GG Automotive Gears Gets Credit Rating Upgrade from CRISIL
CRISIL Ratings Limited has upgraded GG Automotive Gears Limited's long-term rating to BBB/Stable from BBB-/Stable and short-term rating to A3+ from A3 for total bank loan facilities of ₹25.00 crores. The upgrade is based on improved operating performance, consistent revenue growth, and enhanced profitability. The company's operating income grew by 19.94% to ₹114.48 cr in fiscal 2025, with PAT margin improving to 6.77%. GG Automotive Gears maintains a strong market position in the locomotives gear business, with a diversified product portfolio and strategic partnership with Indian Railways. The company's financial risk profile has strengthened, with improved debt management and liquidity position. CRISIL expects minimum revenue growth of 10.00% over the medium term.
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GG Automotive Gears Limited has received a significant credit rating upgrade from CRISIL Ratings Limited. CRISIL has upgraded GG Automotive Gears' long-term rating to BBB/Stable from BBB-/Stable and short-term rating to A3+ from A3, citing improved operating performance, consistent revenue growth, and enhanced profitability.
Rating Upgrade Details
The comprehensive upgrade covers total bank loan facilities worth ₹25.00 crores.
| Rating Type | Previous Rating | Upgraded Rating |
|---|---|---|
| Long Term | CRISIL BBB-/Stable | CRISIL BBB/Stable |
| Short Term | CRISIL A3 | CRISIL A3+ |
Financial Performance Highlights
The rating upgrade is supported by strong financial performance improvements over recent periods. The company has demonstrated consistent revenue growth and enhanced profitability metrics.
| Performance Metric | Fiscal 2025 | Fiscal 2024 | Growth |
|---|---|---|---|
| Operating Income | ₹114.48 cr | ₹95.44 cr | 19.94% |
| Profit After Tax | ₹7.75 cr | ₹4.43 cr | 74.94% |
| PAT Margin | 6.77% | 4.64% | 213 bps |
The company's profitability has shown remarkable improvement, reaching 19.00% in the first half of fiscal 2026 compared to 12.80% in fiscal 2024. For the first half of fiscal 2026, the company reported revenue of ₹61.26 crores against ₹51.35 crores in the same period of the previous fiscal.
Business Strengths and Market Position
CRISIL highlighted several key strengths supporting the rating upgrade:
- Established market position in the locomotives gear business, backed by 45 years of experience
- Long-standing strategic partnership with Indian Railways
- Leading supplier of traction gears and shafts
- Successful diversification of product portfolio beyond railways, including gears and pinions for metro, oil and gas, wind energy, and earthmoving equipment industries
Financial Risk Profile and Liquidity
The company's financial risk profile has strengthened significantly with improved capital structure metrics. Key financial indicators demonstrate healthy debt management and liquidity position.
| Financial Metric | March 2025 | March 2024 |
|---|---|---|
| Adjusted Debt/Adjusted Networth | 0.52 times | 0.83 times |
| Interest Coverage | 6.80 times | 5.70 times |
Promoters have demonstrated commitment by infusing ₹12.50 crores as capital over the past two fiscals, strengthening the company's net worth. The company maintains a robust order book of ₹105.00 crores scheduled for delivery over the next 12-18 months across various segments beyond railways.
Future Outlook
CRISIL expects the company to maintain minimum revenue growth of 10.00% over the medium term, supported by operational efficiency investments made over the past 1-2 years. The stable outlook reflects confidence in the company's ability to benefit from extensive promoter experience and established client relationships. Bank limit utilization remained moderate at around 45.00% for the 10 months through September 2025, indicating adequate liquidity management.
Historical Stock Returns for GG Automotive Gears
| 1 Day | 5 Days | 1 Month | 6 Months | 1 Year | 5 Years |
|---|---|---|---|---|---|
| +1.97% | -3.00% | -11.24% | +43.01% | +51.49% | +2,543.34% |
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