| D-Link India Limited | ||||
| Rating Reaffirmed and Withdrawn | ||||
| Rating Action | ||||
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| Note: None of the Directors on CRISIL Ratings Limited’s Board are members of rating committee and thus do not participate in discussion or assignment of any ratings. The Board of Directors also does not discuss any ratings at its meetings. | ||||
| 1 crore = 10 million | ||||
| Refer to Annexure for Details of Instruments & Bank Facilities |
Detailed Rationale CRISIL Ratings has reaffirmed its rating on the long-term bank facility of D-Link India Ltd (D-Link) and simultaneously withdrawn its rating on the request from the company and on receipt of ‘no objection certificate’ from the lenders. The action is in line with the withdrawal policy of CRISIL Ratings.
On the high base of fiscal 2023, revenue grew a moderate 5% year-on-year to Rs 1,236 crore in fiscal 2024. In the first half of fiscal 2025, revenue grew by 12% driven by price hikes taken in March 2024 along with steady volume growth. Revenue is expected to expand by ~11% in fiscal 2025 on account of increase in volumes and healthy realisations. Thereafter, revenue growth could be moderate at 7-8%, due to a high base and increased competition. Operating profitability sustained around 9.7% in fiscal 2024 driven by the maintenance of healthy realisations by passing raw material price hikes to customers along with benefitting from rupee depreciation. Although margins moderated in the first quarter of fiscal 2025 owing to the steep increase in copper prices (which is a raw material for the cabling business), the price hikes taken in March 2024 led to an improvement in margins in the first half of fiscal 2025 to ~9%. Going forward, margins are expected to remain around 9% aided by stabilisation of copper prices although restricted by the highly competitive intensity in the business.
D-Link has continually strived to diversify its product offerings and thereby reduce its dependence on its parent, D-Link Corporation (Taiwan). Transactions with the parent are limited to product purchases wherein a royalty is paid for the third-party purchase for using trademark. Any significant cash payout could materially impact the financial risk profile of the company and would be a key monitorable.
D-Link maintains healthy liquidity position, as reflected in cash and equivalent of Rs 225 crore as on March 31, 2024. Absence of debt with no major capital expenditure (capex) provides enough financial flexibility to absorb any business shocks.
The rating continues to reflect the company’s established market position and strong distribution network across India, along with healthy financial risk profile. These strengths are partially offset by exposure to intense competition and volatility in input price and currency. |
Analytical Approach CRISIL Ratings has combined the business and financial risk profiles of D-Link and its wholly owned subsidiary, TeamF1 Networks Pvt Ltd (Team F1).
Please refer Annexure - List of Entities Consolidated, which captures the list of entities considered and their analytical treatment of consolidation. |
Key Rating Drivers & Detailed Description Strengths:
Weaknesses:
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Liquidity: Adequate Cash accrual, expected at Rs 70-80 crore in fiscals 2025 and 2026, will support liquidity in the absence of any capex or debt obligation. Unutilised bank limit of Rs 10 crore will be adequate to fund the company’s fixed expenses. Cash surplus is expected to remain healthy over the medium term. |
Outlook: Stable CRISIL Ratings believes D-Link will continue to benefit from its established market position and strong distribution network. Furthermore, the financial risk profile is expected to remain healthy on account of a debt-free balance sheet and absence of any major capex. |
Rating sensitivity factors Upward factors:
Downward factors:
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About the Company Incorporated in 2008, D-Link is a step-down subsidiary of D-Link Corporation. The company markets networking products of the parent and procures from third-party vendors. The product profile comprises network switches, wireless local area networks, routers, modems, storage devices, copper and fibre cables and cameras. In 2010, D-Link began marketing structured cabling products procured from third-party vendors.
In January 2014, D-Link acquired Team F1, a company that specialises in providing network and security software for embedded devices. The consideration for the acquisition was in the form of equity shares of D-Link, which resulted in the equity stake of D-Link Corporation in D-Link reducing to 51% from 60%.
D-Link Corporation, founded in 1986, is a multinational company that designs, markets and manufactures networking equipment and has presence across 100 countries. |
Key Financial Indicators
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Any other information: Not Applicable |
Note on complexity levels of the rated instrument: |
Annexure - Details of Instrument(s)
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Annexure – List of entities consolidated
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| Annexure - Rating History for last 3 Years | |||||||||||||||||||||||||||||||||||||||
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| All amounts are in Rs.Cr. | |||||||||||||||||||||||||||||||||||||||
| Annexure - Details of Bank Lenders & Facilities | ||||||||
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Criteria Details
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