K R Auto Components Pvt. Ltd.

Brickwork Ratings assigns the long-term and short-term ratings of "BWR BBB+/Stable/BWR A2" for the Bank Loan Facilities of Rs. 130.00 Crs. of K R Auto Components Pvt. Ltd.

Particulars

Facilities**	Amount(Rs.Crs.)	Tenure	Rating#
Fund Based	120.00	Long Term	BWR BBB + /Stable Assignment
	(75.00)	Short Term	BWR A2 Assignment
	(75.00)
	(75.00)
Non Fund Based	10.00	Short Term	BWR A2 Assignment
	(10.00)
	(6.00)
	(2.00)
Grand Total	130.00	(Rupees One Hundred Thirty 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 long-term and short-term ratings of “BWR BBB+/Stable/BWR A2” for the bank loan facilities of Rs. 130.00 Cr.

The Rating has factored, inter alia, Experienced Management coupled with extensive market presence of the company and reputed customer base, Comfortable Debt protection metrics, Growth in the scale of operations and Moderate leverage profile, albeit increased value of fixed assets. The rating is constrained by Vulnerability of Profit Margins to fluctuation in raw material prices and Project completion and working capital management.

Going forward, the ability of the company to improve its scale of operations, liquidity profile, maintain efficient working capital management and satisfactory gearing levels will remain the key rating sensitivities/monitorable. The rating outlook has been assigned as "Stable" as BWR believes that K R Auto Components Pvt. Ltd., 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:

• Experienced Management coupled with extensive market presence of the company and reputed customer base: :

  The company is managed by an experienced and qualified management team, which has decades of experience in the Auto Components Manufacturing business. Extensive experience, coupled with a professional management setup and long market existence, enhances the competitive position of the company in the industry, which has also helped the company in building a strong customer and supplier base which has led to financial and operational success of the company over the period. The company maintains a portfolio of high-profile clients and continues to drive growth by onboarding new industrial players and expanding existing relationships.

• Comfortable Debt protection metrics :

  The company recorded comfortable debt protection metrics in FY2025, with a DSCR of 1.45x and an ISCR of 3.67x. marking an improvement from ISCR of 3.19x and DSCR of 1.36x in FY2024.It is projected to maintain an ISCR above 3.90x and a DSCR above 1.49x in the coming years.

• Growth in the scale of operations :

  The company has marked a significant improvement in its operating performance during FY2025 and FY2026 (P) compared to FY2024. This growth is primarily driven by an increase in sales volume and the strategic addition of new Original Equipment Manufacturers (OEMs) to its portfolio, including Nissan, MG Motor India, Ather, and Suzuki Motorcycle. Along with revenue growth, the company’s profitability and operating margins have also improved. This upward trend is expected to continue, supported by the commissioning of a new manufacturing unit to meet rising demand, this facility will be operational by Mid of April 2026. Steady order flow, combined with growing market demand and a diversified portfolio of reputed clients, provides high visibility for the achievement of future projections and the sustained growth of the company.

• Moderate leverage profile, albeit supported by the increased value of fixed assets. :

  Overall, the adjusted leverage profile of the company remained at a moderate level, as reflected by a Total Debt / Adjusted TNW of 1.77x and a TOL/Adjusted TNW of 3.58x in FY2025. Simultaneously, the significant improvement in the value of fixed assets (driven by the revaluation of land conducted in accordance with banking requirements, to reflect the current fair value of the fixed assets) has provided an additional security buffer for lender's mortgages.

• Minimal Counter Party Credit Risk :

  The company’s client base includes reputed Blue-Chip companies viz Maruti Suzuki India Ltd (MSIL), M G Motors, Renault, Nissan, Ather etc with whom they share long-term business relationships. These companies contribute over 50% of their annual revenue thus ensuring stable revenue visibility, prompt receivables and continuous order flow.

Credit Risks:

• Project completion and working capital management :

  With the new manufacturing unit in Kharkhoda becoming operational in mid-April 2026, the company has successfully mitigated major project execution and construction risks. The focus now shifts to "post-commissioning risk," specifically the timely ramp-up of capacity utilization and the stabilization of production yields to meet projected revenue targets. The company's ability to efficiently manage its working capital during this growth phase, while minimizing reliance on additional debt, remains a key monitorable factor.

