| Om Power Transmission Limited | ||||||
| Ratings upgraded to 'Crisil BBB / Stable / Crisil A3+ '; Rated amount enhanced for Bank Debt | ||||||
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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 upgraded its ratings on the bank facilities of Om Power Transmission Ltd (OPTL; Formerly known as Om Power Transmission Private Limited) to ‘Crisil BBB/Stable/Crisil A3+’ from ‘Crisil BBB-/Stable/Crisil A3’.
The upgrade reflects the sustained improvement in the business risk profile of OPTL, backed by steady growth in revenue to Rs 279.78 crore in fiscal 2025 from Rs 183 crore in fiscal 2024, and with higher-margin contracts in fiscal 2025 improving the operating margin to 12.87% from 8.25%. The revenue growth has been consistent and may remain so over the medium term as well, led by the healthy order book of Rs 775 crore as of August 2025. The company booked sales of ~Rs 164 crore till September 2025 in fiscal 2026 with operating margin of 10.58%. Sustenance of the operating margin above 12% will be monitorable.
The financial risk profile is likely to remain comfortable on the back of healthy accretion to reserve and infusion of Rs 24 crore by way of private placement in the first half of fiscal 2026, with no major, debt-funded capital expenditure (capex) over the medium term.
The ratings continue to reflect the extensive experience of the promoter in the heavy industrial equipment and transmission lines industry. the company’s strong order book and above-average financial risk profile. These strengths are partially offset by large working capital requirement and susceptibility to risks inherent in tender-based business and volatility in operating margin. |
Analytical Approach Crisil Ratings has evaluated the standalone business and financial risk profiles of OPTL. |
Key Rating Drivers - Strengths Extensive experience of the promoter and strong order book The promoter has more than three decades of experience in the heavy electrical equipment and transmission lines industry. His strong understanding of the market dynamics and healthy relationships with suppliers and customers should continue to support the business. The extensive experience of the promoters has helped the company bag steady contracts and scale up operations, with topline rising to ~Rs 278 crore in fiscal 2025 from Rs 183 crore in fiscal 2024. Order book of around Rs 775 crore as of August 2025 to be executed over the next 2-3 years provides revenue visibility over the medium term. Consistent growth in the order book and timely execution of contracts shall drive the business risk profile.
Healthy financial risk profile The capital structure has been healthy, as indicated by gearing of 0.26 time and total outside liabilities to adjusted networth (TOLANW) ratio of 1.05 times as on March 31, 2025. Debt protection metrics were robust, with interest coverage ratio at 6.15 times for fiscal 2025 (3.09 times in fiscal 2024) and net cash accrual to adjusted debt ratio at 1.23 times (0.3 time). The debt protection metrics are expected at similar levels over the medium term. The financial risk profile will remain supported by the expected revenue growth and healthy accretion to reserve. |
Key Rating Drivers - Weaknesses Susceptibility to risks inherent in tender-based business and volatility in operating margin The company lays electrical lines and undertakes power transmission/distribution for turnkey projects under the engineering, procurement and construction (EPC) model. Projects are secured through tenders floated by government or private entities and revenue performance depends on the ability to win tenders, particularly those fetching high margins. The company’s operating margin improved to 12.87% in fiscal 2025 from 8.25% in fiscal 2024 and has historically fluctuated between 8.25% and 11.07%. In the absence of escalation clause in contracts with customers, the margin is susceptible to volatility in input cost. Sustenance of the margin amid increasing scale will be monitorable
Large working capital requirement The nature of the EPC business results in a stretched working capital cycle, with the long project execution cycle of 18-30 months leading to high reliance on short-term debt. OPTL had gross current assets (GCAs) of 165 days as on March 31, 2025, driven by receivables of 118 days (down from 139 days as on March 31, 2024), which include Rs 43.86 crore of security deposits and retention money. The substantial receivables are due to sizeable retention money blocked in projects till the end of the performance-guarantee period and due to milestone-based billings in EPC projects. While the company’s receivables have reduced, they remain high in absolute terms, at Rs 90.11 crore as on March 31, 2025, with major collections from GETCO and other clients such as Uttar Gujarat Vij Company Limited. The GCAs may remain high because of the margin money for bank guarantee, security deposit and retention of capital, and skewed revenue in the last quarter of the fiscal. Any further stretch in the working capital cycle could hamper financial flexibility and will be monitorable. |
Liquidity Adequate Liquidity should remain supported by the ample surplus available in cash accrual and bank lines. Bank limit utilisation averaged 76% for the 12 months through October 2025. Cash accrual is expected at Rs 24-27 crore per annum, against yearly debt obligation of Rs 1.5-2.0 crore over the medium term. The current ratio was healthy at 1.81 times as on March 31, 2025. Strong gearing and moderate networth will also aid financial flexibility. |
Outlook Stable OPTL will `continue to benefit from the extensive experience of its promoter, and its healthy order book and comfortable financial risk profile. |
Rating sensitivity factors Upward factors
Downward factors
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About the Company OPTL was set up in 1994 as a proprietorship concern named OM Enterprise and was reconstituted as a private limited company with the name “OM Power Transmission Private Limited” in 2011. OPTL is an electrical contracting company and undertakes EPC and operations and maintenance of transmission lines and substations up to 400 kilovolt, including industrial power distribution. The company is based in Ahmedabad (Gujarat) and is promoted by Mr Kamlesh Patel. |
Key Financial Indicators
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Any other information: Not applicable |
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Annexure - Details of Instrument(s)
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* - Issuer did not cooperate; based on best-available information
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Criteria Details
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