Harbir Automobile Pvt. Ltd.

Brickwork Ratings assigns the ratings for the Bank Loan Facilities of Rs. 69.00 Crs. of Harbir Automobile Pvt. Ltd.

Particulars

Facilities**	Amount(Rs.Crs.)	Tenure	Rating#
Fund Based	10.50	Long Term	BWR BBB - /Stable Assignment
	58.50	Short Term	BWR A3 Assignment
Grand Total	69.00	(Rupees Sixty Nine Crores Only)

#Please refer to BWR website www.brickworkratings.com for definition of the ratings
**Details of Bank Loan facilities,consolidation or instruments are provided in Annexure RATING ACTION / OUTLOOK

Brickwork Ratings has assigned the ratings of BWR BBB-/Stable/A3 for the bank loan facilities of Harbir Automobile Pvt Ltd totalling Rs.69Cr.

The ratings is supported by a robust operational scale-up, with Total Operating Income expanding driven by the increase in vehicle sales volume as well in FY26. This top-line growth, combined with the strategic consolidation of leased workshops into company-owned premises, has driven a strong bottom-line turnaround in FY26. Additionally, HAPL benefits from the 45-year combined industry experience of its promoters and its strategic partnership as an authorized dealer for Mahindra & Mahindra Ltd. (MML), establishing a dominant "3S" (Sales, Service, and Spares) regional footprint across the high-affluence Tri-city and Punjab markets.

Conversely, the ratings is constrained by its inherent susceptibility to the cyclicality of the automotive sector and the vulnerability is compounded by intense regional competition from established dealerships of major competing OEMs. Furthermore, the company operates under a thin-margin, trading-based business model that is fundamentally dependent on high sales volumes to sustain profitability.

KEY RATING DRIVERS

Credit Strengths:

• Extensive experience of the promoters :

  The company benefits from the extensive expertise of its promoters, who bring over two decades of specialized experience to the automotive dealership sector. Under their leadership, Harbir Automobile Pvt Ltd has successfully scaled its operations from a turnover of Rs. 869.48 Cr. in FY25 to Rs.1187.38Cr. in FY26. The management’s deep understanding of market dynamics in the Chandigarh and Punjab regions, coupled with their ability to manage a growing network of their facilities (including 3S setups and owned workshops), continues to drive the company's growth.

• Strategic Partnership with OEM and Dominant Regional Presence :

  Harbir Automobile Pvt Ltd maintains a healthy and long-standing relationship with its OEM, Mahindra & Mahindra Ltd (MML), serving as a primary authorized dealer for both passenger and commercial vehicle segments. The company’s credit profile is significantly bolstered by the robust market performance of MML, which has seen record-breaking volumes in the SUV and EV segments through FY26. As a well-rooted brand in the Tri-city area, the company leverages its strategic location and extensive "3S" (Sales, Service, and Spares) infrastructure to capture high-volume sales and maintain a strong relationship with both retail and government customers.

Credit Risks:

• Inherent Exposure to Sectoral Cyclicality and Intense Competition :

  The entity’s performance remains susceptible to the cyclical nature of the automotive industry, which is heavily influenced by macroeconomic factors such as GDP growth, fluctuating interest rates, and fuel price volatility. Operating in the highly competitive Tri-city and Punjab regions, HAPL faces significant pressure from established dealerships of other major OEMs (e.g., Hyundai, Kia, Tata) and a growing unorganized used-car market. This competitive intensity, combined with shifting consumer preferences and sensitivity to vehicle running costs, poses a constant challenge to maintaining market share and consistent sales momentum across all vehicle segments.

• Trading-Based Business Model with Limited Pricing Power :

  HAPL operates on a thin-margin, trading-based model where profitability is highly dependent on sales volumes. The company has limited bargaining power with its principal manufacturer, Mahindra & Mahindra, as product margins are predetermined and commission structures are standardized across the dealership network. This lack of pricing autonomy leaves little room for the company to absorb rising operational costs or to generate additional income through price adjustments, making the bottom line highly sensitive to any changes in the principal’s incentive schemes or the broader regulatory environment.

ANALYTICAL APPROACH - Standalone

For arriving at its ratings, BWR has considered the standalone performance of Harbir Automobile Pvt Ltd, BWR has applied its rating methodology as detailed in the Rating Criteria (hyperlinks provided at the end of this rationale). Moreover, BWR has also taken publicly available information and clarification/information provided by the Company into consideration.

RATING SENSITIVITIES

Positive Sensitivity Factors:

• Sustained increase in the Total Operating Income (TOI) exceeding Rs 1,300Cr. and operating margins sustained above 2%.

• Debt protection metrics of DSCR above 2x and ISCR above 1.5x along with maintained liquidity indicator of current ratio at the current level.

Negative Sensitivity Factors:

• Sustained decline in operating margins below 2% on a continuous basis.

• A rise in the debt burden, accompanied by a decline in key ratios such as ISCR below 1x, and DSCR falling below 1.5x.

LIQUIDITY INDICATORS - Adequate

The Company's liquidity is Adequate with sufficient cash accruals of Rs.13.04Cr. in FY26 and the current ratio above unity indicating the ability to meet it's debt obligations. In FY26, the Debt Service Coverage Ratio (DSCR) stood at 1.67x. This reflects on the company's timely repayment of the debt obligations driven by improving overall operations of the company. The company maintains strong liquidity, with working capital limits utilized in the 20-25% range, providing a huge substantial available for incremental operational needs.

