Detailed Rationale

Crisil Ratings has reaffirmed its ratings on the bank facilities of Triton Valves Limited (TVL) at ‘Crisil BBB/Stable/Crisil A3+’.

 

The rating reaffirmation continues to reflect extensive experience of about 5 decades in the industry and TVL’s established market position in the domestic automobile tube valves and cores segment along with patented products and proven design capabilities. These strengths are partially offset by the company’s moderate scale of operation, limited bargaining power with OEMs and working capital intensive nature of operations. TVL’s consolidated revenues has grown by 14% on-year to ~Rs.488 crore in fiscal 2025, on the back of healthy volumes off-take from OEMs and scale up of operations in subsidiaries - Tritonvalves Future Tech Private Limited (TVFT) and Tritonvalves Climatech Private Limited (TVCT). The revenue from subsidiaries TVFT and TVCT grew healthy in fiscal 2025 on the back of increase in sales to external clients and addition of new clients in HVAC segment respectively. Revenues are expected to grow by 7-8% over the medium term supported by an increase in realizations, change in product mix and rising contribution from subsidiaries as they secure new external orders.

 

Operating profitability declined to 6.4% in fiscal 2025 compared to 7.2% a year ago, due to decline in gross margins on account of rising input prices, mainly brass – alloy of cooper and zinc and due to TVL selling brass borings to external vendors on repurchase basis, necessitated due to inconsistent availability of raw material for brass mills. Besides, share of TVFT sales to external clients has increased which led to incurring higher transportation and inventory holding costs leading to moderation in profitability. The operating margins were 6.3% in first quarter fiscal 2026 and over the medium term, the profitability levels will remain steady in the range of 6.5-7.0% supported by price hikes and cost optimization measures taken at group level to improve overall efficiency.

 

Financial risk profile continues to remain adequate supported by equity infusion in past thereby improving the networth to ~Rs 109 cr as of March 2025. The company had also received Rs.10.44 crore from investors through conversion of compulsorily convertible share warrants in September 2025, which was earlier envisaged to be received in last fiscal, and will further improve the financial risk profile. The company incurred Rs 16 crore capex in fiscal 2025 and expects to incur ~Rs 6-7 cr capex over the medium term. Due to delay in the receipt of equity, the company has availed a term loan sanction of Rs 11.25 crore in April 2025 to fund the capex plans, of which company has availed Rs. 5.2 crore till date and will draw another Rs. 3 crores in the current fiscal. The short term (ST) borrowings increased from Rs 87 crores in fiscal 2024 to Rs 105 crore in fiscal 2025 on account of increase in the working capital requirement as the company resorted to maintain higher inventories to meet spot orders. The short-term debt as on March 2025, includes TREDS limit utilization of Rs. 5.43 crore and buyer credit limit of Rs. 8 crore and balance in form of cash credit facility. Debt protection metrics were stable in fiscal 2025 with stable profitability like interest cover and NCA/AD at 2.52 times and 0.12 times as on March 31, 2025, as against 2.41 times and 0.13 times respectively in previous fiscal. Going forward, debt protection metrics is expected to remain stable.

 

Liquidity profile of the company will remain adequate with net cash accruals expected at around Rs. 19-20 crore along with equity raise of Rs 10.44 crore and new term loan sanction of Rs. 11.25 crore which will be more than sufficient for annual capex requirement Rs. 6-7 crore, debt repayments of Rs.9-10 crore and incremental working capital requirements. The company has working capital lines (at consolidated level) of ~Rs. 100 crore which remained utilized at an average of over ~93% for last 6 months ending August 2025. Besides, the company also has sanction of working capital lines of Rs. 15 crores, where the lenders will allow utilization post security creation and perfection will is expected to be completed by end of November 2025. Liquidity is also supported by TREDS limit of Rs. 10 crs which is utilized ~50%. As the capex plans are now expected to be funded though term debt already tied up, company is expected to utilize the funds raised from equity to make creditor payments thereby improving drawing power and pare down the short-term borrowing by end of this fiscal, which will remain a monitorable.

