term due to its inherent nature of the business.
Moderate Financial Risk Profile
The company has a moderate financial risk profile marked by gearing below unity albeit moderation in net worth and below average debt protection metrics. The tangible networth stood at Rs.358.37 Cr. as on 31st March 2026 as against Rs.372.33 Cr. as on 31st March 2025. During FY2026, the company reported a marginal increase in equity following the conversion of employee stock options amounting to Rs. 0.08 crore. The unsecured loans comprised of intercorporate deposits from a related party and stood at Rs.9.31 Cr. in FY26 as against Rs.9.03 Cr. in FY25. The gearing stood at 0.50 times in FY26 as against 0.48 times in FY25. The debt protection metrics marked by Interest Coverage Ratio and Debt Service Coverage Ratio of 0.91 times and 0.83 times respectively in FY26 as against (0.71) times and (0.48) times in FY25. The TOL/TNW stood at 1.45 times in FY26 from 1.34 times in FY25. Acuite believes the financial risk profile is likely to improve over the medium term supported by the proposed infusion of capital.
Rating Sensitivities
Potential triggers (individual or collective) for an upward rating action:
Growth in revenues by 30-40% along with improvement in profitability margins
Improvement in working capital cycle
Potential triggers (individual or collective) for a downward rating action:
Any deterioration in the financial risk profile leading to an impact on the overall liquidity Any deterioration in profitability coupled with delays in sale of non-core assets
Liquidity Position
Stretched
The company has stretched liquidity marked by negative net cash accruals of Rs. (3.65) Cr. against Rs.3.38 Cr. debt obligations during FY26. The repayments were met by proceeds received from share warrants. Furthermore, the NCD repayments falling due in FY27 are proposed to be funded through the sale of non-core assets, the timely execution of the same remains a key monitorable. The company has surplus cash and bank balances of Rs.20.09 Cr. in FY26 from Rs.54.96 Cr. in FY25 (inclusive of unutilized share warrant monies). The current ratio was low and stood at 1.01 times in FY26 from 1.12 times in FY26. The average bank limit utilization for fund based was ~82% and non-fund-based was ~63% for the last six months ended May 26. Acuite expects the liquidity position will improve supported by expected net cash accruals over the medium term.
Outlook: Stable
Other Factors affecting Rating
None
Particulars
Unit
FY 26 (Actual)
FY 25 (Actual)
Operating Income
Rs. Cr.
278.11
262.09
PAT
Rs. Cr.
(14.68)
(86.03)
PAT Margin
(%)
(5.28)
(32.82)
Total Debt/Tangible Net Worth
Times
0.50
0.48
PBDIT/Interest
Times
0.91
(0.71)
Status of non-cooperation with previous CRA (if applicable)
ACUITE BB | Stable | Reaffirmed | Negative to Stable
BANK OF INDIA (BOI)
Not avl. / Not appl.
Cash Credit
Unlisted
RBI
Not avl. / Not appl.
Not avl. / Not appl.
Not avl. / Not appl.
49.69
Simple
ACUITE BB | Stable | Reaffirmed | Negative to Stable
BANK OF INDIA (BOI)
Not avl. / Not appl.
Letter of Credit
Unlisted
RBI
Not avl. / Not appl.
Not avl. / Not appl.
Not avl. / Not appl.
34.56
Simple
ACUITE A4+ | Reaffirmed
Not Applicable
Not avl. / Not appl.
Proposed Long Term Bank Facility
Unlisted
RBI
Not avl. / Not appl.
Not avl. / Not appl.
Not avl. / Not appl.
120.49
Simple
ACUITE Not Applicable | Withdrawn
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.
1. Bank Guarantee from SBI includes Rs.58.00 Cr of LC and 5.00 Cr of LC/BG (Foundry). 2. Interchangeability of Rs.17.44 Cr from BG to LC for Bank of India. 3. Two Interchangeability between Non-Fund Based to Fund Based of Rs. 18 Cr. for State Bank of India.
4. Two-way Interchangeability between BG to CC/WCDL Rs.12.00 Cr. for Bank of India.
Contacts
List of instruments and names of regulators of the instruments
