Akar Auto Industries Limited (AAIL), a prominent player in the automotive components sector, has received a significant boost to its credit profile. Infomerics Valuation and Rating Private Limited has upgraded the company's credit ratings, reflecting an improvement in its financial and operational performance.

Credit Rating Upgrade Details

The credit rating agency has revised AAIL's ratings as follows:

This upgrade applies to a total rated amount of Rs. 100.34 crore, encompassing both long-term and short-term facilities.

Factors Driving the Upgrade

The rating upgrade is attributed to several key factors:

1. Revenue Diversification: AAIL has successfully diversified its revenue streams, strengthening its business profile.
2. Backward Integration: The company's move towards backward integration through solar power generation is expected to yield significant benefits.
3. Operational Improvements: AAIL has demonstrated a strong operational outlook, supported by robust recovery in commercial vehicle sales.
4. GST Rate Reduction: The recent reduction in GST rates from 28% to 18% for commercial vehicles is anticipated to boost demand for AAIL's products.

Financial Performance

AAIL reported:

• Total Operating Income: Rs. 377.17 crore (2% year-on-year growth)
• EBITDA: Rs. 26.63 crore (10% increase from previous year)
• PAT: Rs. 6.46 crore (up from Rs. 5.49 crore)
• EBITDA Margin: Improved to 7.06% from 6.39%

Strategic Initiatives

AAIL has undertaken several strategic initiatives to enhance its operational efficiency and cost-effectiveness:

1. Solar Power Project: The company has installed 2 MW rooftop solar panels and is setting up a 5 MW solar power plant, expected to meet 75% of its power requirements and generate monthly savings of approximately Rs. 0.50 crore.
2. Locational Advantage: AAIL's manufacturing base in Aurangabad provides strategic benefits, including lower logistics costs and better access to OEMs and distributors.
3. Steel Sourcing: The company sources steel from its group entity, RL Steels and Energy Ltd., leading to significant transportation cost savings.

Outlook

Infomerics has assigned a 'Stable' outlook to AAIL, reflecting the potential for revenue growth given the uptick in the Indian auto industry. The ongoing capacity expansion and solar power projects are expected to support cost efficiency and profitability over the medium term.

While the upgrade is a positive development, it's important to note that AAIL still faces challenges, including a leveraged capital structure and exposure to cyclicality in the auto industry. However, the company's established relationships with reputed clients and its strategic initiatives are expected to mitigate these risks to some extent.

As Akar Auto Industries continues to navigate the dynamic automotive component industry, this credit rating upgrade may potentially enhance its ability to access capital and improve its standing with stakeholders. The company's focus on sustainability through solar power initiatives also aligns well with the growing emphasis on green technologies in the automotive sector.

Akar Auto Industries Limited , a prominent player in the auto components sector, has announced a significant change in its key managerial personnel. The company has appointed Mr. Deepak Kala as its new Company Secretary and Compliance Officer, effective September 17, 2025.

Appointment Details

Mr. Deepak Kala, an Associate Member of the Institute of Company Secretaries of India (ICSI) with membership number ACS 77623, brings over three years of valuable experience to his new role. His expertise spans corporate legal and secretarial compliance functions for listed companies, with a strong focus on corporate governance, SEBI regulations, secretarial compliance, and corporate laws.

Professional Background

Kala's educational background includes a Bachelor's degree in Commerce, complementing his professional certification as a Company Secretary. His appointment is expected to strengthen Akar Auto Industries' compliance and governance framework.

Management's Statement

Sunil Todi, the Managing Director of Akar Auto Industries Limited, announced the appointment, expressing confidence in Kala's abilities to enhance the company's secretarial and compliance functions.

Regulatory Compliance

The appointment has been made in accordance with Regulation 30 of SEBI (Listing Obligation and Disclosure Requirements) Regulation, 2015. The company has duly informed the Bombay Stock Exchange Limited about this change in key managerial personnel.

Company Overview

Akar Auto Industries Limited, known for its slogan "The Ultimate Grip," is headquartered in Aurangabad, Maharashtra. The company operates in the auto components sector and is listed on the Bombay Stock Exchange.

This strategic appointment underscores Akar Auto Industries' commitment to maintaining robust corporate governance and ensuring compliance with regulatory requirements in the dynamic automotive industry landscape.