RATING RATIONALE

27Oct2025

Avishkaran Industries Private Limited

Brickwork Ratings assigns the ratings for the Bank Loan Facilities of Rs. 106.49 Crs. of Avishkaran Industries Private Limited

Particulars

Facilities**	Amount(Rs.Crs.)	Tenure	Rating#
Fund Based	103.49	Long Term	BWR BBB - /Stable Assignment
Non Fund Based	3.00	Short Term	BWR A3 Assignment
Grand Total	106.49	(Rupees One Hundred Six Crores and Forty Nine lakhs 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 a long-term rating of BWR BBB-/Stable and a short-term rating of BWR A3 for the bank loan facilities of Avishkaran Industries Private Limited.

The rating factors in the company’s consistent revenue growth, the extensive experience of its directors, and its moderate financial profile. However, it remains constrained by exposure to intense competition, the inherent risk of rapid technological changes, and exposure to raw material price fluctuations that could impact cost structures and low profit margins. Going forward, the ability of the company to improve its scale of operations, the operating margin, and prudently manage its debt and inventory would be the key rating sensitivities.

The rating outlook has been assigned as "Stable" as BWR believes that Avishkaran Industries Private Limited's business risk profile will be maintained over the medium term. The 'Stable' outlook indicates a low likelihood of rating change over the medium term. The rating outlook may be revised to 'Positive' in case the revenue and profitability margins show sustained improvement. The rating outlook may be revised to 'Negative' if the financial risk profile goes down.

KEY RATING DRIVERS

Credit Strengths:

Moderate Financial Profile :
The company has a moderate but steadily improving business profile, supported by consistent growth in revenue and profit over the past three years. The company has net cash accruals of Rs. 6.75 Cr as against the CPLTD of Rs. 0.25 Cr in FY2025. The tangible net worth has increased significantly from Rs. 10.21 Cr in FY23 to Rs. 33.36 Cr in FY25, indicating a strengthening capital base. Liquidity remains adequate, with the current ratio improving from 1.31 times in FY24 to 1.40 times in FY25, suggesting the company’s ability to comfortably meet its short-term obligations. Strong debt-servicing metrics, with an ISCR of 2.28 times and a DSCR of 1.88 times in FY25, further reflect financial stability. Additionally, the company has achieved Rs.118.23 Cr in sales as of September 2025, pointing to sustained growth momentum in the current fiscal year.
Operational track record :
The company has demonstrated consistent growth in total operating income over the past three years, supported by an improving OPBDIT margin trend, which reflects operational efficiency and effective cost control. The recent installation of its own manufacturing unit is expected to enhance production capabilities, reduce dependency on third-party manufacturers, and support scalability. Furthermore, the planned commencement of export sales from January 2026 highlights the company’s strategic focus on market diversification and revenue expansion, strengthening its overall growth outlook.
Management Experience :
The company management is led by its co-founders, Mr. Viswanadh Kandula and Ms. Midhula Devabhaktuni, who bring strong academic credentials with MS degrees in Electronics and nearly eight years of hands-on industry experience. Under their guidance, the company has rapidly emerged as a leading homegrown brand in India’s competitive consumer electronics space. Their leadership has been central to the company's success in establishing itself as a prominent player in India’s consumer electronics market.

Credit Risks:

Competition Risk :
The market is crowded with both large global brands and low-cost local manufacturers, which increases competition and puts pressure on pricing. This often leads to lower profit margins for companies. On top of that, supply chain disruptions, especially for important electronic parts, can delay production and product deliveries. Many companies also depend on imports or third-party manufacturers, which can lead to risks like inconsistent product quality and unexpected cost increases due to currency changes or global market fluctuations.
Technology Obsolescence Risk :
The consumer electronics and lifestyle audio industry is very competitive and changes quickly. Technology advances at a fast pace, which means products can become outdated in a short time. To keep up, companies must constantly invest in research and development to create new and improved products. There’s also a constant need to meet changing customer preferences and design trends, especially in lifestyle-oriented products.
Low profit margins: :
Despite a consistent increase in operating revenue from Rs.165.29 crore in FY22–23 to Rs. 202.29 crore in FY24–25 (Provisional), the company's profitability remains modest. EBITDA margins are relatively low, with EBITDA of Rs.13.54 crore in FY24–25, representing just 6.7% of revenue. Similarly, PAT margins are also thin, with PAT at Rs.5.35 crore in FY24–25 (approximately 2.64% of revenue). These low margins may limit the company's ability to absorb cost pressures or economic downturns, potentially weakening its debt servicing capacity and overall credit profile.

ANALYTICAL APPROACH - Standalone

BWR has taken a standalone approach for the bank loan rating review of the company. BWR has applied its rating methodology as detailed in the rating criteria.

RATING SENSITIVITIES

Going forward, the ability of the company to improve its scale of operations, the operating margin, and prudently manage its debt and inventory would be the key rating sensitivities.

Upward:

The rating may be revised upward if the company improves its scale of operations and achieves an operating margin of more than 10% and a net profit of 4% along with enhanced cash accruals and a stronger cash and cash equivalents position.
An improvement in the current ratio above 1.40 times.

Downward:

A decline of 10% or more in revenue due to adverse market conditions or operational inefficiencies, and with EBITDA and PAT margins dropping under current levels.
A decline in the current ratio below 1.40 times and a fall in the Debt Service Coverage Ratio (DSCR) to below 1.20 times.