• Vulnerability of Profit Margins :

  Prices for key raw materials, such as steel and aluminum are highly volatile and susceptible to global economic conditions. While the company leverages its competitive advantage and long-standing customer relationships to pass on these increased costs to its clients, fluctuations in commodity prices may still have impact on its profitability. As of date, the company is mainly dependent on the Automobile sector for generating revenue. These blue-chip Automobile companies, with their high market presence and control may influence significant pressure on profit margins of the company.

ANALYTICAL APPROACH - Standalone

For arriving at these ratings, BWR has considered the standalone performance of K R Auto Components Pvt. Ltd. BWR has applied its rating methodology as detailed in the Rating Criteria (hyperlinks provided at the end of this rationale).

RATING SENSITIVITIES

The company’s ability to improve its scale of operations, maintain efficient working capital management, improving liquidity profile, and maintain satisfactory gearing levels will remain the key rating sensitivities.

Upward:

• Growth in scale of operations and revenue, while maintaining operating profit margin of above 8.00% and net profit margin of more than 3.5%, on a sustained basis.
• Total Debt/Adjusted TNW below 1.50x. and TOL/Adjusted TNW below 3.00x
• Current ratio above 1.30x.
• DSCR and ISCR to remain at projected levels (DSCR above 1.49x and ISCR above 3.85x).

Downward

• The ratings could be downgraded if there is a decline in the revenue by more than 10% from projected levels and net profit margin going below 2.00%.
• DSCR below 1.40x and ISCR below 3.00x.
• Current ratio diminishing to less than 1.05x. and Cash Conversion Cycle exceeding 120 days.
• Total Debt/Adjusted TNW of more than 2.00x.

LIQUIDITY INDICATORS - Adequate

The company has adequately covered its interest and CPLTD obligations with sufficient EBITDA and Net Cash Accruals in the recent years. It has also maintained comfortable debt protection metrics, with an ISCR of 3.67 times and a DSCR of 1.45 times in FY2025, which improved from ISCR of 3.19 times and a DSCR of 1.36 times in FY2024. The current ratio increased to 1.14 times in FY2025 from 1.04 times in FY2024. As per the projected financials, the company is well-positioned to service its financial obligations with sufficient internal cash accruals in the coming years. The company has recorded an average utilization of 85.00% of its working capital limit over the last one year and the unutilized working capital limits will serve as an additional buffer which will help in tiding over short-term cash flow mismatches. Considering all these factors, the company's liquidity position is assessed as "Adequate".

ABOUT THE ENTITY

K R Auto Components Pvt. Ltd. (KRACPL) was incorporated on 14/03/1984, headquartered in Faridabad, Haryana. The company is engaged in manufacturing of MV parts, Tools & Dies, Aluminum and other Sheets mainly for automobile companies. It has 4 manufacturing units located in Faridabad with total installed capacity for manufacturing 46,200 MT of finished products and proposed to install a new unit in the near location. KRACPL is managed by Mr. K K Sharma, Mr. K L Sharma, Mr. D K Sharma, Mr. Vinod Sharma with their family members and friends.

ESG Profile

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

Environmental: The company demonstrates a commitment to environmental stewardship, particularly through its recent expansion into the Electric Vehicle (EV) segment by onboarding clients like Ather and MG Motor. Its manufacturing operations utilize a Just-in-Time (JIT) process, which inherently reduces resource waste and optimizes energy consumption during production cycles. The newly commissioned unit in Kharkhoda has been developed on land successfully converted for industrial use (CLU), ensuring compliance with zoning and environmental land-use regulations. Future sustainability will rely on its ability to formalize a Carbon Roadmap and transition its energy mix toward renewable sources to meet the evolving green-procurement mandates of its global clients.

Social: The company maintains a strong social profile rooted in its long-standing relationships with reputed OEMs and technical expertise. Safety is a core operational pillar, with the company striving for ISO 45001 compliance to manage workplace risks across its Faridabad and Kharkhoda facilities. Through its collaboration with OEM technical teams, the company fosters human capital development, ensuring its staff is trained in advanced tooling and prototype development. Labor law compliance remains a priority, with structured HR policies governing minimum wages, overtime, and the prohibition of forced labor, which are essential for maintaining the "Preferred Vendor" status.

