India Ratings & Research (Ind-Ra) has affirmed Omax Autos long term issuer rating at 'BBB+'. The outlook is stable.

Omax is an established player in the auto ancillary industry with a track record of over three decades. It enjoys a strong market position in its key products segments such as two-wheeler frame and piston rods of shock absorbers in passenger cars and medium & heavy commercial vehicle (M&HCV) frame assembly. Omax has strong relationships with original equipment manufacturers (OEMs). The company is a long-term supplier to Hero MotoCorp (HMC), Tata Motors, Bajaj Auto, TVS Motor Company, and other Tier 1 OEMs.  

Omax has a well-established relationship with HMC which directly accounted for around 55% of Omax's sales in FY14 and remains its top customer. However, this high dependence exposes Omax to HMC's weaker performance in relation to that of the overall two-wheeler industry. In FY14, Omax's revenue fell 11.2% yoy to Rs 9.8 billion with net income of negative Rs 63 million, due to HMC's weak performance as well as a decline in the overall commercial vehicle (CV) sales. In 9MFY15, Omax reported revenue of Rs 7.6 billion and net income of Rs 16 million.

Cash flow from operations (CFO) remained positive over FY11-14. However, lower profitability has resulted in a decline in CFO over FY12-14. Working capital cycle requirement has been low with negative net cash cycle. Average fund-based working capital utilisation was around 50% over February 2014-January 2015.

Shares of the company gained Rs 0.4, or 0.92%, to trade at Rs 44. The total volume of shares traded was 1,001 at the BSE (12.03 p.m., Wednesday).