| Omnitech Engineering Limited | ||||||
| 'Crisil A- / Stable / Crisil A2+ ' assigned to 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 assigned its ‘Crisil A-/Stable/Crisil A2+’ ratings to the bank facilities of Omnitech Engineering Ltd (OEL; part of the Omnitech Engineering group).
The ratings reflect the group's strong track record of operations, supported by its qualified promoters with extensive experience in the engineering and capital goods industry; the ratings also factor in the group’s diversified end-user industry base and moderate financial risk profile. These strengths are partially offset by dependence on key customers, vulnerability of the operating margin to fluctuations in raw material prices and foreign exchange (forex) rates and large working capital requirement. |
Analytical approach Please refer Annexure - List of Entities Consolidated, which captures the list of entities considered and their analytical treatment of consolidation. |
Key Rating Drivers - Strengths Strong track record of operations, supported by qualified promoters with extensive industry experience: The group has established its strong presence in the precision engineering products manufacturing business. It has maintained strong profitability, reflecting in its focus on operational efficiency and cost management. The promoters, Mr Udaybhai A Parekh and Ms Kinneriben U Parekh, have experience of more than two decades in the engineering and capital goods industry, which has given them an understanding of the market dynamics and enabled them to establish healthy relationships with suppliers and customers. Diversified end-user industry base: The precision engineering products industry is a vital sector that produces high-precision components and systems used in various industries such as energy, motion control and automation, and industrial equipment systems. The Omnitech Engineering group has longstanding relationships with its customers 6uand suppliers. It caters to a diversified end-user industry base that includes oil and gas, power, agriculture, earth-moving equipment, hydraulics, airport ground support equipment, automation and valve. The diversified end-user industry base allows the group to overcome the risk of slowdown in a particular industry and achieve high growth. Moreover, ~75% of the group’s sales are in the overseas market, with presence in 22 countries.
Moderate financial risk profile: The group’s capital structure has been above average due to limited reliance on external funds, as indicated by gearing of 1.64 times as on March 31, 2025; however, total outside liabilities to adjusted networth ratio was weak at 2.01 times. With the recent fund raise of Rs 418 crore, capital structure is expected to improve over the medium term, which supports prepayment of term debt and planned capital expenditure (capex). Debt protection metrics were comfortable due to healthy profitability: interest coverage and net cash accrual to total debt ratios were 4.18 times and 0.24 time, respectively, for fiscal 2025; the metrics are expected to remain at similar levels over the medium term. |
Key Rating Drivers - Weaknesses Dependence on key customers: The group caters to reputed companies, majorly in the US and Europe. Manufacturers of precision engineering products may be heavily dependent on a few key customers, which can make them vulnerable to changes in customer demand or loyalty. Furthermore, the group has limited bargaining power against original equipment manufacturers. It has to maintain quality and continuously evolve its product offerings to sustain its position in the precision engineering products market. Large working capital requirement: Gross current assets were substantially high at 362 days as on March 31, 2025, due to high receivables and inventory levels. The group has to extend long credit period to clients, and holds large work in process and finished good inventory. |
Liquidity Adequate Bank limit utilisation was moderate at 88% on average for the 12 months through February 2026. Annual cash accrual is expected at over Rs 100 crore against yearly term debt obligation of Rs 20 crore over the medium term, and the surplus will cushion liquidity. The current ratio was moderate at 1.27 times as on March 31, 2025. The promoters are likely to extend equity and unsecured loans to meet working capital requirement and debt obligation. |
Outlook Stable Crisil Ratings believes the Omnitech Engineering group will continue to benefit from the extensive experience of its promoters and established relationships with clients. |
Rating sensitivity factors Upward factors
Downward factors
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About the group OEL (previously, Omnitech Engineering) was established as a partnership firm by Mr Udaybhai Parekh and Ms Kinnariben U Parekh in 2006. It was reconstituted as a private limited company in 2021. The company got its present name in 2024 after it was reconstituted as a closely held public limited company. OEL manufactures precision engineering products such as turned and machined parts, including pistons, stems, mandrils, couplings and connectors, shafts, hubs, cylinders and gear rings. The company caters to diverse industries such as agriculture, oil and gas, power, hydraulics, airport ground support equipment, and earth-moving equipment. OEL has two manufacturing facilities in Metoda and Chhapara in Rajkot district of Gujarat. Omnitech Group Inc is a US-based wholly owned subsidiary of OEL. It provides liaison and logistical services and is the marketing arm of OEL in the US.
Novatro Techsolutions Pvt Ltd was incorporated in December 2024 and provides software-related services. OEL holds 75.99% stake in the company. |
Key financial indicators
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Any other information: Not applicable |
Note on complexity levels of the rated instrument: 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. |
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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Criteria Details
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