Karamveer Electronics Ltd.

Brickwork Ratings assigns the long-term ratings at BWR BBB-/Stable and the short-term ratings at BWR A3 for the Bank Loan Facilities of Rs. 50.00 Crs. of Karamveer Electronics Ltd.

Particulars

Facilities**	Amount(Rs.Crs.)	Tenure	Rating#
Fund Based	30.00	Long Term	BWR BBB - /Stable Assignment
Non Fund Based	20.00	Short Term	BWR A3 Assignment
	(2.00)
	(15.00)
Grand Total	50.00	(Rupees Fifty 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 assigns the long-term ratings at BWR BBB- /Stable and the short-term ratings at BWR A3 for the bank loan facilities aggregating to Rs.50.00 Crs of Karamveer Electronics Ltd.

The rating derives strength from the company's established track record in transformer manufacturing, extensive experience of the promoters, improving business profile supported by diversification into higher-capacity transformers and solar inverter duty transformers (IDTs), comfortable capital structure marked by strong net worth and moderate leverage and adequate liquidity supported by positive cash accruals and limited term debt repayment obligations. The rating also factors in healthy order visibility and favorable industry outlook driven by investments in the power transmission, distribution and renewable energy sectors. The rating is, however, constrained by the company's exposure to tender-based operations, susceptibility to fluctuations in prices of key raw materials such as copper, aluminium, CRGO steel and transformer oil, customer and geographical concentration towards government utilities, and high working capital intensity as reflected in elevated receivable levels.

The ‘Stable’ outlook indicates a low likelihood of rating change over the medium term. BWR believes JKaramveer Electronics Ltd.’s business and financial risk profile will be maintained over the medium term. The outlook may be revised to Positive if a sustained increase in the scale of operations and higher than envisaged profitability result in an improved financial risk profile and leading to stronger cash accruals and improved leverage. The outlook may be revised to Negative if lower than expected revenue or profitability, deterioration in working capital cycle due to elongation of receivables, weakening of liquidity or debt protection metrics, increase in leverage, adversely impacting the company's financial risk profile.

For assigning the rating, BWR has relied upon the last 3 years of audited financials till FY25, Provisional for FY26 and projected financials for FY26 & FY27, and publicly available information and clarification provided by management.

KEY RATING DRIVERS

Credit Strengths:

• Extensive Experience of Promoters :

  The company derives significant strength from the extensive experience of its promoter group in the transformer manufacturing industry. The operations are led by Mr. Vivek Jain, Mrs. Shikha Jain and Mr. Arnav Jain (Director). The promoters have more than three decades of experience in the manufacturing of transformers and allied products. The long operational experience of the promoters has enabled the company to establish strong relationships with customers, suppliers, utilities, and DISCOMs, thereby supporting order inflows and execution capabilities. Further, their extensive understanding of market dynamics, tender-based operations, technical requirements, and industry developments continues to support the company’s business profile and growth prospects.

• Moderate Financial Risk Profile :

  The company’s financial risk profile is moderate, supported by an improvement in scale of operations, profitability, and debt protection metrics. The tangible net worth improved to Rs.25.38 crore in FY26 from Rs.18.29 crore in FY25, primarily due to equity infusion and accretion of profits. Further, leverage indicators improved with Total Debt/TNW reducing to 1.33x in FY26 from 1.44x in FY25 and TOL/TNW improving to 2.50x from 3.37x during the same period. Debt coverage indicators also witnessed improvement with ISCR increasing to 2.79x in FY26 from 2.68x in FY25, while DSCR improved to 2.34x from 1.90x, supported by higher profitability and cash accruals.

Credit Risks:

• Exposure to tender-based operations and raw material price volatility :

  The company’s operations are largely dependent on government tenders and utility orders, exposing it to pricing pressure and order execution risks. Further, profitability remains susceptible to fluctuations in prices of key raw materials such as copper, aluminium, CRGO steel, transformer oil, and other inputs, which may impact margins.

• Working capital intensive operations :

  The company remains exposed to high working capital intensity as reflected by elevated receivable days of 124 days and working capital cycle of 107 days in FY26, mainly due to dependence on government utilities and tender-based business.

ANALYTICAL APPROACH - Standalone

For arriving at its ratings, BWR has considered the standalone performance of the company. BWR has applied its rating methodology as detailed in the Rating Criteria (hyperlinks provided at the end of this rationale).

RATING SENSITIVITIES

Going forward, the ability of the company to improve its scale of operations, profitability margins, overall credit risk profile and efficiently manage its working capital requirement would be the key rating sensitivity.

Positive Triggers:

• A significant improvement in the scale of operations, revenue exceeding Rs.200 Crs, operating margins of over 10% and net margin of over 6% on a sustained basis.
• Improvement in capital structure with Total Debt/TNW below 1.0x, improvement in the working capital cycle below 90 days.

