| Goldmedal Electricals Private Limited | ||||
| Rating reaffirmed at 'Crisil A+/Stable' | ||||
| 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 A+/Stable' rating on the long-term bank facilities of Goldmedal Electricals Pvt Ltd (GEPL).
The rating continues to reflect the stable business risk profile of the company, supported by diversified product profile, established brand presence and extensive distribution network, and its strong financial risk profile. These strengths are partially offset by exposure to competition from both unorganised and organised brands and the susceptibility of operating margin to fluctuations in raw material prices.
Revenue grew 11% to Rs 2,697 crore in fiscal 2024 backed by growth of the consumer durables segment (which accounts for 50% of its sales). As on December 31, 2024, revenue was Rs 1,870 crore (Rs 1,889 crore a year earlier) and is expected to be marginally lower for the full fiscal 2025. Over the medium term, revenue is expected to grow 6-8% led by improved demand across product segments, continued geographic expansion and new product launches. Operating margin, which was higher at 12.6% in fiscal 2024 (11.5% in fiscal 2023), is expected to be 11-12% over the medium term led by diversity in product basket and segmental coverage.
GEPL is undertaking a Rs 350 crore capital expenditure (capex) for setting up capacities for existing (switches, fans) and new products (PVC pipes) in Mumbai and Hyderabad over the next two fiscals. Yearly cash accrual (above Rs 200 crore) will likely fund the capex. |
Analytical Approach Crisil Ratings has combined the business and financial risk profiles of GEPL and its subsidiary, Goldmedal Electro Pvt Ltd, as these entities have operational and financial linkages. Also, Crisil Ratings has included lease liabilities and channel financing in the borrowing.
Please refer Annexure - List of Entities Consolidated, which captures the list of entities considered and their analytical treatment of consolidation. |
Key Rating Drivers & Detailed Description Strengths:
It has a strong distribution network both in India and in neighboring countries, such as Nepal and Bhutan, backed by channel partners and regional teams. The company has implemented digital initiatives at various levels to directly connect with customers. It has launched various applications and collaborated with leading digital payment solution providers to facilitate digital invoice collection, accept digital orders, provide unified incentive schemes and reward customers, and accept digital payments. It has manufacturing units in Maharashtra and Rajasthan and an in-house product design facility in Mumbai. It continues to invest in its own design, tooling and testing facilities. This enables the company to manufacture electronic equipment with unique designs at affordable rates and diversify into various product categories.
Weaknesses:
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Liquidity: Adequate Cash and investment surplus stood over Rs 47 crore as on March 31, 2024. Fund-based bank limit of Rs 250 crore was utilised 31% on average over the 12 months through December 2024. Expected cash accrual of over Rs 200 crore per annum post dividend payout will sufficiently cover the planned capex of around Rs 350 crore over the medium term, thereby reducing reliance on external debt. |
Outlook: Stable Crisil Ratings believes the business risk profile of GEPL will benefit from its diversified product portfolio, strong distribution network, implementation of digital initiatives at various levels and the in-house R&D capabilities, enabling new product development at affordable rates. The financial risk profile should also be healthy, despite the large ongoing capex, supported by strong cash generation and the management’s commitment to exercise prudence. |
Rating sensitivity factors Upward factors:
Downward factors:
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About the Company Incorporated in 2007 in Mumbai, GEPL manufactures a wide range of electrical products, including switches, wires and cables, LEDs and lighting fixtures, fans, home automation systems, security systems, entertainment devices, doorbells and PVC pipes for residential buildings as well as commercial establishments.
It operates 22 branches and experience centres in major cities across India. The dealership network comprises more than 8,000 direct and indirect dealers all over India. Its manufacturing units are in Vasai, Maharashtra; Bhiwadi, Rajasthan; and Vijaywada, Andhra Pradesh. |
Key Financial Indicators
*Debt also includes lease liabilities and channel financing borrowing |
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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