Rating Rationale
June 26, 2025 | Mumbai
Krishna Defence and Allied Industries Limited
Ratings upgraded to 'Crisil BBB/Stable/Crisil A3+'; Rated amount enhanced f
Rating Action
Total Bank Loan Facilities Rated Rs.69 Crore (Enhanced from Rs.52
Long Term Rating Crisil BBB/Stable (Upgraded from
Short Term Rating Crisil A3+ (Upgraded from 'Crisil A
Note: None of the Directors on Crisil Ratings Limited’s Board are members of rating committee and thus do not participate in discussio
The Board of Directors also does not discuss any ratings at its meetings.
1 crore = 10 million
Refer to Annexure for Details of Instruments & Bank Facilities
Detailed Rationale
Crisil Ratings has upgraded its ratings on the bank facilities of Krishna Defence and Allied Industrie
BBB/Stable/Crisil A3+’ from 'Crisil BBB-/Stable/Crisil A3'.
The rating upgrade factors in the improvement in the business risk profile of the company, suppo
and sustenance of operating margins, resulting in better-than-expected net cash accruals. Revenue
fiscal 2025 from Rs 106 crore in fiscal 2024, supported by continued product additions and timely
healthy order book of Rs 250 crore as of May 2025 to be executed over the next 12-18 months fur
revenue visibility. Operating margins were healthy at 15.9% in fiscal 2025, owing to stable profit
bidding for contracts as well as benefits of economies of scale amid increasing scale of operatio
similar range over the medium term. Consequently, net cash accruals increased to Rs 24 crores in
crores in fiscal 2024 and will likely continue to grow on a sustained basis over the medium term.
and liquidity remain adequate with controlled debt levels and no debt repayment obligation.
The ratings reflect the established presence in the defence segment, the healthy order book of
revenue visibility, its niche and diversified product basket, and a healthy financial risk profile. Thes
offset by moderate scale of operations and working capital-intensive operations.
Analytical Approach
Crisil Ratings has evaluated the standalone business and financial risk profiles of KDAIL.
Corporate guarantee of Rs 9 crores given to the associate company, Waveoptix Defence Solution P
as debt.
Key Rating Drivers & Detailed Description
Strengths:
Established presence in the defence segment and healthy orderbook: The promoters h
three decades in the defence and dairy industries. This has given them an understanding of th
enabled them to establish relationships with suppliers and key customers. Customers include
defence industry, including Hindustan Shipyard Ltd, Mazagaon Dock Shipbuilders Ltd, Minis
Shipyard Ltd and Armoured Vehicles Nigam Ltd. Backed by new product launches and trac
efficient execution of orders, revenues increased to Rs 195 crores in fiscal 2025 from Rs 6
Furthermore, the company has orders worth Rs 250 crores as on May 2025, to be executed ove
period, across varied products and counterparties. This provides near-term revenue visibi
continued flow of incremental orders should enable the company to further scale up its op
believes that the extensive experience of the promoters and their established relationships with
to support the business risk profile over the medium term.
Diversified and niche product basket: Armed with the technical expertise of the promoters,
able to diversify its product offerings from dairy equipment to defence equipment, which have c
defence industry. The company has its own product development team, which is focused on
product development efforts for indigenously developed products, primarily in the defenc
specialised product basket, with more than 90% of revenue coming from the defence segmen
players offering similar products, supports the business risk profile and has resulted in steady re
Healthy financial risk profile: Networth is healthy estimated at Rs 131 crore as on March 31, 2
106 crore a year earlier), due to steady accretion to reserves and equity infusions. Capital stru
reflected in total outside liabilities to adjusted networth ratio and gearing of 0.24 time and 0.0
2025 (0.25 time and 0.09 time, respectively, as on March 31, 2024), owing to controlled reliance
protection metrics are robust as indicated by interest coverage and net cash accrual to adju
times and 2.5 times, respectively, in fiscal 2025 (9.92 times and 1.27 times, respectively, in fis
risk profile will remain healthy over the medium term backed by stable profitability and abse
funded capital expenditure (capex).
Weaknesses:
Moderate scale of operations: Though the company’s revenues significantly increased to Rs
compared with Rs 64 crores in fiscal 2023, the scale of operations continues to remain mode
operations limits the company’s operating efficiencies and benefits from economies of scale. S
operations through healthy order execution of orders along with ramp up of new capacities w
over the medium term.
