Rating Rationale

Rating Rationale

April 29, 2025 | Mumbai

Nash Energy (I) Private Limited

'Crisil BBB+/Stable/Crisil A2' assigned to Bank Debt

Rating Action

Total Bank Loan Facilities Rated	Rs.193 Crore
Long Term Rating	Crisil BBB+/Stable (Assigned)
Short Term Rating	Crisil A2 (Assigned)

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 assigned its 'Crisil BBB+/Stable/Crisil A2' ratings to the bank loan facilities of Nash Energy (I) Private Limited (NEIPL, part of the Nash Group).

The ratings continue to reflect an established market position in the sheet metal component segment, sound operating efficiencies and robust financial risk profile. These strengths are partially offset by moderate customer concentration in revenue profile, vulnerability to fluctuations in raw material prices and project risk associated with Nash Energy (I) Limited.

Analytical Approach

For arriving at its ratings, Crisil Ratings has combined the business and financial risk profiles of Nash Industries India Private Limited (NIIPL) and its group entities CMW Pressings, Nash Products (both rated 'Crisil A/Stable'), also included NEIPL; collectively referred to as the Nash group. This is because all the entities have a common set of promoters and significant operational and financial fungibilities. Unsecured loans of Rs 33.10 crores as on date from promoters have been treated as neither debt nor equity as it will be maintained in the company over the medium term

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:

Established market position and sound operating capabilities: Benefits from the group's established presence of four decades, high quality products, superior operational capabilities, and enduring relationship with customers should continue to support the business. The group has established clientele, which includes reputed customers in both auto and non-auto sectors and diversified end-user industries and geographical presence mitigate the impact of slowdown in a particular segment and region. The operating performance of fiscal 2025 was driven by revenue growth of 35% year on year which is mostly caters to established customers in , banking, renewables and automobiles. While the improvement in business risk profiles is expected to be sustained over the medium term, control on profitability, control over employee costs, scalability of the new project and economic downturns in the market remain a key monitorable

Strong financial risk profile: The financial risk profile may remain strong over the medium term owing to robust networth, comfortable gearing, and healthy debt protection metrics, supported by controlled reliance on external bank debt. Expected Networth was strong at Rs 532 crore and expected gearing comfortable at 0.98 time as on March 31, 2025. With better accretion to reserve and no sizeable debt-funded capex plan over the medium term, the capital structure should improve. Debt protection metrics will remain robust, backed by expected improvement in operating profitability, and reduction in interest cost. Expected Interest coverage and net cash accrual to total debt ratios are at 5.54 times and 0.3 time, respectively, in fiscal 2025.

Weaknesses:

Moderate customer concentration risk in revenue and volatility in raw material prices: The group derives close to 60% of its revenues from its top 5 customers. Most of its major customers belong to Automotive, ATM hardware and Power and Electricals segments. Consequently, revenue flow is exposed to risks related to moderate customer concentration. However, the diversification into new segments such as clean energy will help the group reduce its customer concentration going forward. Maintaining an inventory of 85 - 95 days exposes the group to fluctuations in prices of key raw materials, steel and copper. However, this risk is partly mitigated by the sales contract with a price variance clause to pass on fluctuations in raw material prices to customers.

Project Risk associated with Nash Energy (I) Private Limited: Company has set up a Lithium Ion phosphate cell manufacturing with a capacity of 600 MW for a project cost of Rs 130 crore including debt of Rs 80 crore. The plant was operational from Q3FY25 and is expected to generate revenue in fiscal 2026 with customer acquisition on going. Customer acquisition in the 2 wheeler/3 wheeler and 4 wheeler segment and timely scale up of the project will remain a critical monitorable for the group:

Liquidity: Adequate

Bank limit utilisation is moderate at around 88 percent for the past twelve months ended January 2025. Cash accruals are expected to be over Rs 160 crore which are sufficient against term debt obligation of Rs 36-49 crore over the medium term. In addition, it will be act as cushion to the liquidity of the company. Current ratio are healthy at 1.36 times on March 31, 2024. The promoters are likely to extend support in the form of equity and unsecured loans to meet its working capital requirements and repayment obligations. High or moderate cash and bank balance of around Rs 22 crore as on March 31, 2025.

