| Macfos Limited | ||||
| Rating reaffirmed at 'Crisil BBB/Stable'; Rated amount enhanced for Bank Debt | ||||
| 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’ rating to the long tern bank facilities of Macfos Limited (Macfos).
The rating continues to reflect reflects the extensive experience of the promoters in the specialized electronics e-commerce business, diverse product ranges and availability of niche products and comfortable financial risk profile of the company. These strengths are partially offset by the growing yet moderate scale of operations, exposure to intense competition impacting margins, and increasing working capital requirements. |
Analytical Approach: Crisil Ratings has evaluated the business and financial risk profiles of Macfos on a standalone basis. |
Key Rating Drivers & Detailed Description Strengths: Extensive experience of the promoters in the specialized electronics e-commerce business: Experience of the technocrat promoters in the electronics e-retailing industry, their strong understanding of market dynamics has helped to establish relationships with diverse suppliers globally. Promoter has also diversified the distribution from retail to B2B over the years supporting the business risk profile
Diverse product ranges and availability of niche products: Macfos has principals/vendors in India as well as abroad, and is the exclusive distributor in India, for players such as Seeed Studio, Arduino, Eda-Tech, M5Stack, K5 Propulsion, Upside Down Labs, among others. With more than 71054 stock-keeping units (SKUs), over 150+ brands and tie-ups with over 210+ vendors, Macfos caters to diverse consumers, including manufacturers, corporates, educational institutions, researchers and developers, etc. Macfos will continue to benefit from its established distribution network, in-house IT infra in the e-commerce space and its wide product portfolio.
With promoters’ deep understanding of the new age technology, company is bringing up fully assembled products including drones under its own brand which should support growth and market presence of the company.
Comfortable financial profile: Capital structure is marked by net worth of Rs 70 crore as on March 31, 2025. Low reliance on external debt has led to comfortable gearing and total outside liabilities to tangible net worth (TOL/TNW) ratios of 0.29 time and 0.51 time, respectively, as on the March 31, 2025. The interest coverage and net cash accrual to total debt (NCATD) ratio are at 10.56 times and 0.91 times for fiscal 2025. Debt protection measures are expected to remain at similar level over the medium terms supported by accretion on reserves.
Weaknesses: Growing yet moderate scale of operations: Revenue has improved YoY with operating income of Rs.254.5 crore (Rs.125.1 crore for fiscal 2024) with the B2B business segment contributing around 60% whereas remaining coming from e-commerce. Growth is driven by the increasing no of SKUs, healthy order inflow and wider customer base. While average revenue per order improved during the fiscal sustainment of same with overall improvement in revenue remains monitorable.
Exposure to intense competition impacting margins: Macfos faces competition from domestic and global e-commerce portals, direct sellers/manufacturers and other unorganized players. Intense competition requires leads to periodic discounts and attractive schemes in order to stave-off competition and retain customers. Company margins seen continuous decline in margins to 9.6% during fiscal 2025 from 16.4% in fiscal 2022. Company share of corporate business has increased year on year from last 4 fiscals ending 2025 leading to discounts on bulk orders, which have impacted the margins. Maintenance of healthy margins with increasing revenue and SKUs remains critical.
Increasing working capital requirements: Operations of the company are moderately capital intensive in nature marked by GCA days of 138 days as on March 31st, 25 (101 days as on March 31st, 2024) driven by inventory of 89 days. Company has to maintain higher inventory (including slow moving inventory) for any upcoming demand and timely delivery. With increase in product ranges and increasing scale of operations control over the inventory maintenance remains monitorable. |
Liquidity: Adequate Bank limit utilization is moderate at around 57 percent for the past twelve months ended May-25. Cash accrual are expected to be over Rs 17 crore which are sufficient against term debt obligation of Rs 1-2 crore over the medium term. Current ratio is healthy at 2.7 times on March 31, 2025. Cash balances of Rs. 13 crore as of March 31st, 2025 supports liquidity. |
Outlook: Stable Crisil Ratings believes that Macfos will continue to benefit from its established distribution network and wide product portfolio in the e-commerce space. |
Rating sensitivity factors Upward factors
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About the Company Macfos is engaged in e-retailing of electronics items through its e-commerce store website ‘Robu.in’ and mobile applications. Products include robotic parts, drone parts, e-bike parts, internet of things and wireless items, 3D printers and their parts, do-it-yourself learning kits, development boards, raspberry Pi (single board computers and peripherals), sensors, motors, motor drivers, pumps, batteries, chargers, electronic modules & displays and various other mechanical and electronic components.
It is listed on the SME platform of the Bombay Stock Exchange.Operations are managed by the promoters, Mr Atul Maruti Dumbre, Mr Nileshkumar Purushottam Chavhan and Mr Binod Prasad. |
Key Financial Indicators
*Provisional |
Any other information: Not Applicable |
Note on complexity levels of the rated instrument: |
Annexure - Details of Instrument(s)
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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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