CRISIL has assigned its ratings of ‘B-/Negative/P4’ to the various bank facilities of Reliable Autotech Pvt Ltd (Reliable Autotech). The ratings reflect Reliable Autotech’s weak financial profile, and exposure to customer concentration risks. These weaknesses are, however, partially offset by the company’s established relationships with reputed original equipment manufacturers (OEMs).

Outlook: Negative
The ‘Negative’ outlook reflects the ongoing slowdown in the automotive sector, and Reliable Autotech’s weak financial risk profile and limited pricing flexibility. The outlook may be revised to ‘Stable’ if the company’s operating margins and debt protection measures improve considerably. Conversely, the rating may be downgraded if there is a further deterioration in debt servicing capacities.

About the Company
Reliable Autotech, the flagship company of the Reliable group, was set up in 1998 by Mr. Rajendra Bagwe, Mr. Devendra Bapat and Mr. Amol Chitnis. Reliable group started its operation from 1984 & has 25 years of experience in this field. It manufactures heavy pressed parts and components, and tools and dies for the auto sector; it also assembles components such as front and rear doors, brake parts, brackets, and chassis parts. The company also has a presence in the farm equipment segment — manufactures and supplies fenders, front axles and hoods to tractor manufacturers. Reliable Autotech’s dedicated export unit caters to the requirements of OEMs in USA, UK, France, Germany, Spain and other countries. For 2007-08, (refers to financial year, April 1 to March 31) Reliable Autotech reported a profit after tax (PAT) of Rs. -(56.81) million on net sales of Rs. 968.15 million, as against a PAT of Rs. 81.05 million on net sales of Rs.799.95 million for 2006-07.