Rating Rationale

Brickwork Ratings has upgraded the long-term ratings for bank loan facilities of Gramaudyogik Shikshan Mandal to BWR BBB+ /Stable and removal from the ISSUER NOT COOPERATING* category for the bank loan facilities of Rs 50.68 Crs.

Brickwork Ratings (BWR) has upgraded the ratings of Gramaudyogik Shikshan Mandal (the trust), considering factors such as Vast experience and reputation of the management in the education sector, a comfortable financial risk profile, and the rating also factors in improvement in its operational performance and GSM’s satisfactory financial risk profile marked by improvement in total operating income, comfortable gearing and moderate debt coverage metrics, and steady operating and net surplus generated by its operations. However, the ratings are constrained by a highly competitive sector with exposure to high regulatory risks associated with the stringent compliance requirements of relevant regulatory authorities. 

The rating outlook has been retained as "Stable" as BWR believes that Gramaudyogik Shikshan Mandal'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 scale of operations and profitability margins show sustained improvement. The rating outlook may be revised to 'Negative' if the financial risk profile deteriorates.

For assigning the rating, BWR has relied upon the last 3 years of audited financials till FY25 and Provisional FY26 and projected financials for FY27 and FY28, and publicly available information and clarification provided by management. 

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

• Vast experience and reputation of the management in the education sector :

  GSM was established in 1975 to encourage educational activities in Maharashtra, particularly in Aurangabad and its nearby areas. Over the last four decades, GSM has established 20 institutes in different fields of education and industrial training. Dr. Yadnavir Anandrao Kawade (President) who holds an M.E. and a Ph.D, is the founding member of GSM, and has spent more than 50 years in the education and training sector. Furthermore, Prof. Munish Rattanlal Sharma (General Secretary) and several other well-educated trustees, with a vast experience ranging from two to four decades in the field of education, are the key management personnel of the trust.

• Diverse presence across the education spectrum through established schools and colleges offering varied under graduate and PG courses :

  GSM, at present, has around 12000 students enrolled in 20 institutes, ranging from primary schools to post-graduate courses as well as targeted vocational training programmes. GSM, through its premier institutes, referred to as the Marathwada Institue of Technology (MIT) Group of institutes, offers a wide range of under-graduation and post-graduation courses. The graduation programmes include courses for engineering, architecture, food processing technology, agricultural science, health science and nursing. The post-graduation programmes include courses for engineering, food processing technology and architecture. The MIT Group also offers several job-specific technical programmes through diploma and industrial skill development courses.

• Comfortable financial risk profile  :

  The trust has reported a comfortable financial risk profile. Its Tangible Net Worth (TNW) improved from Rs. 321.64 crore as of March 31, 2025, to Rs. 344.01 crore as of March 31, 2026 (Provisional), driven by the year-on-year accretion of surplus after tax to reserves and surplus.

  Furthermore, the Total Debt-to-TNW and TOL-to-TNW ratios improved from 0.20x and 0.26x as of March 31, 2025, to 0.06x and 0.13x as of March 31, 2026, respectively. This strengthening was supported by an increased tangible net worth, timely repayment of term loans, and moderate working capital utilization. Additionally, the short-term liquidity of the trust, as indicated by the current ratio, remains healthy at 2.46x in FY26, compared to 1.59x in FY25. 

• Regulatory Risks :

  While the Indian education sector is rapidly privatizing, regulatory hurdles remain a formidable threat to institutional stability. For entities like Gramaudyogik Shikshan Mandal (GSM), maintaining compliance is a high-stakes balancing act across both educational and healthcare standards. The educational institutions and hospitals under GSM operate within a stringent regulatory environment governed by statutory bodies such as the Maharashtra University of Health Sciences (MUHS), the National Medical Commission (NMC), the Indian Nursing Council (INC), and the All India Council for Technical Education (AICTE). Because these regulatory bodies fix both seats and fees for professional courses, the trust has limited flexibility to adjust pricing in response to rising operational costs.

