MIC Electronics Limited

Brickwork Ratings assigns the ratings for the Bank Loan Facilities of Rs. 74.23 Crs. of MIC Electronics Limited

Particulars

Facilities**	Amount(Rs.Crs.)	Tenure	Rating#
Fund Based	66.23	Long Term	BWR BB /Stable Assignment
Non Fund Based	8.00	Short Term	BWR A4 + Assignment
Grand Total	74.23	(Rupees Seventy Four Crores and Twenty Three 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 (BWR) has assigned ratings of  ‘BWR BB/Stable/BWR A4+’ to fund-based and non-fund-based bank loan facilities of Rs. 74.23 Crores to MIC Electronics Limited. 

The rating factors in the company’s post-resolution improvement in operational and financial performance, supported by a stable and experienced management team, effective capital restructuring, a well-diversified project portfolio across geographies, and a comfortable tangible net worth. However, the rating remains constrained by customer concentration, project execution risks, including the timely completion and stabilization of upcoming projects, and high working capital utilization, given the working capital-intensive nature of operations. Going forward, the company’s ability to enhance its operational scale and profitability, improve working capital management, and ensure the timely execution of projects will remain key rating sensitivities.

The rating outlook has been assigned as "Stable" as BWR believes that MIC Electronics 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:

• Revival Post NCLT Resolution and Favorable Industry Outlook :

  Post-resolution, the company has shown signs of operational and financial improvement, aided by stable management and capital restructuring. The LED industry is expected to grow due to increased adoption in public infrastructure, energy efficiency norms, and government initiatives, which are providing long-term growth potential.

• Improved Tangible Net Worth and Conservative Capital Structure :

  The company’s TNW has significantly improved to Rs. 220 Cr in FY25, indicating a strong recovery and equity infusion. And the company has maintained a low gearing ratio, with Total Debt/TNW ranging from 0.10x to 0.22x, reflecting limited reliance on external debt and strong capital discipline.

• Comfortable Coverage Metrics and Strong Liquidity Position :

  Healthy ISCR (3.91x in FY25) and DSCR (3.43x in FY25) indicate sufficient earnings and cash flow generation to meet interest and repayment obligations. The current ratio remained above the benchmark at 1.95x in FY25, signifying adequate short-term liquidity.

Credit Risks:

• Customer concentration :

  A major portion of the company’s revenues is dependent on a limited number of clients, especially government bodies like Indian Railways, which exposes the company to client concentration risk.

• Project Execution Risk: :

  Execution of large infrastructure and LED-based contracts, particularly government orders, is subject to delays, regulatory approvals, and site readiness, which may affect revenue recognition.

ANALYTICAL APPROACH - Consolidated

For arriving at its ratings, BWR has applied its rating methodology as detailed in the Rating Criteria detailed below (hyperlinks provided at the end of this rationale). BWR has principally relied upon the consolidated financials of MIC Electronics Limited and its subsidiary (100%), SOA Electronics Trading LLC, (100%), from audited FY2025 and Projected FY2026, FY2027.

RATING SENSITIVITIES

The company’s ability to increase its scale of operations, improve profitability, and increase growth margin would be the key rating sensitivities.

Positive:

• Sustained growth in operating income, with revenue exceeding projections and EBITDA margin consistently above 20%.
• Sustained increase in Net Profit Margin by 17.50%
• Efficient working capital management leading to a receivables cycle below 100 days and improvement in operating cash flows.
• Timely execution of new orders, particularly in high-margin sectors

Negative:

• If the revenue declines by more than 10-15% YoY due to order delays or weaker demand.
• If profitability weakens, with EBITDA margins falling below 10% and PAT margins dropping under 4%.
• Stretch in the working capital cycle, particularly if receivable days increase significantly beyond 150 days.
• Any adverse development in management quality, governance standards, or promoter support.

 

LIQUIDITY INDICATORS - Adequate

Adequate liquidity characterized by sufficient cushion in accruals vis-a-vis repayment obligations and a moderate cash balance. Its capex requirements are modular and expected to be funded using debt for which it has sufficient headroom. Its bank limits are utilized to the extent of 90% and has sought enhancement in bank lines, supported by the above unity current ratio.

The company has a cash and bank balance of Rs 7.74 Cr in FY24 and Rs 13.85 Cr in FY25. The current ratio of the firm stands at 3.32 times in FY24 and 2.22 times in FY25. The firm's average utilization of cash credit is 99.32% in the Canarabank facility and 91.99% in the BOM CC limit during the last 12 months. The net cash accruals are 19.27 Cr in FY24 and 14.65 Cr in FY25 over the CPLTD of Rs 0.05 Cr in FY24 and Rs 4.34 Cr in FY25. The ISCR of the firm stands at 7.50 times in FY24 and 3.91 times in FY25. The company's DSCR stands at 39.62 times in FY24, and in FY25, it is at 3.48 times. Taking all the above points into consideration, the firm's liquidity position is defined as adequate.