Analytical Approach

Crisil Ratings has consolidated the business and financial risk profiles of TVL and its subsidiaries - Triton Valves Hongkong Ltd (incorporated in November 2018) and two wholly owned subsidiaries set up in fiscal 2020 (TritonValves FutureTech Private Limited and TritonValves Climatech Private Limited) as these entities have considerable business and financial linkages. 

 

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 in valves and cores used for automotive tyre tubes: Triton is the leader in the domestic automotive tube and tube valves, tubeless valves, and cores segment with ~60% market share in tube and tyre valves and 85-90% in tubeless valve industry. It supplies to almost all key tyre manufacturers in India, including MRF Ltd, Apollo Tyres Ltd, JK Tyre and Industries Ltd, and Ceat Ltd. The key customers account for more than ~60% of the organised segment of the domestic tyres and tubes market, and TVL caters to tube types across vehicle categories manufactured in India. The Quality Control Order (QCO) for automotive valves and cores becomes mandatory for India-led consumption (expected by first quarter of fiscal 2027) will further help company to boost its market position.

 

The subsidiaries namely, TVFT is engaged in manufacture of extruded brass rods and coils, special copper alloys – (non-ferrous industry and as backward integration of TVL) and TVCT is engaged in manufacture of service valves/ ball valves, evaporator valves, and access valves for Heating, ventilation, and air conditioning (HVAC) industry which has gained new clients like Daikin, Samaung etc.

 

Further, to enhance overall efficiency, board of TVL had approved the merger of TVCT with the parent company TVL in September 2023 and all documents have been submitted to regulatory authorities. The process is currently pending with NCLT and expected to be completed by end of fiscal 2026.

 

TVL continues to focus on new product development and has secured a patent for Pressure Relief Valves (PRV) valves for the Electric Vehicle (EV) battery packs for 2-Wheelers and 3-Wheelers. Currently, TVL is the sole manufacturer and supplier to major OEMs like TVS Motors and other EV OEMs. Besides, company recently started supplying the valves compatible with Tyre Pressure Monitoring System (TPMS) system, to few global tier-1 clients such as Bosch, Continental and Sensata. These valves are capable of sharing real time tyre pressure levels to vehicle’s dashboard. Recently, the company entered into a long-term 5-year contract with Bosch to supply TPMS valves.

 

Extensive experience of the promoters: The promoters have experience of more than 48 years in the auto ancillary business with TVL established in 1976. The company was founded by (Late) Mr. M V Gokarn, and is currently managed by his son, Mr. Aditya Gokarn. Mrs Anuradha Gokarn, wife of Mr. M V Gokarn, continues to lead the promoter group. The promoters have infused funds to support growth and sustainability in tough times. Continued need based support from the promoters will remain a key monitorable.

Key Rating Drivers - Weaknesses 

Moderate scale and working capital intensive nature of operations: Despite being the market leader and operating for over three decades, scale of operation remains moderate. The key limitations being a small value, but a key product for its customers, and the moderate size of the organized segment of the market for valves and cores and faces still competition from the Indian importers/ low-touch manufacturers of Chinese imports. However, with the implementation of the QCO for automotive valves & cores, TVL is expected to benefit from likely slow-down in imports-led sales execution by other players in the market. Manufacturers of these products remain exposed to threat of new entrants or possibility of large tyre manufacturers catering to all or a portion of their valve requirements in-house. Besides, a moderate scale of operations and net worth constrain the ability to withstand business or cyclical pressures. Company has now been diversifying its product basket and venturing into backward integration through its subsidiaries- TVFT and TVCT.

 

TVL operates in a working capital-intensive business, which require high inventory holding due to wide product portfolio along with long production and cycles. This necessitates maintaining a large inventory stock of raw materials such as brass and rubber components leading to higher inventory days. Further, TVL extends reasonable credit terms to its OEM customers to maintain long term relationships, without any commensurate credit from its key vendors, stretching the working capital. Moreover, the company have taken strategic decision to maintain higher inventory to meet the spot orders. Hence the inventory days stretched from 70 days in fiscal 2024 to 81 days in fiscal 2025.