Working capital-intensive operations: Gross current assets (net of cash) were at 183 days
compared with 207 days as on March 31, 2024, due to large receivables and inventory. The
credit of around 30 days to defense customers and 90-120 days to dairy customers. Though re
to uniformity in sales in fiscal 2025, compared to concentrated revenues in the fourth quarter du
they continue to be sizeable. Furthermore, inventory remains large due to higher process
processes of inventory. Management of the working capital cycle amid increasing scale
monitorable.
Liquidity: Adequate
Bank limit utilisation was moderate at 36% on average for the 12 months through May 2025. Cas
Rs 26-28 crore per fiscal, will be sufficient against no term debt obligation over the medium term. U
bank balance of around Rs 12 crore as on March 31, 2025, further supports liquidity. Current ratio w
as on March 31, 2025. Low gearing and moderate networth support financial flexibility and w
conditions or downturns in the business.
Outlook: Stable
Crisil Ratings believes KDAIL will continue to benefit from the extensive experience of the pro
relationships with clients, along with a strong financial risk profile.
Rating sensitivity factors
Upward factors:
Increase in revenues or operating margins leading to net cash accrual above Rs 30 crores
Improvement in the working capital cycle and sustenance of financial risk profile aiding the liquid
Downward factors
Significant decline in revenue or operating margins leading to cash accruals below Rs 8 crores
Any large debt-funded capex or further stretch in the working capital cycle weakening the liquidit
About the Company
KDAIL, formerly known as Krishna Allied Industries Ltd, was incorporated in 1997 as a partnership
public limited company in 2013. The company undertakes design, development and manufactu
equipment for defence, security and diary industries. Its manufacturing facilities are at Kalol and Ha
on the SME platform of the National Stock Exchange, NSE Emerge. The operations of the com
promoter Mr. Ankur Shah and is well supported by an established line of professional management.
Key Financial Indicators
As on / for the period ended March 31 Unit 20
Operating income Rs crore 194
Reported profit after tax (PAT) Rs crore 21
PAT margins % 11
Adjusted Debt/Adjusted Net worth Times 0.
Interest coverage Times 21
Any other information: Not Applicable
Note on complexity levels of the rated instrument:
Crisil Ratings` complexity levels are assigned to various types of financial instruments and are includ
in the 'Annexure - Details of Instrument' in this Rating Rationale.
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information. The complexity level for instruments may be updated, where required, in the rating ratio
subsequent to the issuance of the instrument when details on such features are available.
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Customer Service Helpdesk with queries on specific instruments.
Annexure - Details of Instrument(s)
Name Of Date Of Coupon Maturity Issue Size Complexity
ISIN
Instrument Allotment Rate (%) Date (Rs. Crore) Levels
Bank
NA NA NA NA 39.00 NA
Guarantee
NA Cash Credit NA NA NA 12.00 NA
Letter Of
NA NA NA NA 15.00 NA
Guarantee
Letter of
NA NA NA NA 3.00 NA
Credit
Annexure - Rating History for last 3 Years
Current 2025 (History) 2024 2023
Outstanding
Instrument Type Rating Date Rating Date Rating Date Rating
Amount
Fund Based Crisil Crisil
LT 12.0 -- 16-04-24 --
Facilities BBB/Stable BBB-/Stable
Crisil
-- -- 28-03-24 --
BBB-/Stable
Non-Fund Based
Facilities ST 57.0 Crisil A3+ -- 16-04-24 Crisil A3 --
-- -- 28-03-24 Crisil A3 --
All amounts are in [Link].
Annexure - Details of Bank Lenders & Facilities
Facility Amount ([Link]) Name of Lender
Bank Guarantee 22 Axis Bank Limited
Bank Guarantee 17 Axis Bank Limited
Cash Credit 8 Axis Bank Limited C
Cash Credit 4 Punjab National Bank C
Letter Of Guarantee 15 Punjab National Bank
Letter of Credit 3 Axis Bank Limited
Criteria Details
Links to related criteria
Basics of Ratings (including default recognition, assessing information adequacy)
Criteria for manufacturing, trading and corporate services sector (including approach for fin
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