Outlook: Stable

Crisil Ratings believes the Nash group will continue to benefit over the medium term from steady customer demand and healthy financial risk profile

Rating sensitivity factors

Upward Factors:

Improvement in scale of operations coupled with sustenance of healthy Ebidta margin of over 16% leading to generation of healthy cash accruals
Sustenance of healthy financial risk profile along with healthy operating cash accruals supporting comfortable debt metrics along with healthy liquidity levels
Improvement in working capital cycle leading to lower bank limit utilization.
Timely scaling of operations in Nash Energy (I) Private Limited

Downward Factors:

Any significant and sustained decline in revenue and profitability with EBITDA margin below 10% leading to decline in accruals
Substantial capital expenditure (capex), sizeable acquisition or unrelated diversification and/or any large stretch in working capital cycle leading to weakening of financial and liquidity profile.
Substantial stretch in working capital cycle creating pressure on liquidity

About the Company

The Nash group commenced operations by setting up Nash Products in 1971. The Nash group manufactures engineering assemblies and precision parts for aerospace, automotive, automated teller machines, alternative energy, power protection, electrical, and other industries. The group is managed by Mr Sanjay Wadhwa and Mr Sandeep Wadhwa. Nash Industries, a partnership firm set up in 2001, was reconstituted as a private-limited company with the current name as on April 4, 2012.

Key Financial Indicators

Combined
As on / for the period ended March 31	Unit	2024	2023
Operating income	Rs crore	1,235.01	1,116.34
Reported profit after tax	Rs crore	76.68	93.93
PAT margins	%	6.21	8.41
Adjusted Debt/Adjusted Net worth	Times	0.88	0.82
Interest coverage	Times	4.71	7.69

NIIPL
As on / for the period ended March 31	Unit	2024	2023
Operating income	Rs crore	1,172.74	1,060.82
Reported profit after tax	Rs crore	71.11	84.13
PAT margins	%	6.05	8.09
Adjusted Debt/Adjusted Net worth	Times	0.79	0.94
Interest coverage	Times	4.56	7.49

CMW
As on / for the period ended March 31	Unit	2024	2023
Operating income	Rs crore	26.31	25.07
Reported profit after tax	Rs crore	3.68	3.17
PAT margins	%	13.97	12.66
Adjusted Debt/Adjusted Net worth	Times	0.33	0.34
Interest coverage	Times	13.49	13.35

NP
As on / for the period ended March 31	Unit	2024	2023
Operating income	Rs crore	43.84	49.18
Reported profit after tax	Rs crore	4.65	3.89
PAT margins	%	10.60	7.91
Adjusted Debt/Adjusted Net worth	Times	0.18	0.19
Interest coverage	Times	15.89	9.48

NEIPL
As on / for the period ended March 31	Unit	2024	2023
Operating income	Rs crore	0.04	0.00
Reported profit after tax	Rs crore	-3.27	-2.79
PAT margins	%	NA	NA
Adjusted Debt/Adjusted Net worth	Times	-4.83	-2.31
Interest coverage	Times	-41.94	-258.24

Any other information: Not applicable

Note on complexity levels of the rated instrument:
Crisil Ratings` complexity levels are assigned to various types of financial instruments and are included (where applicable) in the 'Annexure - Details of Instrument' in this Rating Rationale.

Crisil Ratings will disclose complexity level for all securities - including those that are yet to be placed - based on available information. The complexity level for instruments may be updated, where required, in the rating rationale published subsequent to the issuance of the instrument when details on such features are available.