LIQUIDITY INDICATORS - Adequate

Adequate liquidity characterized by sufficient cushion in accruals vis-a-vis repayment obligations and a moderate cash balance of Rs. 8.24 Crore. Its capex requirements are modular and expected to be funded using debt of Rs. 58.00 Crore for which it has sufficient headroom. Its bank limits are utilized to the extent of 80% and has sought enhancement in bank lines, supported by the above unity current ratio.

The company has net cash accruals of Rs.6.75 Cr as against the CPLTD of Rs.0.25 Cr in FY2025. In FY2026, net cash accruals are projected to increase to Rs.17.28 Cr, while the CPLTD is expected to be Rs.3.00 Cr. The company has a Cash and Bank Balance of Rs.8.24 Cr and Short Term Loans and Advances of Rs.1.33 Cr in FY2025. ISCR and DSCR of the company stands at 2.28 times and 1.88 times, respectively in FY2025, indicating the strong debt-servicing capability of the company. The current ratio of the company stands at 1.40 times, indicating sufficient short-term liquidity, and it is expected to improve to 1.63 times in FY2026. The company has Rs.33.36 Cr of Tangible Networth in FY2025.

ABOUT THE ENTITY

Macro Economic Indicator	Sector	Industry	Basic Industry
Consumer Discretionary	Consumer Durables	Consumer Durables	Consumer Electronics

M/s Avishkaran Industries Private Limited (AIPL), incorporated on October 14, 2019, under the Registrar of Companies, Hyderabad, is engaged in the manufacturing of electronic accessories, primarily focusing on mobile-related peripherals such as headphones, speakers, wireless audio devices, and loudspeakers.

Avishkaran Industries operates from a state-of-the-art, 200,000 sq. ft. manufacturing facility in Hyderabad. The facility is supported by a workforce of 1,500+ professionals, including an innovative 50-member R&D division focused on cutting-edge advancements in audio technology.

The company holds SMETA certification and is in the process of obtaining FCCA and SCAN certifications, reflecting its commitment to ethical practices and global standards.

The Board of Directors comprises:

Mr. Vishwanadh Kandula
Ms. Midhula Sagar Devabhaktuni

As part of its strategic expansion, AIPL is preparing to enter export markets while transitioning to a self-owned manufacturing facility, reinforcing its vision to become a leading global player in the audio and mobile accessories sector.

KEY FINANCIAL INDICATORS (Standalone)

Key Parameters	Units	FY 22 - 23 (Audited - Annual)	FY 23 - 24 (Audited - Annual)	FY 24 - 25 (Provisional - Annual)
Operating Revenue	Rs.Crs.	165.29	176.54	202.29
EBITDA	Rs.Crs.	8.21	11.40	13.54
PAT	Rs.Crs.	4.08	4.68	5.35
Tangible Net Worth	Rs.Crs.	10.21	14.95	33.36
Total Debt / Tangible Net Worth	Times	3.73	3.04	3.76
Current Ratio	Times	1.31	1.31	1.40

KEY COVENANTS OF THE FACILITY RATED

The terms of sanction include covenants normally stipulated for such facilities.

STATUS OF NON-COOPERATION WITH PREVIOUS CRA

Not Applicable

ANY OTHER INFORMATION

Nil

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

Facilities	Current Rating (2025)			2024		2023		2022
Type	Tenure	Amount (Rs.Crs.)	Rating	Date	Rating	Date	Rating	Date	Rating
Fund Based	LT	103.49	BWR BBB-/Stable (Assignment)	NA	NA	NA	NA	NA	NA
Non Fund Based	ST	3.00	BWR A3 (Assignment)	NA	NA	NA	NA	NA	NA
Grand Total		106.49	(Rupees One Hundred Six Crores and Forty Nine lakhs Only)

Hyperlink/Reference to applicable Criteria

Analytical Contacts
Krishnappa Murugesh Ratings Analyst krishnappa.m@brickworkratings.com	Sabitha M Nayak Associate Director-Ratings sabitha.nayak@brickworkratings.com
1-860-425-2742 \| media@brickworkratings.com	Customer Support \| CustSupport@brickwrokratings.com

Avishkaran Industries Private Limited

ANNEXURE-I

Details of Bank Facilities rated by BWR

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	Bank of Baroda	Term Loan - Sanctioned	58.00	_	58.00	Simple##
2	Bank of Baroda	Cash Credit - Sanctioned	35.00	_	35.00	Simple##
3	Bank of Baroda	Forward Contract - Sanctioned	_	3.00	3.00	Simple##
4	Bank of Baroda	GECL - Out-standing	0.49	_	0.49	Simple##
5	HSBC	Overdraft - Sanctioned	10.00	_	10.00	Simple##
Total			103.49	3.00	106.49
TOTAL (Rupees One Hundred Six Crores and Forty Nine lakhs 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.

ANNEXURE-II

INSTRUMENT DETAILS

Instrument	Issue Date	Amount (Rs.Crs)	Coupon Rate (%)	Maturity Date	ISIN Particulars	Complexity of the Instrument
Nil	Nil	Nil	Nil	Nil	Nil	Nil

ANNEXURE-III

List of entities consolidated

Name of Entity	% Ownership	Extent of consolidation	Rationale for consolidation
Nil	Nil	Nil	Nil

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