| Menon Bearings 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 Menon Bearings Limited (MBL).
The ratings continue to reflect the established market position of MBL in the bearings industry driven by strong clientele and longstanding presence, and the company’s comfortable financial risk profile. These strengths are partially offset by revenue concentration in the automotive (auto) sector, susceptibility to fluctuations in raw material prices and foreign exchange (forex) rates, and modest scale of operations. |
Analytical approach Crisil Ratings has combined the business and financial risk profiles of MBL and its subsidiaries, which are strategically important to MBL and have significant operational integration.
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: Presence of over three decades in the bearings industry has enabled MBL to establish its position across diverse markets and industries. The company earns revenue by catering to original equipment manufacturers and replacement demand in domestic as well as overseas markets, which contributed 30–35% to revenue. The established market position and superior product quality allow MBL to command higher margins, reflected in operating margin of 18.65–20.39% for the two years through fiscal 2025. The margin is estimated at a similar level in fiscal 2026.
Strong clientele: The company has built healthy relationship with key clients, including John Deere, Tata Motors Ltd (‘Crisil AA+/Stable/Crisil A1+’), International Tractors Ltd and Brakes India Ltd. MBL is either the sole supplier or a major supplier of bearings for most customers. Steady flow of repeat orders and addition of customers resulted in revenue increasing to Rs 241 crore in fiscal 2025 from Rs 141 crore in fiscal 2021 and the revenue is estimated to have grown over 20% on-year in fiscal 2026.
Comfortable financial risk profile: The capital structure has been comfortable, as reflected in networth of Rs 158 crore, gearing of 0.27 time and total outside liabilities to adjusted networth ratio of 0.46 time as on March 31, 2025, and estimated at similar levels as on March 31, 2026. Debt protection metrics were strong, as indicated by interest coverage of 12.34 times and net cash accrual to adjusted debt ratio of 0.54 time for fiscal 2025 and estimated at similar levels for fiscal 2026. Despite debt-funded capital expenditure (capex) towards capacity addition in the bi-metal, alkop and brake divisions and solar capex undertaken in fiscal 2026 and likely to be undertaken in fiscal 2027, the financial risk profile is expected to remain healthy over the medium term with gradual repayment of term loans and healthy accretion to reserve. |
Key rating drivers - Weaknesses Revenue concentration in the auto industry: Of the total revenue, 80–90% comes from the auto sector and the remaining from the oil and gas, electrical and engineering industries. Within the auto segment, MBL derives bulk of its revenue from the commercial vehicle and tractor segments, which are inherently cyclical. Hence, any sharp reduction in demand from these segments, will adversely impact the credit risk profile of MBL.
Susceptibility to fluctuations in raw material prices and forex rates: Raw material costs comprise 45–50% of operating income/cost structure and the prices of the key raw materials, such as steel, aluminium scrap and metal sheets, are volatile. Moreover, exports account for 30–35% of revenue. Hence, the operating margin is susceptible to sharp movements in input prices and forex rates. Agreements with customers include price escalation clauses to periodically adjust selling prices based on movements in raw material prices. However, there is a lag in implementing price changes and operating margin is susceptible to any adverse movement in input prices. The operating margin was at 18.65–20.39% in the two years through March 2025 and its sustenance at healthy level will remain monitorable.
Modest, but increasing, scale of operations: Revenue was modest at Rs 241 crore in fiscal 2025 and is estimated to have grown 20% on-year in fiscal 2026. The modest scale of operations restricts pricing power with customers and suppliers. With capacity addition in all divisions, the revenue is expected to increase, but remain modest. Ramp up in operations while sustaining the operating margin will remain monitorable. |
Liquidity Adequate Cash accrual is expected at more than Rs 31 crore per annum, after factoring dividend payout, and will comfortably cover yearly term debt obligation of Rs 9–9.58 crore over the medium term. Bank limit utilisation averaged 35% during the 12 months through March 2026. Cash and equivalents stood at Rs 18.08 crore as on September 2025. The current ratio was healthy at 2.45 times as on March 31, 2025. |
Outlook Stable MBL will continue to benefit from its strong market position and established clientele and sustain its healthy financial risk profile. |
Rating sensitivity factors Upward factors
Downward factors
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About the group Incorporated in 1991 as part of the Kolhapur (Maharashtra)-based Menon group and promoted by Ram Menon and his family members, MBL manufactures auto components such as bearings, bushes, thrust washers and bi-metal strips at its plant in Kolhapur. It is listed on Bombay Stock Exchange and National Stock Exchange. Nitin Menon is the executive chairman of the company.
Menon Alkop Ltd, a wholly owned subsidiary of MBL, manufactures aluminium die casting and machined component products.
Menon Brakes Pvt Ltd is a wholly owned subsidiary of MBL, and manufactures brake lining and brake shoes.
Menon Bearings New Ventures Ltd, a wholly owned subsidiary of MBL, has no operations currently. |
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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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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