Governance: The company maintains a structured governance framework that emphasizes operational accountability and alignment with stringent automotive industry standards. Its board-level oversight focuses on long-term strategic planning, particularly in managing the transition toward new-age mobility and the expansion of its manufacturing footprint. By adhering to the rigorous audit protocols and quality guidelines of global OEMs, the company ensures a high degree of transparency and ethical conduct within its production and supply chain processes. It is further evidenced by a strong internal compliance culture, ensuring that all manufacturing units operate within the legal and regulatory frameworks of the industrial sectors they serve.

KEY FINANCIAL INDICATORS (Standalone)

Key Parameters	Units	FY 23 - 24 (Audited)	FY 24 - 25 (Audited)	FY 25 - 26 (Unaudited - Others(10 Months))
Operating Revenue	Rs.Crs.	418.33	479.62	452.42
EBITDA	Rs.Crs.	25.37	32.75	31.38
PAT	Rs.Crs.	7.29	9.74	11.50
Tangible Net Worth	Rs.Crs.	53.10	146.61	158.02
Total Debt / Tangible Net Worth	Times	2.04	0.86	0.89
Current Ratio	Times	1.04	1.14	1.07

KEY COVENANTS OF THE FACILITY RATED

The terms of sanction of the rated facilities include standard covenants normally stipulated for such facilities. Some of these are listed below:

• USL of Rs. 7.00 Cr. to be sub-ordinated to the borrowed Debt.
• EBITDA margin of more than 6%.
• Debt/EBITDA less than or equal 4.75x.
• TOL/Promoters Fund (ATNW+USL) less than or equal to 3x.

STATUS OF NON-COOPERATION WITH PREVIOUS CRA

Not Applicable

ANY OTHER INFORMATION

None

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	120.00	BWR BBB+/Stable (Assignment)	NA	NA	NA	NA	NA	NA
FB SubLimit	ST	(75.00)	BWR A2 (Assignment)	NA	NA	NA	NA	NA	NA
		(75.00)	BWR A2 (Assignment)	NA	NA	NA	NA	NA	NA
		(75.00)	BWR A2 (Assignment)	NA	NA	NA	NA	NA	NA
Non Fund Based	ST	10.00	BWR A2 (Assignment)	NA	NA	NA	NA	NA	NA
NFB SubLimit	ST	(10.00)	BWR A2 (Assignment)	NA	NA	NA	NA	NA	NA
		(6.00)	BWR A2 (Assignment)	NA	NA	NA	NA	NA	NA
		(2.00)	BWR A2 (Assignment)	NA	NA	NA	NA	NA	NA
Grand Total		130.00	(Rupees One Hundred Thirty Crores Only)

Hyperlink/Reference to applicable Criteria

• General Criteria
• Approach to Financial Ratios
• Short Term Debt
• Trading Entities
• Manufacturing Company

Analytical Contacts
Mohammed Farzan Rating Analyst mohammed.f@brickworkratings.com	Suryanarayan N Associate Director - Ratings suryanarayan.n@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	Others	Cash Credit - Proposed	3.76	_	3.76	Simple##
2	Yes Bank	Bank Guarantee - Sanctioned	_	10.00	10.00	Simple##
	Sub-Limit (Letter of Credit) - Sanctioned		(2.00)
3	Yes Bank	Term Loan - Out-standing	4.58	_	4.58	Simple##
4	Yes Bank	Term Loan - Sanctioned	7.50	_	7.50	Simple##
5	Yes Bank	Term Loan - Out-standing	1.58	_	1.58	Simple##
6	Yes Bank	Term Loan - Out-standing	12.54	_	12.54	Simple##
7	Yes Bank	Term Loan - Out-standing	5.04	_	5.04	Simple##
8	Yes Bank	Term Loan - Out-standing	10.00	_	10.00	Simple##
9	Yes Bank	Cash Credit - Sanctioned	75.00	_	75.00	Simple##
	Sub-Limit (Bank Guarantee) - Sanctioned		(6.00)
	Sub-Limit (Letter of Credit) - Sanctioned		(10.00)
	Sub-Limit (Purchase Order Financing) - Sanctioned		(75.00)
	Sub-Limit (Sales Invoice financing ) - Sanctioned		(75.00)
	Sub-Limit (Working Capital Demand Loan) - Sanctioned		(75.00)
Total			120.00	10.00	130.00
TOTAL (Rupees One Hundred Thirty 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.