 

Susceptibility of operating margin to volatility in commodity prices, and fluctuations in forex rates: The price of key raw material (brass, which accounts for 75% of input costs) is prone to fluctuations, as it is inherently linked to the international demand and supply scenario. Besides, the company imports 50% of its brass requirement, which exposes it to risks associated with adverse commodity and forex movements. Company has limited bargaining power with the OEMs thereby exposing it to fluctuations in raw material prices. While the company has price passthrough clause embedded in contracts, the operating margins witnessed compression in past few fiscals, given steep rise and volatility in commodity prices, which the company was unable to pass on to the customers in its entirety. Though commodity prices is expected to increase, the cost optimization measures and few price hikes will help the company to maintain steady operating margins. Besides, the company is seeking a price correction for non-raw material cost increase and has received positive outcomes from some customers already.

Liquidity Adequate

Cash accruals of around Rs 19-20 crore per annum expected over the medium term will be adequate to meet annual debt repayment obligation of Rs 9-10 crores. The company has raised Rs 10.44 crores equity in September 2025. Fund-based limits at consolidated level of ~Rs.100 crore (TVL-54.5 crore; TVFT-42.5 crore and TVCT -2.5 crore) have been utilized ~93% for past six months. Company also has TREDS limit of Rs. 10 crs which is ~50% utilized. Besides, liquidity is also supported by term debt sanction of Rs. 11.25 crore of which Rs. 6 crore is yet to be availed. The company is expected to undertake annual capex of about Rs 6-7 crore over the medium term, which is expected to be funded through mix of internal accruals, term debt and cash balance from recent equity raise. Liquidity also benefits from access to promoter support in the form of unsecured loans as demonstrated in the past.

Outlook Stable

Crisil Ratings believes that TVL will continue to benefit from its established position in the domestic tube valve and cores segment, supported by steady rise in scale of operations, driven by volume growth across TVL and its subsidiaries. The financial risk profile is expected to be adequate with recent equity infusion and adequate accruals; however, bank loan utilization continues to be elevated. Timely promoter support in form of equity infusion and unsecured loans in case of financial exigencies will continue to support the liquidity profile of the company.

Rating Sensitivity Factors

Upward factors

• Significant growth in revenues while sustaining the operating margins leading to higher cash accruals.
• Subsidiaries achieving profitability and contributing meaningfully towards revenue diversification
• Strengthening of capital structure and debt protection metrics, with NCA/AD sustaining at 0.2 times and above

 

Downward factors

• Decline in scale of operations and sustained moderation in operating margins impacting overall cash generation.
• Larger than expected debt-funded capex, or stretch in working capital requirements, weakening the company’s financial risk profile, such as interest coverage sustaining below 2.2 times.
• Delay in stabilization of operations in service valves segment catering to HVAC industry (Tritonvalves Climatech)
• Sustained high bank loan utilization levels of over 90%

About the Company

TVL, incorporated in 1976, manufactures valves and cores that are used in automobile tyre tubes. The company was set up by Mr M V Gokarn and is currently managed by his son, Mr Aditya Gokarn (managing director). The promoter group holds 45.69% equity in the company. Triton supplies to almost all major tyre manufacturers in India/ vehicle Manufacturers/EV manufacturers and has maintained its leadership position for over a sustained period of time.

 

TVL has 3 major subsidiaries viz. Triton Valves Climatech Private Limited (TVCT) Triton Valves FutureTech Private Limited (TVFT) Triton Valves Hongkong Limited (TVHK). TVCT was set up as a wholly owned subsidiary in Jan 2020 to manufacture service valves/cores for room/commercial air conditioners. TVFT was set up in 2020 and is engaged in manufacturing of extruded brass rods and coils as backward integration to TVL. TVHK was incorporated in Hongkong as a special purpose vehicle for furthering imports into and exports out of India, due to its proximity with overseas vendors based out of China and other Asian countries and raising loans at competitive rates.  However currently TVHK does not have any operations and is company plans to wind down the operations by 2027. Company is currently in the process of merging TVCT with TVL which is expected to be completed by end of fiscal 26.

Any other information: Not applicable