| Spectrum Electrical Industries Limited | ||||||
| Ratings upgraded to 'Crisil BBB+/Stable/Crisil A2 '; 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 upgraded its ratings on the bank facilities of Spectrum Electrical Industries Limited (SEIL) to ‘Crisil BBB+/Stable/Crisil A2’ from ‘Crisil BBB/Positive/Crisil A3+’.
The rating upgrade reflects the improved business risk profile while maintaining its moderate financial risk profile which is expected to sustain over the medium term.
SEIL expects double digit growth for the next 2 years which is primary driven by increasing orders from top customers. Company is under the execution stage of capex of approximately Rs 140 to Rs 150 crores in fiscal 2026 and fiscal 2027. With completion of capex, revenue growth will also be supported by ramp of new plants in fiscal 2027 with sustenance operating above 13.5% over the medium term.
The company’s business risk profile improved in the past 2 years, backed by healthy revenue growth and improvement operating margin. SEIL reported revenue of Rs 403.71 crore in fiscal 2025 against Rs 332.83 crore in fiscal 2024 driven by an increase in demand from end customer across diversified product portfolio. Operating margin has consistently improved in the past 4 years to 13.56% in fiscal 2025 against 13.24% in fiscal 2024, 10.61% in fiscal 2023 and 10.18% in fiscal 2022.
Financial risk profile continues to remain moderate with improvement in adjusted networth to Rs 189.84 crores as on March 31, 2025 against 169.68 crores as on March 31, 2024, and further improvement basis acceleration of profit into reserves.
The ratings reflect the extensive experience of the promoter, diversified product and service offerings and established relationships with key customers which have led to healthy market position. These strengths are partially offset by stretched by working capital cycle, timely completion of the project, susceptibility to cost overrun and delay in realization from customers. |
Analytical Approach Crisil Ratings has evaluated the consolidated business and financial risk of SEIL and its four subsidiaries.
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 presence in the industry, sound operational efficiencies and long-standing relation with its customer: The promoters of the company have over 3 decades of experience in the electrical equipment industry which has helped them to develop a deep understanding of the market dynamics. Over the years, the company has also established a healthy market position for its products while developing healthy relationships with key customers such as Schneider, Panasonic, EATON, Legrand, Hager, ABB etc. Customer concentration has on similar lines from overall 53% in fiscal 2024 to 50% in fiscal 2025 and same is further expected to continue over the medium term.
Diversified product and service offerings: The company has a diversified product portfolio which includes switchgear, wiring devices & accessories, electrical distribution boards, AC/DC EV Fast chargers, electrical control panels supported by in-house infrastructure, in design & development of injection mold & press tool manufacturing, precision press components with advanced surface treatment lines (electroplating & powder coating) equipped with advanced assembly lines.
The company also has its own research and development (R&D) facility and offers need-based services of electroplating, molding, stamping and tool room. Currently, it has four facilities in the state of Maharashtra and Karnataka.
The company is also under capex of adding new product services like copper forging products, wiring devices & accessories and switch gear products and a metal enclosure and fully automatic electroplating plant.
Moderate financial risk profile: Total outside liabilities to adjusted networth ratio was moderate at 1.21 times while networth was strong at Rs 189.84 crore, as on March 31, 2025 against Rs 169.68 crores as on March 31, 2024. Debt protection metrics remained comfortable, with adjusted interest coverage and net cash accrual to adjusted debt ratios of 4.42 times and 0.24 times, respectively, as on March 31, 2025. The financial risk profile is expected to remain on similar lines over the medium term basis the high debt funded capex under process. |
Key Rating Drivers - Weaknesses Moderate working capital cycle: The operations of the company continues to remain working capital intensive as highlighted in the gross current assets (GCA) of 196 days as on March 31, 2025. It is primarily driven by the high inventory days of around 82 days as the company maintains inventory buffer basis requirement from the dealers. The company also extends moderate credit period of around 60 to 90 days to customers.
Exposure to project risk: Company is executing capex of Rs 140 to Rs 150 crores under the multiple projects by enhancing the existing capacity and addition of new product lines. This project will be funded though the debt: equity contribution. The promoters of the company has also infused additional Rs 25 crores in form of unsecured loans into the business and same is expected to be maintained over the medium term. Timely completion of the project with no major cost and time overruns, and impact on operations, will remain key monitorable. Expected timeline for the commencement of the project is during Q1 fiscal 2027. |
Liquidity Adequate Net Cash accruals stood at Rs 34.89 crores in fiscal 2025 and same is further expected to improve and remain between Rs 50 to Rs 70 crores over the medium term against the repayment obligations for Rs 12 to 23 crores. Bank limits utilisation has remained high for the past 12 months ended November 30,2025 at approximately 80% and same has reduced in the past 6 months to 71%. Current ratio has remained moderate at 1.33 times as on March 31, 2025 |
Outlook Stable Crisil Ratings believes the business risk profile of SEIL will continue to benefit from the extensive experience of the promoters and the strong market position in the electrical equipment industry. |
Rating sensitivity factors Upward factors:
Downward factors:
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About the Company The company is engaged in design and manufacture of an extensive range of products under the electrical component domain having different applications and utilities over the last three decades. It has developed the ability to manufacture products across the value chain, right from concept and design to final delivery to the customer’s distribution network. The company has three manufacturing units in Maharashtra at Nashik and Jalgaon along with an R&D facility two facilities in Bangalore. It got listed on the SME platform of the National Stock Exchange in October 2018 and later migrated to main board of securities exchange in March 2025. |
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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Criteria Details
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