• High competition :

  GSM operates in a highly saturated educational landscape, particularly within the Aurangabad, Maharashtra region. Its primary student demographic is drawn from surrounding rural and semi-urban areas, making it highly sensitive to local shifts in the market. Gramaudyogik Shikshan Mandal (GSM) faces intensifying competition from an increasing number of private and public educational institutions established in its immediate vicinity. This surge in nearby campuses has diluted GSM's traditional student base, which historically relies on demand from surrounding villages and local districts.

Going forward, the ability of the trust to report healthy enrolment ratios and steady growth in student strength, improvement in overall credit risk profile, and efficient management of working capital requirements would be the key rating sensitivities.

Positive: The ratings may be upgraded if there is an increase in operating revenue to Rs.170.00 Crs and above, along with net profit margins to be maintained above 9% and operating margins to be maintained at current levels. Further, marked by a comfortable capital structure and substantial improvement in debt protection metrics, besides other factors favoring an upgrade.

Negative: The ratings may be downgraded if there is a decline in revenue and net profit from the existing levels. 

The Trust's liquidity position is considered adequate, supported by net cash accruals of Rs 22.77 crore in FY2026(P) as against repayment obligations amounting to Rs 6.08 crore. Further, the company is expected to generate sufficient net cash accruals in the range of Rs 27.73 - Rs 29.20 crore as against its debt servicing obligation of Rs 8.05 crore for FY2027-2028. The current ratio reported by the company is 2.46x in FY2026(P).  Its capex requirements are modular and expected to be funded using debt of Rs. 15 crore, for which it has sufficient headroom. Its unutilized bank lines are more than adequate to meet its incremental working capital needs over the next one year. 

The institutions demonstrate an adequate ESG profile based on their environmental, social, and governance practices. For educational institutions, governance is a key factor influencing the overall ESG assessment.

Environmental: The trust has reflected the institution’s commitment to sustainability and resource efficiency. These may include energy-efficient campus buildings, use of renewable energy sources such as solar, biogas, waste reduction and recycling programs, water conservation measures, and sustainable procurement practices, including digital education tools to reduce paper consumption. 

Social: Social factors indicate the institution’s focus on inclusive and safe learning environments. Key elements may include equitable access to education for all socio-economic groups, promotion of diversity and inclusion among staff and students, and employee health and safety initiatives. 

Governance: Governance considerations highlight the institution’s adherence to regulatory and ethical standards. These may include compliance with educational laws and standards, accreditation and licensing status, and oversight of academic quality and faculty accountability. 

Gramaudyogik Shikshan Mandal (GSM), Aurangabad, Maharashtra, India is the parent Trust established in 1975 under Bombay Public Trust Act and also registered under Society Registration Act. Over the last four decades, GSM has established 20 Institutes and Centers of Excellence developed in different fields of Engineering and Technology. GSM through its premier institutes referred to as Marathwada Institute of Technology (MIT), namely MIT Group of Institution,s offers education and training in 55+ Undergraduate/Post Graduate courses including science, architecture, management, agriculture & food, engineering, technology, and many more. GSM has grown organically in three important provinces of India, viz. Maharashtra, Delhi, and Uttar Pradesh. More than 12000 full-time students are on different campuses from Primary to post-graduate education and vocational training. 

The Trust also runs a 100-bed multi-specialty hospital and Five Well Equipped Modern Operation Theatres, which has attached MIT Nursing College offering BSc. MIT also has university-approved research centers for research programs in various engineering streams which leads to Ph.D. The different institutes under GSM host laboratories approved by the State Govt., CPCB, NABL, ISO, and industry-scale laboratories, especially in the areas of polymer & agriculture engineering. 

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

Not Applicable 

BWR Board of Directors have no influence over rating decisions, nor do they sit on the rating committee or review, discuss or evaluate any credit rating during the Board meetings.

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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