| Ideaforge Technology Limited | ||
| Rating outlook revised to 'Stable'; Rating Reaffirmed | ||
| 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 revised its outlook on the corporate credit rating of Ideaforge Technology Limited (IFTL; part of the Ideaforge group) to ‘Stable’ from ‘Negative’ while reaffirming the rating at ‘Crisil BBB’.
The revision in outlook reflects the improvement in the business risk profile of the Ideaforge group, with operating performance rebounding in the fourth quarter of fiscal 2026, which is expected to continue over the medium term. The group’s revenue increased to Rs 227 crore in fiscal 2026 from Rs 162 crore in fiscal 2025. The earnings before interest, tax, depreciation and amortisation (Ebitda) margin was at 2.6% in fiscal 2026 compared with a loss in fiscal 2025. The group’s order book of more than Rs 310 crore as of April 2026 provides adequate revenue visibility over the medium term.
The financial risk profile remains strong with comfortable capital structure and robust liquidity. The group had healthy cash and equivalent including mutual funds and fixed deposits (FDs) of around Rs 128 crore as on March 31, 2026, of which, more than Rs 100 crore was unencumbered.
The rating continues to reflect the established market position of the Ideaforge group in the unmanned aerial vehicle (UAV) industry and its strong financial risk profile. These strengths are partially offset by exposure to risks inherent in tender-based business, dependence on government orders and working capital-intensive operations. |
Analytical approach Crisil Ratings has combined the business and financial risk profiles of IFTL, its subsidiary ideaforge Technology Inc, and joint venture First Forge Technology Inc, which are strategically important to, and have substantial operational integration with IFTL. All the entities are collectively referred to as the Ideaforge group.
Please refer to 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 in the UAV industry: The promoters' experience of over a decade, established relationships with suppliers and customers, and the group's sustained focus on research and development (R&D) have yielded a diverse range of innovative products and solutions in the drone industry. The product profile includes NETRA V4PRO, Q4i, Q6, NETRA V4+, SWITCH. The group has added to the portfolio by upgrading to NETRA 5 and SWITCH V2, launching ZOLT, a new generation tactical class UAV, and through a co-innovation program for YETI (a long-range logistics UAV). This led to revenue growth to Rs 227 crore in fiscal 2026 from Rs 162 crore in fiscal 2025. The revenue is likely to grow at a steady rate over the medium term, in line with geographical diversification, healthy demand, strong order book, and continuous R&D and product addition.
Strong financial risk profile: The financial risk profile is supported by strong adjusted networth of more than Rs 397 crore as on March 31, 2026. In the absence of any dividend outgo, the networth will remain healthy over the medium term. Despite substantial R&D expenses, low reliance on external debt and healthy networth have kept the capital structure healthy, as indicated by gearing and total outside liabilities to adjusted networth ratios of 0.18 time and 0.43 time, respectively, as on March 31, 2026. The capital structure is expected to remain comfortable over the medium term, backed by healthy accretion to reserve. Debt protection metrics were healthy, too, with interest coverage and net cash accrual to adjusted debt ratio at 6.81 times and 0.36 time, respectively, for fiscal 2026. The financial risk profile will remain strong with comfortable accretion to reserve, healthy profitability and moderate reliance on external debt. |
Key rating drivers - Weaknesses Exposure to risks inherent in tender-based business and dependence on government orders: Revenue and profitability depend on the ability to successfully bid for orders and their timely execution. While favourable government regulations and the group’s established market presence mitigate regulatory risks, any impact of changes in regulations will remain monitorable.
Government and defence contracts historically account for a majority of the group’s topline. Any shift in defence budget allocation or delays in clearing tender approvals could affect performance. The tender-based model involves extensive field trials and bureaucratic processes, and revenue booking depends on execution milestones and dispatch schedules. As a result, severe revenue and profit lumpiness is intrinsic to defence and government contracts.
Working capital-intensive operations: Gross current assets (GCAs) were 236–560 days over the three fiscals ended March 31, 2026. IFTL has a receivables cycle of 80–90 days and maintains inventory of 120–150 days, necessitated by the lead time for imports and a diversified product basket. The company maintains higher inventory due to uncertainties in the global supply chain and geopolitical situations. This leads to large working capital requirement, which is funded through credit from suppliers of 30–40 days and internal accrual, leading to moderate dependence on working capital borrowings. With increase in revenue, incremental working capital requirement will remain high and its management will be monitorable. |
Liquidity Adequate The fund-based bank limit utilisation was moderate at 13% on average for the 12 months through January 2026. With negligible debt obligation, expected annual cash accrual of Rs 55–60 crore over the medium term will support liquidity. The group had healthy cash and equivalent including mutual funds and FDs of around Rs 128 crore as on March 31, 2026 (more than Rs 100 crore unencumbered). The current ratio was healthy at 9 times as on March 31, 2025, and is expected over 2 times over the medium term. Internal cash accrual and unutilised bank lines are expected to be sufficient to meet the incremental working capital requirement over the medium term. |
Outlook Stable Crisil Ratings believes the Ideaforge group will continue to benefit from the extensive experience of its promoters and their established relationships with customers, and its healthy financial risk profile. |
Rating sensitivity factors Upward factors
Downward factors
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About the group IFTL was incorporated in 2007. The Ideaforge group manufactures and markets UAV systems such as wide-range megaphone drones, Q series drones and switch UAV drones, which are used for security, defence, homeland security, and enterprise applications such as mapping, surveillance and security, survey and inspection.
IFTL has an ancillary business of providing training and maintenance services for UAV systems. It got listed on the National Stock Exchange and Bombay Stock Exchange in July 2023.
ideaForge Technology Inc is a wholly owned subsidiary of IFTL. It was established in the US in September 2022 to expand into international markets.
First Forge Technology Inc was formed as a 50:50 joint venture with First Breach Inc in the US for licensing, design, engineering, manufacturing, and distribution of specific UAVs, including the Netra V4 Pro, in the US. |
Key financial indicators - Consolidated – Crisil Ratings-adjusted numbers
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Any other information: Not Applicable |
Note on complexity levels of the rated instrument: |
Annexure - Details of Instruments
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Annexure - List of Entities Consolidated
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| Annexure - Rating History for last 3 Years | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Annexure: List of instruments and names of regulators of the instruments As required by SEBI CRA Circular dated Feb 10, 2026, a list of activities or instruments falling under the purview of various FSRs, along with the names of respective FSRs, is being disclosed below:
* Includes securitisation transactions involving assignee payout, acquirer's payout. ~ The rated instrument may involve issuance of different instruments such as debt securities (listed or otherwise), bank loans, commercial paper (listed or otherwise), etc. The regulator of the instrument may accordingly be SEBI, RBI or MCA and can only be determined upon issuance. In PRs subsequent to issuance(s), Crisil Ratings Limited shall separately capture the rated quantum details along with names of respective regulators. ^ Includes bank facilities such as liquidity facility, second loss facility that are part of securitisation transactions. # There is no instrument being rated and hence, Regulator of the Instrument is not applicable. The rating scale and definitions are being followed as stipulated in SEBI Master Circular for CRAs. @ These ratings were assigned during regulatory regime prior to introduction of SEBI CRA Circular dated Feb 10, 2026 and the investor side regulators have accordingly been included.
Note: Kindly note that for activities or instruments falling under the purview of FSRs other than SEBI, the grievance/dispute redressal mechanisms and investor protection mechanisms provided by SEBI shall not be available. |
Criteria Details
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