Uniparts India credit ratings affirmed despite trade turbulence

Uniparts India Limited (UIL) announced on September 16, 2025, that ICRA Limited has reaffirmed its long-term credit rating at [ICRA] AA- (Stable) and its short-term rating at [ICRA]A1+. This reaffirmation follows a turbulent trade environment, particularly with new US tariffs, including a punitive 25% duty on select Indian goods effective August 27, 2025, significantly impacting UIL, which generates approximately 50% of its revenues from the US.

The company's Q1 FY2026 performance remained stable despite the application of initial 25% derivative tariffs from March 2025, which further increased to 50% from June 3, 2025. UIL has been actively negotiating with customers to pass on increased tariff costs, limiting the impact on earnings. As of July 31, 2025, Uniparts India reported strong cash and liquid investments of about Rs. 285 crore, resulting in a negative net debt position that continues to support its credit profile.

ICRA noted that UIL's global service delivery model, strong engineering capabilities, and established OEM relationships are expected to cushion near-term operational and profitability impacts. Discussions are underway to ramp up production at the US plant, currently operating below 50% capacity, and the company is exploring establishing a manufacturing plant in Mexico to mitigate US tariff impacts.