Crisil Ratings stated that the ratings upgrade reflects the continuing improvement in the credit risk profile of the Belrise group.

The business risk profile has been improving backed by continuous addition as well as premiumisation of products, and addition of new customers, thus diversifying the client base.

This, along with longstanding relationships with customers, has led to growth in revenues to Rs 8,312 crore in fiscal 2025 from Rs 6,578 crore in fiscal 2023. Operating margins also remained healthy at 12.5-13.5% over the three fiscals through 2025.

With continued product as well as customer diversification and healthy repeat orders, supported by longstanding relationships with customers, the business risk profile will likely remain strong over the medium term.

The rating action also incorporates the significant improvement in financial risk profile, driven by strong networth of above Rs 4500 crores as on 30 June 2025.

Proceeds from the IPO have been used towards debt reduction in first quarter of fiscal 2026 leading to significant improvement in the capital structure.

Given reduction of debt, the group will likely save significant interest cost, which will lead to improvement in the debt protection metrics. Further, liquidity is superior supported by strong cash accruals expected against minimal repayment obligations, cash and bank balance of more than Rs 500 crore as on June 2025, unutilized bank limits of around Rs 100-120 crore and strong current ratio of more than 2.3 times as on June 2025.

The ratings reflect the group's market leadership in the two and three-wheeler automotive (auto) component business, longstanding relationships with large OEMs, increasing product and geographic diversity, efficient working capital management and strong financial risk profile.

These strengths are partially offset by moderate customer concentration in revenue and exposure to cyclicality in the domestic auto industry.

Belrise Industries, part of the Belrise group, is engaged in manufacturing auto components for Bajaj Auto, Honda Motorcycle and Scooter India and Hero Motocorp, among others. The Belrise group manufactures chassis and frame assemblies, sheet metal, exhaust systems (silencers), plastic moulded and painted parts and assemblies for auto and consumer durables segments. The group has 17 manufacturing units across 10 cities in India.

The company's consolidated net profit jumped 56.06% to Rs 111.68 crore on a 27.02% increase in revenue to Rs 2,262.21 crore in Q1 FY26 over Q1 FY25.