Rossell Techsys Limited , a player in the defense sector, has received a credit rating of IND BBB/Positive/IND A2 from India Ratings for its INR 3,200 million bank loan facilities. This rating reflects the company's strong position in the market and its potential for growth.

Key Rating Factors

India Ratings highlighted several factors contributing to Rossell Techsys's credit rating:

1. Strong Order Book: The company has a robust order book, ensuring healthy revenue visibility for the foreseeable future.
2. Customer Relationships: Rossell Techsys has established sticky customer relationships within the defense sector.
3. Operating Performance: The company has demonstrated healthy operating performance at the consolidated level.
4. Diversification Efforts: Ongoing initiatives to diversify its revenue profile by adding new customers and expanding into other industries.

Rating Constraints

Despite the positive outlook, India Ratings also noted some constraints:

1. Stretched Credit Metrics: The company faces challenges at the consolidated level, primarily due to an elongated working capital cycle.
2. Inventory Management: Significant raw material inventory holdings contribute to the stretched working capital.

Positive Outlook

The 'Positive' outlook assigned by India Ratings reflects expectations of improvement in Rossell Techsys's financial metrics:

• Working Capital Cycle: Anticipated enhancement in the medium term.
• Inventory Management: Expected reduction in the inventory holding period.
• Credit Metrics: Projected improvement in overall credit metrics and liquidity.

Rating Details

This credit rating is a significant development for Rossell Techsys, as it provides an independent assessment of the company's financial strength and creditworthiness. The IND BBB rating suggests moderate safety for timely servicing of debt obligations, while the 'Positive' outlook indicates potential for rating upgrades in the future if the company continues to improve its financial metrics and operational performance.

For investors and stakeholders, this rating offers valuable insights into Rossell Techsys's financial health and its capacity to manage its debt obligations. The company's strong order book and efforts to diversify its revenue streams could potentially lead to improved financial performance in the coming years, subject to effective management of working capital and inventory levels.

Rossell Techsys Limited has reported exceptional growth in its Q2 FY26 performance, marking a significant milestone in the company's history. The aerospace and defense manufacturer has not only doubled its revenue but also secured substantial new orders and received recognition from a major industry player.

Financial Highlights

Rossell Techsys delivered remarkable financial results for the quarter ended September 30, 2025:

The company's performance for the first half of FY26 was equally impressive:

Order Book and Business Expansion

Rossell Techsys has secured firm orders worth INR 932.2 crores during the quarter, strengthening its order book. The company currently has confirmed orders of over INR 720 crores, with strategic agreements totaling INR 2,500 crores. Additionally, Rossell Techsys has submitted bids amounting to INR 920 crores to various companies, with decisions expected throughout the year.

The company is actively diversifying its portfolio, with 20-25% of its revenue for FY26 expected to come from the semiconductor and space sectors. This percentage is projected to increase to around 40% in the following year.

Capacity Expansion and Fundraising

To support its growth trajectory, Rossell Techsys plans a major capacity expansion of 150,000 square feet within its existing premises in Devanahalli, Bangalore. The expansion, estimated to cost INR 70 crores, is scheduled to commence in Q4 FY26 and be operational within 18 months.

To fuel this growth and strengthen its balance sheet, the company is evaluating a fundraise of up to INR 300 crores through a Qualified Institutional Placement (QIP). The funds will be primarily used for capex and working capital requirements, supporting the company's growth plans until FY29.

Industry Recognition

In a significant achievement, Rossell Techsys was honored with the Outstanding Supplier Recognition Certificate at the Lockheed Martin Annual Suppliers Conference 2025 held in Bangalore. The company was commended for its outstanding support, dedication, and commitment to success in manufacturing cable harness assemblies for Lockheed Martin's various programs.

Rishab Gupta, Managing Director of Rossell Techsys, commented on the recognition: "This recognition is a testament to the trust and synergy we have built over the years. It reflects our shared pursuit of quality, reliability, and innovation that power aerospace excellence."

Future Outlook

With a robust order pipeline, strategic diversification into high-growth sectors like semiconductors and space technologies, and strong execution capabilities, Rossell Techsys is poised for continued growth. The company expects to maintain its growth momentum through the next two quarters, driving transformative growth in FY26 and beyond.

As Rossell Techsys continues to expand its capabilities and customer base, it remains committed to maintaining EBITDA margins in the range of 15% to 20% in the medium to long term. The company's focus on operational excellence, technology integration, and process automation positions it well to capitalize on the growing opportunities in the aerospace, defense, semiconductor, and space technology sectors.