ABOUT THE ENTITY

Established in January 2015, Harbir Automobile Pvt Ltd is a fast-growing Mahindra & Mahindra dealership in the Tri-city area. The company manages the full spectrum of Mahindra products, ranging from three-wheelers to the Alturas, through its fully equipped 3S (Sales, Service, and Spares) facilities in Chandigarh and Panchkula. Their operations focus on automotive marketing, retailing, and servicing across a product range spanning from three-wheelers to the Alturas. The company is led by directors Mr. Harbir Singh and Mr. Maneet Singh, who possess over 45 years of combined industry experience and also partner in Speed Motors. Supported by a workforce of over 250 employees, the team includes highly skilled technical staff, many of whom have been with the firm since its inception. This experienced team ensures a focused approach to customer service and product reliability throughout their markets.

ESG Profile

The company demonstrates a Evolving ESG profile based on its environmental, social, and governance practices.

Environmental: The company addresses operational energy consumption and sustainable resource management through active green initiatives. Key disclosures include the installation of a 135-kilowatt solar power plant at its primary Panchkula facility, with a long-term strategic plan to transition the majority of its dealership network to solar energy. Furthermore, the entity actively engages in wastewater management by treating and recycling water within its service workshops to lower consumption. No past environmental violations or regulatory penalties have been reported.

Social: Social factors focus on workplace welfare, comprehensive safety training, and regulatory compliance. Through a third-party partnership with G4 Securities, the company provides structured employee training encompassing self-defense, fire safety, emergency evacuation, and hazard management protocols. To mitigate logistical and transport risks, dedicated, certified safety instructors routinely conduct specialized road safety and parameter training for field drivers. The entity maintains strict adherence to prevailing labor laws to support stable workforce retention.

Governance: The governance assessment highlights a highly stable management structure and robust oversight framework. The board consists of experienced directors with a combined industry track record of over 45 years, ensuring strong strategic steering and sector expertise. The company demonstrates a commitment to transparency and financial integrity by actively transitioning its employee benefit provisions (gratuity accounting) to an actuarial valuation basis. Risk management frameworks are aligned with standard banking covenants and strict compliance with national automobile trading regulations.

KEY FINANCIAL INDICATORS (Standalone)

Key Parameters	Units	FY 23 - 24 (Audited - Annual)	FY 24 - 25 (Audited - Annual)	FY 25 - 26 (Provisional - Annual)
Operating Revenue	Rs.Crs.	643.29	869.48	1187.38
EBITDA	Rs.Crs.	10.86	19.29	26.03
PAT	Rs.Crs.	3.48	5.37	9.55
Tangible Net Worth	Rs.Crs.	16.56	23.43	32.99
Total Debt / Tangible Net Worth	Times	5.47	5.70	3.56
Current Ratio	Times	1.20	1.10	1.43

KEY COVENANTS OF THE FACILITY RATED

The key covenants are the standard terms as stipulated in the sanction letters of the rated facilities.

STATUS OF NON-COOPERATION WITH PREVIOUS CRA

Creadit Rating Agency	Status and Reason for Non-Cooparation	Date of Press Release
CRISIL	The company failed to provide the necessary information required for monitoring its credit rating, despite repeated requests from CRISIL Ratings as agreed upon in their Rating Agreement.	26Jun2026
CARE	The company failed to provide the necessary information required for monitoring its credit rating, despite repeated requests from CARE Ratings as agreed upon in their Rating Agreement.	20Apr2026

RATING HISTORY FOR LAST THREE YEARS (including withdrawal and suspended)

Facilities	Current Rating  (2026)			2025		2024		2023
Type	Tenure	Amount (Rs.Crs.)	Rating	Date	Rating	Date	Rating	Date	Rating
Fund Based	LT	10.50	BWR BBB-/Stable (Assignment)	NA	NA	NA	NA	NA	NA
Fund Based	ST	58.50	BWR A3 (Assignment)	NA	NA	NA	NA	NA	NA
Grand Total		69.00	(Rupees Sixty Nine Crores Only)

Hyperlink/Reference to applicable Criteria

• General Criteria
• Approach to Financial Ratios
• Short Term Debt
• Default Recognition and Default Curing Period
• Trading Companies

Analytical Contacts
Priyanka S Ratings Analyst priyanka.s@brickworkratings.com	Nagaraj K Director - Ratings Board : +91 80 4040 9940 nagaraj.ks@brickworkratings.com
Media Contact | media@brickworkratings.com	Client Support | clientsupport@brickworkratings.com

SL.No.	Name of the Bank/Lender	Type Of Facilities	Long Term(Rs.Crs.)	Short Term(Rs.Crs.)	Total(Rs.Crs.)	Complexity of the Instrument
1	Punjab National Bank	Electronic Dealer Finance System (e-DFS) - Sanctioned	_	5.00	5.00	Simple##
2	State Bank Of India (SBI)	Electronic Dealer Finance System (e-DFS) - Sanctioned	_	48.50	48.50	Simple##
3	State Bank Of India (SBI)	Cash Credit - Sanctioned	3.00	_	3.00	Simple##
4	State Bank Of India (SBI)	Cash Credit - Sanctioned	7.50	_	7.50	Simple##
5	State Bank Of India (SBI)	Adhoc Facilities FB (CC/TL/OD) - Sanctioned	_	5.00	5.00	Simple##
Total			10.50	58.50	69.00
TOTAL (Rupees Sixty Nine Crores Only)

## BWR complexity levels are meant for educating investors. The BWR complexity levels are available at www.brickworkratings.com / download / ComplexityLevels.pdf. Investors queries can be sent to info@brickworkratings.com.