| Suprajit Engineering Limited | ||||||
| Ratings reaffirmed at 'Crisil AA/Stable/Crisil A1+' | ||||||
| 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 ratings on the bank loan facilities Suprajit Engineering Limited (SEL; part of the Suprajit group) at ‘Crisil AA/Stable/Crisil A1+’.
The rating continues to reflect an established market position in India, diversified revenue profile, and strong operating efficiency along with a strong financial risk profile. These rating strengths are partially offset by susceptibility to volatility in raw material prices and cyclicality in end-user industries. |
Analytical Approach For arriving at the ratings, Crisil Ratings has combined the business and financial risk profiles of SEL and its wholly owned subsidiaries, Luxlite Lamps and Trifa Lamps, Suprajit Automotive Private Limited, Suprajit Europe Limited, Suprajit USA Inc, and Wescon. That’s because all these entities, collectively referred to as the Suprajit group, have high management, operational, and financial integration
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:
For 9M FY25, the group has reported a revenue of Rs.2400 crore with an operating profitability of around 12%. Margin for standalone entity continues to remain steady at around 15-17% during FY25. Over the medium term, revenues and profitability are expected to be driven by benefits from economies of scale, higher productivity, and the leadership position allowing for passage of any hike in key raw material prices to customers.
Weakness:
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Liquidity: Strong Bank limit utilisation is low at around 62.04 percent for the past twelve months ended November 2024. Cash accruals are expected to be over Rs 200-270 crore which are sufficient against term debt obligation of Rs 67-70 crore over the medium term. Expected Current ratio are healthy at 1.7 times on March 31, 2025. Liquid investments of around Rs.300 crores in shares, debentures, and mutual funds as on March 31, 2025. Low gearing and moderate net worth support its financial flexibility, and provides the financial cushion available in case of any adverse conditions or downturn in the business.
ESG Profile The company’s scope 1 and 2 emissions and energy consumption intensities was relatively lower compared with its peers in fiscal 2024. The company’s attrition rate at ~5% is lower compared with its peers and has declined from ~9% in fiscal 2023. Suprajit Engineering’s governance structure is characterized by 50% of its board comprising of independent directors, 2-woman board director, dedicated investor grievance redressal system, and extensive financial disclosures. |
Outlook: Stable Crisil Ratings believes Suprajit group shall continue to benefit over the medium term from its established market position in India, diversified revenue profile, and strong operating efficiency |
Rating sensitivity factors Upward Factors:
Downward Factors:
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About the Company SEL was incorporated at Bengaluru in 1985, promoted by Mr Ajith Kumar Rai. The company manufactures mechanical control cables used in two- and four-wheelers and by non-automotive segments, and equipment such as speedometers, tachometers, and fuel and temperature gauges for the automotive sector. It also produces halogen lamps for the automobile industry, and is a dominant player, catering to the two- and four-wheeler, passenger, commercial vehicle, and after-market segments. Merger of Phoenix Lamps Ltd with SEL became effective from April 1, 2016. In fiscal 2017, SEL has also acquired Wescon, a leading player in manufacture of non-automotive cables, particularly in North America. The company, is listed on the National Stock Exchange and the Bombay Stock Exchange Ltd. |
Key Financial Indicators: Conslidated
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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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