GNA Gears - R-19122016

GNA Gears Limited
Instrument Amount Rating Action

Rs. Crore December 2016
Term Loans 45.24 [ICRA]BBB- (stable) assigned

Cash Credit Facilities 70.00 [ICRA]BBB- (stable) assigned
Unallocated Limits 4.76 [ICRA]BBB- (stable) assigned
Total 120.00
ICRA has assigned a long term rating of [ICRA]BBB- (pronounced ICRA triple B minus) for the Rs. 120.0
Crore bank facilities of GNA Gears Limited. The outlook on the long-term rating is “stable” †.
The rating assigned takes into consideration the company’s established relationships and healthy share of
business for supplies to various Original Equipment manufacturers in the tractor and commercial vehicle
industry. The company is a leading supplier of gears to the domestic tractor industry, with supplies to a majority
of the leading tractor OEMs; a revival in demand in the tractor industry would aid moderate growth in revenues
of GNAGL going forward. The rating assigned also factors in favourably the long experience of the promoters in
auto ancillary business; the company is a part of GNA group, which has multiple companies operating in the
auto ancillary business.
The rating of company, however, remains constrained by its weak financial risk profile, characterized by high
gearing and moderate debt coverage indicators. Its liquidity profile remains stretched, with high inventory
stocking on account of integrated operation of company translating in high working capital requirements. Even
as the company’s healthy share of business with various OEMs mitigates segment concentration to an extent, it
remains exposed to downturn in demand in the tractor and commercial vehicle segments, which remain
inherently cyclical in nature.
Going forward, the company’s ability to maintain its healthy share of business with various OEMs, coupled with
its ability to manage and reduce it working capital intensity would remain key rating sensitivities.
Company Profile
GNA Gears Limited (GNAGL) is a part of GNA Group, which has various companies operating in the auto
ancillary business. The company is owned by Mr. Gursaran Singh and family who also hold a 35% stake in
GNA Axles limited (Flagship Company of GNA Group). GNAGL primarily manufactures automotive gears,
which have application in diversified segments like Tractors, Commercial Vehicles, Construction equipment and
Farm Implements. Apart from gears, the company also manufactures axles and shafts for the domestic
commercial vehicle replacement market.
The company’s manufacturing facility is located in Mehtiana, Punjab and it is equipped with infrastructure
capable of undertaking dry cutting, forging, heat treatment and machining operations.
Recent Results
In H1 FY2017 (provisional financials), GNAGL reported operating revenues of Rs. 114.8 Crore and Operating
Profit before Depreciation, Interest and Tax (OPBDIT) of Rs. 16.9 Crore.
December 2016
†
For detailed rating scales and definitions refer the ICRA website www.icra.in or other ICRA publications
For further details, please contact:
Analyst Contacts:
Mr. Subrata Ray (Tel. No. +91 22 6114 3408)
subrata@icraindia.Com
Ms. Anupama Arora (Tel. No. +91 124 4545 303)

anupama@icraindia.com
Mr. Rohan Kanwar Gupta (Tel. No. +91 124 4545 808)
rohan.kanwar@icraindia.com
Relationship Contacts:
Mr. Jayanta Chatterjee (Tel. No. +91-80-43326401)
jayantac@icraindia.com
© Copyright, 2016, ICRA Limited. All Rights Reserved

Contents may be used freely with due acknowledgement to ICRA
ICRA ratings should not be treated as recommendation to buy, sell or hold the rated debt instruments. ICRA ratings are subject to a process of
surveillance, which may lead to revision in ratings. An ICRA rating is a symbolic indicator of ICRA’s current opinion on the relative capability
of the issuer concerned to timely service debts and obligations, with reference to the instrument rated. Please visit our website www.icra.in or
contact any ICRA office for the latest information on ICRA ratings outstanding. All information contained herein has been obtained by ICRA
from sources believed by it to be accurate and reliable, including the rated issuer. ICRA however has not conducted any audit of the rated issuer
or of the information provided by it. While reasonable care has been taken to ensure that the information herein is true, such information is
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ICRA Limited
1105, Kailash Building, 11th Floor, 26, Kasturba Gandhi Marg, New Delhi 110001
Tel: +91-11-23357940-50, Fax: +91-11-23357014
Corporate Office
Mr. Vivek Mathur
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Email: vivek@icraindia.com
Building No. 8, 2nd Floor, Tower A, DLF Cyber City, Phase II, Gurgaon 122002
Ph: +91-124-4545310 (D), 4545300 / 4545800 (B) Fax; +91- 124-4050424
Mumbai Kolkata
Mr. L. Shivakumar Mr. Jayanta Roy
Mobile: +91 9821086490 Mobile: +91 9903394664
Email: shivakumar@icraindia.com Email: jayanta@icraindia.com
3rd Floor, Electric Mansion A-10 & 11, 3rd Floor, FMC Fortuna
Appasaheb Marathe Marg, Prabhadevi 234/3A, A.J.C. Bose Road
Mumbai—400025, Kolkata—700020
Board : +91-22-61796300; Fax: +91-22-24331390 Tel +91-33-22876617/8839 22800008/22831411,
Fax +91-33-22870728
Chennai Bangalore
Mr. Jayanta Chatterjee Mr. Jayanta Chatterjee
Mobile: +91 9845022459 Mobile: +91 9845022459
Email: jayantac@icraindia.com Email: jayantac@icraindia.com
5th Floor, Karumuttu Centre 'The Millenia'

634 Anna Salai, Nandanam Tower B, Unit No. 1004,10th Floor, Level 2 12-14, 1 & 2,
Chennai—600035 Murphy Road, Bangalore 560 008
Tel: +91-44-45964300; Fax: +91-44 24343663 Tel: +91-80-43326400; Fax: +91-80-43326409
Ahmedabad Pune
Mr. L. Shivakumar Mr. L. Shivakumar
Mobile: +91 9821086490 Mobile: +91 9821086490
Email: shivakumar@icraindia.com Email: shivakumar@icraindia.com
907 & 908 Sakar -II, Ellisbridge, 5A, 5th Floor, Symphony, S.No. 210, CTS 3202, Range
Ahmedabad- 380006 Hills Road, Shivajinagar,Pune-411 020
Tel: +91-79-26585049, 26585494, 26584924; Fax: Tel: + 91-20-25561194-25560196; Fax: +91-20-
+91-79-25569231 25561231
Hyderabad
Mr. Jayanta Chatterjee
Mobile: +91 9845022459
Email: jayantac@icraindia.com
4th Floor, Shobhan, 6-3-927/A&B. Somajiguda, Raj

Bhavan Road, Hyderabad—500083
Tel:- +91-40-40676500

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GNA Gears Limited

Instrument Amount Rating Action

Term Loans 45.24 [ICRA]BBB- (stable) assigned

Ms. Anupama Arora (Tel. No. +91 124 4545 303)

© Copyright, 2016, ICRA Limited. All Rights Reserved

5th Floor, Karumuttu Centre 'The Millenia'

4th Floor, Shobhan, 6-3-927/A&B. Somajiguda, Raj

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