RMC Switchgears Limited Receives Credit Rating Upgrade from Infomerics Ratings
RMC Switchgears Limited received credit rating upgrades from Infomerics Ratings on bank facilities worth Rs.190.00 crore, with long-term facilities upgraded to IVR BBB; Stable and short-term facilities to IVR A3+. The upgrade reflects strong H1FY26 performance with 111% revenue growth to Rs.221.61 crore and a robust order book of Rs.571.63 crore as of December 31, 2025. The company maintains satisfactory financial metrics with tangible net worth of Rs.127.14 crore and improved interest coverage ratio of 5.77x.
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RMC Switchgears Limited has received credit rating upgrades from Infomerics Ratings on its bank facilities, reflecting the company's improved financial performance and business prospects. The rating agency upgraded both long-term and short-term bank facilities totaling Rs.190.00 crore.
Credit Rating Upgrades
Infomerics Ratings upgraded RMC Switchgears' credit ratings across its bank facilities, demonstrating confidence in the company's financial strength and operational capabilities.
| Facilities: | Amount (Rs. Crore) | Current Ratings | Previous Ratings | Rating Action |
|---|---|---|---|---|
| Long Term Bank Facilities: | 85.00 (Enhanced from Rs.50.00 Crore) | IVR BBB; Stable | IVR BBB-; Stable | Rating Upgraded |
| Short Term Bank Facilities: | 105.00 (Enhanced from Rs.90.75 Crore) | IVR A3+ | IVR A3 | Rating Upgraded |
| Total: | 190.00 |
The upgrade in long-term facilities from IVR BBB-; Stable to IVR BBB; Stable and short-term facilities from IVR A3 to IVR A3+ reflects the rating agency's positive assessment of the company's business performance and financial risk profile.
Strong Business Performance in H1FY26
The rating upgrade is underpinned by RMC Switchgears' strong business performance during the first half of FY26. The company demonstrated significant growth driven by enhanced product offerings in smart metering solutions and higher execution of Solar EPC contracts.
| Performance Metric: | H1FY26 | H1FY25 | Growth |
|---|---|---|---|
| Total Operating Income: | Rs.221.61 crore | Rs.104.78 crore | ~111% |
| Operating Margin: | 15.34% | 18.92% | Marginal moderation |
| PAT Margin: | 9.02% | 9.62% | Slight moderation |
| Net Cash Accruals: | Rs.21.86 crore | - | Satisfactory |
The company's revenue growth of approximately 111% year-on-year was primarily driven by the execution of Solar EPC contracts and strengthened market presence in smart metering solutions.
Robust Order Book and Business Prospects
RMC Switchgears maintains a strong order book position that provides near to medium-term revenue visibility. As of December 31, 2025, the company held an unexecuted order book of Rs.571.63 crore.
| Order Book Details: | Amount (Rs. Crore) |
|---|---|
| Solar EPC Contracts: | ~270.92 |
| Electrical EPC Contracts: | ~415.25 |
| Electrical Products: | 85.46 |
| Total Unexecuted Orders: | 571.63 |
| Additional LOI (February 2026): | 200.86 |
Approximately Rs.220-230 crore from the total unexecuted order book is expected to be executed by March 31, 2026. The company also secured a Letter of Intent worth Rs.200.86 crore for an additional Electrical EPC contract on February 3, 2026.
Financial Risk Profile and Capital Structure
The rating agency noted RMC Switchgears' satisfactory financial risk profile, supported by comfortable capital structure metrics. As of September 30, 2025, the company maintained a tangible net worth of Rs.127.14 crore with total debt of Rs.74.79 crore.
| Financial Metrics: | September 30, 2025 |
|---|---|
| Tangible Net Worth: | Rs.127.14 crore |
| Total Debt: | Rs.74.79 crore |
| Long-term Debt to Equity: | 0.13x |
| Overall Gearing: | 0.59x |
| Total Debt/EBITDA: | 2.20x |
| Interest Coverage Ratio: | 5.77x |
The company's debt coverage metrics showed improvement, with the Interest Service Coverage Ratio increasing to 5.77x in H1FY26 from 5.07x in H1FY25.
Rating Outlook and Key Factors
Infomerics Ratings assigned a stable outlook, reflecting expected stable business performance supported by timely order execution and experienced management. The ratings continue to derive strength from the company's long operational track record of nearly three decades and diversified clientele base including reputed government entities and DISCOMs.
However, the ratings remain constrained by the working capital intensive nature of operations, tender-driven business model, and exposure to raw material price volatility. The company's top five customers contribute approximately 83% of total sales, indicating high client concentration risk.
Historical Stock Returns for RMC Switchgears
| 1 Day | 5 Days | 1 Month | 6 Months | 1 Year | 5 Years |
|---|---|---|---|---|---|
| -2.24% | -2.24% | +5.57% | -50.11% | -41.00% | +3,047.41% |
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