For more details on the Crisil Ratings` complexity levels please visit www.crisilratings.com. Users may also call the Customer Service Helpdesk with queries on specific instruments.

Annexure - Details of Instrument(s)

ISIN	Name Of Instrument	Date Of Allotment	Coupon Rate (%)	Maturity Date	Issue Size (Rs.Crore)	Complexity Levels	Rating Outstanding with Outlook
NA	Bank Guarantee	NA	NA	NA	2.00	NA	Crisil A2
NA	Cash Credit	NA	NA	NA	100.00	NA	Crisil BBB+/Stable
NA	Letter of Credit	NA	NA	NA	5.00	NA	Crisil A2
NA	Proposed Long Term Bank Loan Facility	NA	NA	NA	51.00	NA	Crisil BBB+/Stable
NA	Term Loan	NA	NA	31-Dec-29	15.00	NA	Crisil BBB+/Stable
NA	Term Loan	NA	NA	31-Dec-29	20.00	NA	Crisil BBB+/Stable

Annexure – List of entities consolidated

Names of Entities Consolidated	Extent of Consolidation	Rationale for Consolidation
CMW Pressings	Full	Common management
Nash Products	Full	Common management
Nash Industries India Private Limited	Full	Common management
Nash Energy (I) Private Limited	Full	Common management

Annexure - Rating History for last 3 Years

	Current			2025 (History)		2024		2023		2022		Start of 2022
Instrument	Type	Outstanding Amount	Rating	Date	Rating	Date	Rating	Date	Rating	Date	Rating	Rating
Fund Based Facilities	LT	186.0	Crisil BBB+/Stable		--		--		--		--	--
Non-Fund Based Facilities	ST	7.0	Crisil A2		--		--		--		--	--

All amounts are in Rs.Cr.

Annexure - Details of Bank Lenders & Facilities

Facility	Amount (Rs.Crore)	Name of Lender	Rating
Bank Guarantee	2	The Federal Bank Limited	Crisil A2
Cash Credit	35	HDFC Bank Limited	Crisil BBB+/Stable
Cash Credit	50	The Federal Bank Limited	Crisil BBB+/Stable
Cash Credit	15	Citibank N. A.	Crisil BBB+/Stable
Letter of Credit	5	HDFC Bank Limited	Crisil A2
Proposed Long Term Bank Loan Facility	51	Not Applicable	Crisil BBB+/Stable
Term Loan	15	Citibank N. A.	Crisil BBB+/Stable
Term Loan	20	HDFC Bank Limited	Crisil BBB+/Stable

Criteria Details

Links to related criteria

Basics of Ratings (including default recognition, assessing information adequacy)

Criteria for manufacturing, trading and corporate services sector (including approach for financial ratios)

Criteria for consolidation

Media Relations	Analytical Contacts	Customer Service Helpdesk
Ramkumar Uppara Media Relations Crisil Limited M: +91 98201 77907 B: +91 22 6137 3000 ramkumar.uppara@crisil.com Kartik Behl Media Relations Crisil Limited M: +91 90043 33899 B: +91 22 6137 3000 kartik.behl@crisil.com Divya Pillai Media Relations Crisil Limited M: +91 86573 53090 B: +91 22 6137 3000 divya.pillai1@ext-crisil.com	Jayashree Nandakumar Director Crisil Ratings Limited B:+91 44 6656 3100 jayashree.nandakumar@crisil.com Athul Unnikrishnan Sreelatha Associate Director Crisil Ratings Limited B:+91 22 4040 5800 athul.sreelatha@crisil.com ACHUTH SEKHAR Manager Crisil Ratings Limited B:+91 22 4040 5800 ACHUTH.SEKHAR@crisil.com	Timings: 10.00 am to 7.00 pm Toll free Number:1800 267 3850 For a copy of Rationales / Rating Reports: CRISILratingdesk@crisil.com For Analytical queries: ratingsinvestordesk@crisil.com