| Clad Metal India Private Limited | ||||||
| Ratings reaffirmed at 'Crisil BBB+ / Stable / Crisil A2 ' | ||||||
| Rating Action | ||||||
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| Note: None of the Directors on Crisil Ratings Limited’s Board are members of rating committee and thus do not participate in discussion or assignment of any ratings. The Board of Directors also does not discuss any ratings at its meetings. | ||||||
| 1 crore = 10 million | ||||||
| Refer to Annexure for Details of Instruments & Bank Facilities |
Detailed Rationale Crisil Ratings has reaffirmed its ‘Crisil BBB+/Stable/Crisil A2’ ratings on the bank facilities of Clad Metal India Private Limited (CMIPL; part of the Kale group).
The ratings continue to reflect the group’s established market position, healthy scale of operations and comfortable financial risk profile. These strengths are partially offset by large working capital requirement and exposure to intense competition and volatile margins. |
Analytical Approach For arriving at its ratings, Crisil Ratings has combined the business and financial risk profiles of CMIPL, Elegant Coatings Private Limited (ECPL), Alpit Metal Works (AMW) and AK Engineering (AKE), collectively referred to as the Kale group. This is because the entities are in the same business and have common customers, management and treasury.
Please refer Annexure - List of Entities Consolidated, which captures the list of entities considered and their analytical treatment of consolidation. |
Key Rating Drivers - Strengths Established market position: The promoters have experience of more than two decade in manufacturing bond evaporators and metal pressed components for air conditioners (ACs) and refrigerators, along with other electronic consumer durables and electrical items. Consequently, the group has a reputed client base such as Godrej and Boyce Manufacturing Company Ltd, Whirlpool of India Ltd, Samsung India Electronics Pvt Ltd, Haier Appliances India Pvt Ltd, Blue Star Ltd and IFB Appliances among others. The group has established relationships with these clients, reflecting its quality of work and track record.
Healthy scale of operations: The revenue of the group increased to Rs 789 crore in fiscal 2025 compared with Rs 631.52 crore in fiscal 2024. The growth is driven by addition of new products and capacity expansion along with continued demand from existing clients. Group is undertaking capex for setting up production unit for ACs part and assembly of them which will further support scale over medium term. Revenue is expected to grow at around 5% at group level during fiscal 2026.
Comfortable financial risk profile: Net worth was healthy at Rs 211.8 crore and gearing comfortable at 0.9 time as on March 31, 2025. Gearing is expected at around unity time and total outise liability to adjusted new worth is expected at around 1.5 times over the medium term backed by healthy accretion to reserve despite moderately debt funded capex. Debt protection metrics were adequate, as reflected in interest coverage and net cash accrual to adjusted debt ratios of 3.5 times and 0.2 time, respectively, in fiscal 2025. Despite the ongoing debt-funded capex, the capital structure should remain comfortable over the medium term supported by healthy profitability and accretion to reserve. |
Key Rating Drivers - Weaknesses Large working capital requirement: Gross current assets (GCAs) were at 167 days on March 31, 2025, driven by inventory and receivables of 70 days and 62 days, respectively. GCAs are expected in the range of 150-170 days over the medium term as well. The working capital requirement remains sizeable owing to peak season towards the end of fiscals because of which inventory and receivables are large. However, the company has longstanding relationships and contracts with markets leaders and has not faced any major issues regarding realization or offtake.
Exposure to intense competition and raw material price volatility: The group faces intense competition in the sheet metal segment because of its fragmented nature. Also, maintenance of operating margins at healthy levels owing to volatility in input cost remains monitorable. Group’s operating margin declined to 8.5% during fiscal 2025 from 10.9% during fiscal 2024 due to increase in raw material prices Raw material prices have moderated which should support margins, however improvement of margin over medium term remains monitorable. |
Liquidity Adequate Bank limit utilisation is moderate at around 70% for the past twelve months ended September 2025. Cash accrual are expected to be in the range of Rs 500-54 crore which are sufficient against term debt obligation of Rs 17-20 crore over the medium term. Current ratio is moderate at 1.3 times on March 31, 2025. |
Outlook Stable Crisil Ratings believes the Kale group will continue to benefit from the extensive experience of its promoters. |
Rating sensitivity factors Upward factors
Downward factors
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About the Group ECPL, incorporated in 1996, manufactures sheet metal pressed components for home appliances such as televisions, refrigerators and ACs, and concealed electrical boxes, surface boxes and metal flush boxes used for electrical purposes.
CMIPL, incorporated in 2004,manufactures roll bond evaporators used in direct-cooling refrigerators and freezers.
AMW, a proprietorship firm of Mr Ashok Kale, manufactures copper tubing components, pencil driers, and aluminum and copper connectors for CMIPL.
AKE, a partnership firm, manufactures copper tubing components which are majorly used in roll bond evaporators.
The group is based in Aurangabad and is promoted by Mr. Ashok Kale and Ms Kalpana Kale. |
Key Financial Indicators
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Any other information: Not applicable |
Note on complexity levels of the rated instrument: |
Annexure - Details of Instrument(s)
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Annexure – List of entities consolidated
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| Annexure - Rating History for last 3 Years | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| All amounts are in Rs.Cr. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Annexure - Details of Bank Lenders & Facilities | ||||||||||||||||||||||||
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Criteria Details
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