Negative Triggers:

• Dip in revenue by 10% and EBIDTA and PAT by 5%, resulting in lower-than-expected net cash accruals
• Deterioration in the working capital cycle above 120 days due to further elongation in receivables.

LIQUIDITY INDICATORS - Adequate

The company’s liquidity profile remains adequate supported by net cash accruals of Rs.3.99 crore in FY26 against minimal repayment obligations, with CPLTD of only Rs.0.09 crore, primarily relating to vehicle loan instalments. The company has limited dependence on long-term debt, while liquidity is further supported by cash and bank balances of Rs.10.32 crore. The liquidity profile is further supported by promoter support through equity infusion and quasi-equity. The average working capital utilization of around 80-90%.

ABOUT THE ENTITY

Karamveer Electronics Limited was incorporated in 1987 and is engaged in the manufacturing of transformers, transformer lamination, and allied electrical equipment. The company operates manufacturing facilities at Meerut, Uttar Pradesh, and is involved in manufacturing distribution transformers, power transformers, amorphous core transformers, CSP transformers, and special-purpose transformers. The company primarily supplies its products to government utilities, DISCOMs, and industrial customers across various states in India.

The company has over 35 years of operational experience in the transformer industry and has installed more than 1 lakh transformers in networks across various regions. The existing manufacturing infrastructure comprises two operational plants with aggregate installed capacity of around 500 MVA per annum on a single-shift basis.

The management is led by experienced promoters and technical professionals having long-standing industry exposure. The Managing Director, Mr. Vivek Jain, is associated with industry-level transformer manufacturing associations and policy interactions within the power sector ecosystem.

ESG Profile

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

Environmental: Environmental risks are driven by high water usage, waste generation, and reliance on energy-intensive processes, making disclosures on water consumption, waste-management practices, renewable energy share, and emissions level particularly important. However, the company has obtained necessary environmental clearances from the relevant authorities and adheres to prescribed environmental norms.

Social: Social factors hinge on adherence to labour laws, accident prevention frameworks, and human-capital development, with metrics such as workforce mix, safety performance , and training initiatives offering insights into operational resilience. The company employs a workforce of 51 personnel comprising management, technical staff, skilled and unskilled labour and maintains standard health and safety practices at its manufacturing facilities.

Governance: Governance assessment focuses on board independence, committee effectiveness, and robustness of compliance systems, supported by readily available disclosures on board structure, audit mechanisms, and risk-management practices. Corporate governance practices are considered adequate for its scale of operations.

KEY FINANCIAL INDICATORS (Standalone)

Key Parameters	Units	FY 23 - 24 (Audited)	FY 24 - 25 (Audited)	FY 25 - 26 (Provisional)
Operating Revenue	Rs.Crs.	73.48	130.39	136.92
EBITDA	Rs.Crs.	3.18	7.36	8.11
PAT	Rs.Crs.	0.76	3.53	3.77
Tangible Net Worth	Rs.Crs.	14.98	18.29	25.38
Total Debt / Tangible Net Worth	Times	0.99	1.44	1.33
Current Ratio	Times	1.73	1.46	1.39

KEY COVENANTS OF THE FACILITY RATED

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

STATUS OF NON-COOPERATION WITH PREVIOUS CRA

Not Applicable

ANY OTHER INFORMATION

CRISIL has downgraded the rating to CRISIL B+/Stable/A4 under the Issuer Not Cooperating category and simultaneously withdrew the rating on 27Mar2026.

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	30.00	BWR BBB-/Stable (Assignment)	NA	NA	NA	NA	NA	NA
Non Fund Based	ST	20.00	BWR A3 (Assignment)	NA	NA	NA	NA	NA	NA
NFB SubLimit	ST	(2.00)	BWR A3 (Assignment)	NA	NA	NA	NA	NA	NA
		(15.00)	BWR A3 (Assignment)	NA	NA	NA	NA	NA	NA
Grand Total		50.00	(Rupees Fifty Crores Only)

Hyperlink/Reference to applicable Criteria

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

Analytical Contacts
Chinmaya R Rating Analyst chinmaya.r@brickworkratings.com	Nitika Srivastava Associate Director Ratings nitika.s@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	Canara Bank	Cash Credit - Sanctioned	15.00	_	15.00	Simple##
2	State Bank Of India (SBI)	Bank Guarantee - Sanctioned	_	5.00	5.00	Simple##
	Sub-Limit (Letter of Credit) - Sanctioned		(2.00)
3	State Bank Of India (SBI)	Cash Credit - Sanctioned	5.00	_	5.00	Simple##
4	UCO Bank	Cash Credit - Sanctioned	10.00	_	10.00	Simple##
5	UCO Bank	Bank Guarantee - Sanctioned	_	15.00	15.00	Simple##
	Sub-Limit (Letter of Credit (ILC)) - Sanctioned		(15.00)
Total			30.00	20.00	50.00
TOTAL (Rupees Fifty 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.