ABOUT THE ENTITY

MIC Electronics Limited (MIC) is a pioneer in the design, development, and manufacturing of Light-Emitting Diode (LED) based street lights and video displays. The main products include Indoor/Outdoor and mobile Displays and LED lighting systems, The displays are predominantly used in Indian Railways, sports stadiums, transportation hubs, public information displays, etc. The Company was established on 17th May 1988 and has its registered office address at 192/B, Phase II, IDA, Cherlapally, Hyderabad -5000051. MIC’s Equity Shares are listed at the Mumbai Stock Exchange and National Stock Exchange and the present market. MIC has patents in possession for LED TV, LED Digi Poster, and LED 3D video displays. The Company was taken over through the NCLT process in July 2021 and is headed by Mr. Y.Kaushik as Managing Director. Post-acquisition, the Company has secured an order for the supply of 5,000 numbers of Oxygen Concentrators under the PM-Cares Scheme through ONGC during the Pandemic situation prevailing in the Country, with efficient technology, the company is progressing under the Leadership of its Managing Director, Mr.Kaushik. The project was completed during the FY 2021-22. The Company has taken up the Project of IPIS under Indian Railways' new Spec of “RDSO/SPN/TC/108.

Under the new management, the required infrastructure has been put into use and offered for RDSO for approval of Capacity and Caliber Assessment (CCA) during the month of August 2022. The RDSO had given approval for the CCA during the month of October 2022 by registering our Company as CCA CCA-approved vendor with an eligibility to participate in the IPIS tenders. The product approval was obtained in March 2023. In addition, recently, the company has obtained CCA approval for the Emergency Lighting Unit is in L1.

Apart from the above, MIC is getting orders by way of Electronic Manufacturing Service(EMS) for Energy meters and also lighting products, and is catering to the General display orders from private customers. In addition, regular AMC works are being carried out for Indian Railways, Government entities, and private customers.

KEY FINANCIAL INDICATORS (Standalone)

Key Parameters	Units	FY 23 - 24 (Audited)	FY 24 - 25 (Audited)	FY 25 - 26 (Unaudited - Midterm-H1)
Operating Revenue	Rs.Crs.	54.57	61.73	23.85
EBITDA	Rs.Crs.	12.30	18.02	7.97
PAT	Rs.Crs.	61.84	9.79	3.88
Tangible Net Worth	Rs.Crs.	121.73	219.73	223.26
Total Debt / Tangible Net Worth	Times	0.10	0.22	0.21
Current Ratio	Times	3.32	1.95	1.81

KEY FINANCIAL INDICATORS (Consolidated)

Key Parameters	Units	FY 23 - 24 (Audited)	FY 24 - 25 (Audited)	FY 25 - 26 (Unaudited - Midterm-H1)
Operating Revenue	Rs.Crs.	Not Available	94.76	49.50
EBITDA	Rs.Crs.	Not Available	18.04	7.92
PAT	Rs.Crs.	Not Available	9.83	3.84
Tangible Net Worth	Rs.Crs.	Not Available	220.61	226.20
Total Debt / Tangible Net Worth	Times	Not Available	0.22	0.20
Current Ratio	Times	Not Available	2.22	1.90

KEY COVENANTS OF THE FACILITY RATED

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

STATUS OF NON-COOPERATION WITH PREVIOUS CRA

Not Applicable

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	66.23	BWR BB/Stable (Assignment)	NA	NA	NA	NA	NA	NA
Non Fund Based	ST	8.00	BWR A4+ (Assignment)	NA	NA	NA	NA	NA	NA
Grand Total		74.23	(Rupees Seventy Four Crores and Twenty Three lakhs Only)

Hyperlink/Reference to applicable Criteria

• General Criteria
• Approach to Financial Ratios
• Short Term Debt
• Consolidation of Companies
• Manufacturing Company

Analytical Contacts
Navyashree S P Ratings Analyst navyashree.sp@brickworkratings.com	Sabitha M Nayak Associate Director-Ratings sabitha.nayak@brickworkratings.com
1-860-425-2742 | media@brickworkratings.com	Customer Support | CustSupport@brickwrokratings.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	Bank of Maharashtra	Cash Credit - Sanctioned	11.00	_	11.00	Simple##
2	Bank of Maharashtra	Bank Guarantee - Sanctioned	_	4.00	4.00	Simple##
3	Canara Bank	Bank Guarantee - Sanctioned	_	4.00	4.00	Simple##
4	Canara Bank	Cash Credit - Sanctioned	20.00	_	20.00	Simple##
5	Canara Bank	Cash Credit - Proposed	22.45	_	22.45	Simple##
6	Canara Bank	Term Loan - Out-standing	12.78	_	12.78	Simple##
Total			66.23	8.00	74.23
TOTAL (Rupees Seventy Four Crores and Twenty Three 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.