Rating Rationale

Brickwork Ratings has assigned a long-term rating of BWR BBB-/Stable and a short-term rating of BWR A3 to the bank loan facilities of Voltech O and M Services Private Limited (VOMSPL).

The ratings are supported by the company’s established presence in the technical O&M services sector, experienced promoters, reputed government and PSU clientele, and a strong order book providing revenue visibility. The company has also demonstrated steady improvement in its scale of operations, profitability, debt protection metrics, along with a conservative leverage profile.

However, the ratings are constrained by the working capital-intensive nature of operations, exposure to delayed receivables and retention money from government clients, and risks related to project execution and contract renewals.

The Stable outlook reflects the expectation that VOMSPL will maintain steady business and financial performance over the medium term, supported by strong order execution, growing demand in power and infrastructure sectors, and continued promoter backing.

The rating is based on audited financials for FY24, FY25, and FY26, projected financials for FY27 and FY28, along with publicly available information and management clarifications.

• The sanction terms include standard covenants generally stipulated for such facilities.
• Unsecured loans from promoters/directors considered towards ATNW shall remain subordinated and shall not be withdrawn until the tenure of the bank facilities.

• Established Promoter Track Record & Group Synergies :

  VOMSPL benefits from the promoter’s (Mr. M. Umapathi) extensive industry experience of over 40 years. The company leverages operational synergies, customer touchpoints, and network support across the parent entity’s (Voltech Engineers Private Limited) 14 regional offices in India and overseas.

• Strong Revenue Visibility & High Client Retention :

  The company holds an unexecuted order book of Rs. 208.41 Cr (as of August 2026), providing revenue visibility. Established execution history in critical utility infrastructure (such as Kudankulam Nuclear Power Station, where O&M support has been continuous since commissioning) reduces competitive L1 price bidding risks and ensures high client retention.

• Improving Receivables Cycle & Reputed PSU Counterparty Profile :

  The primary customer base consists of established public sector undertakings and government utilities, including NTPC, NPCIL, PowerGrid, and the Ministry of Railways. Realization efficiency has improved, with collection days reducing from 140 days in FY24 to 93 days in FY26, backed by zero historical bad debt write-offs.

• Working Capital Intensity & Blocked Retention Funds :

  Operations remain working capital intensive due to delayed billing cycles on specific utility contracts (such as Bangalore Metro and Railways) and funds tied up in retention money. Retention receivables aged over 180 days stood at Rs. 6.41 Cr as of March 31, 2026.

• Moderate Net Profit Margins & Labor Cost Inflation Exposure :

  Since skilled and semi-skilled manpower is the main operational cost (~Rs. 62.86 Cr in employee expenses against Rs. 79.61 Cr net revenue in FY26), profitability is sensitive to wage inflation.

Going forward, the company’s ability to improve its revenue profile and strengthen its financial risk profile will remain the key rating sensitivities.

Positive:

• Growth in operating income by around 25% and expansion of PAT margin to 4% and above, along with enhanced cash accruals and a stronger cash position.
• Sustenance of healthy financial risk profile.

Negative:

• Decline in operating income below 20%, leading to a deterioration in profitability and financial risk profile.
• Any substantial elongation in receivable days, leading to increased reliance on working capital borrowings.
• Material weakening in the company's liquidity position.

Voltech O and M Services Pvt. Ltd. maintains an adequate liquidity position, supported by healthy cash accruals and comfortable working capital utilisation. The company reported cash and bank balances of Rs. 2.09 crore as on 31 March 2026 (A). Current ratio stood at 1.70 times in FY26 (A). The company generated gross cash accruals of Rs. 3.62 crore in FY26 against Rs. 0.40 crore CPLTD obligations in FY26. The Interest Service Coverage Ratio (ISCR) remained healthy at 3.52 times in FY26. Further, the company's working capital limits remained moderately utilised, with an average utilisation of around 90% (with HDFC Bank).

Voltech O and M Services Private Limited maintains an adequate Environmental, Social, and Governance (ESG) profile, broadly aligned with the operational characteristics of the power sector operations and maintenance industry.

Environmental (E): Direct environmental impact is limited and primarily linked to site resource use and operational waste during maintenance. The company supports the clean energy transition through O&M services for solar, wind, and nuclear facilities, supplemented by group-level CSR eco-drives and beach cleanups.

Social (S): Key social factors center on site safety and manpower management for over 2,700 personnel operating in high-voltage and nuclear sites. The company maintains full statutory benefit compliance and contributes to community CSR programs focused on education, youth skill development, and rural women empowerment.

Governance (G): Directed by promoter-directors Mr. M. Umapathi and Mr. S. Manikandan, with vertical-specific operational management. Governance is supported by standard internal accounting, regular statutory audits, and operational alignment with parent entity Voltech Engineers Private Limited.

Voltech O and M Services Private Limited (VOMSPL) is a leading provider of Operation and Maintenance (O&M) services, specializing in electrical, mechanical, and Control & Instrumentation (C&I) systems. The company delivers technical O&M solutions across power generation plants (Thermal, Nuclear, Hydro, Diesel, and Gas), pooling substations, renewable energy assets (Wind and Solar), metro rail/railways, airports, seaports, oil & gas facilities, data centers, and heavy process industries such as steel, cement, sugar, and paper.

Established on January 28, 2009, the company has an operating track record of over 17 years. It operates as a private limited entity managed by its Directors, Mr. Umapathi Murugesan (Founder, Chairman & Managing Director) and Mr. S. Manikandan (Director). The company is headquartered at Chennai, Tamil Nadu.

The entity operates as a specialized subsidiary of the Voltech Group, an Indian engineering and manufacturing conglomerate originally founded in 1995 by Mr. Umapathi Murugesan. While the broader Voltech Group engages in manufacturing transformers, switchgears, and control panels, Voltech O and M Services Private Limited functions exclusively as the Group's dedicated technical service arm, employing over 2,000 workforce personnel across India. 

The Complexity Indicator refers to the ease with which the returns associated with the rated instrument could be estimated. It does not indicate the risk related to the timely payments on the instrument, which is rather indicated by the instrument's credit rating. It also does not indicate the complexity associated with analysing an entity's financial, business, industry risks or complexity related to the structural,transactional or legal aspects. Details on the complexity levels of the instruments are available on BWR's website Complexity Levels.

Not Applicable

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Brickwork Ratings (BWR), a Securities and Exchange Board of India [SEBI] registered Credit Rating Agency and accredited by Reserve Bank of India [RBI]. BWR is the 5th agency to get a credit rating registration in India in 2009 and its corporate office in Bengaluru. It has a country-wide presence with representatives in 150+ locations. Canara bank is an institutional investor in Brickwork.

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