Kross is a well-known manufacturer and supplier of trailer axles and suspension assemblies. Kross shares rallied 10% on 5 March 2025 after its credit rating was upgraded by India Ratings & Research. The company’s bank facilities rating was upgraded to ‘IND A’ from ‘IND A-’ with a stable outlook and positive implications. This upgrade will help the company to strengthen its finances and operational efficiency.
Kross Credit Rating Upgrade
India Ratings & Research, in a statement on 3 March 2025, announced the following rating upgrades for Kross:
| Instrument Type | Size of Issue (INR Crore) | Rating Assigned |
|---|---|---|
| Fund-based working capital limit | 88.5 | IND A/Stable/IND A1 |
| Non-fund-based working capital limit | 10.0 | IND A1 |
| Term loan | 13.0 (Reduced from 15.2) | IND A/Stable |
This upgrade means the company is more financially stable, operationally efficient and better at managing credit risks. The upgraded rating will increase Kross’s borrowing capacity and reduce financing costs, enabling further expansion and strategic investments.
Business Expansion and Capacity Growth
- Axle Beam Extrusion Plant Expansion – Kross is in the final stages of increasing its axle beam extrusion capacity. A new extrusion machine will be operational by March 2025, increasing production capacity from 5,000 to 7,500 units per month. This will enable the company to enter the tag and dead axle segment and add more products to its portfolio.
- Seamless Tube Manufacturing Facility – The company is investing INR 167 crores to set up a seamless tube plant in the Adityapur Industrial Area, Jharkhand. This will achieve backward integration, reduce dependence on external vendors and cater to growing demand in oil and gas, automotive and industrial sectors.
Kross Q3 FY25 Financials
Despite the industry challenges, Kross has reported stable numbers for Q3 and 9M FY25:
- Revenue: INR 150.1 crores in Q3 FY25 (vs. INR 148.6 crores in Q3 FY24)
- EBITDA: INR 19.7 crores in Q3 FY25 (vs. INR 20.8 crores in Q3 FY24)
- PAT: INR13.6 crores in Q3 FY25, up 16.8% YoY
- 9M FY25 Revenue: INR 435.4 crores, trailer axles and suspension 42.5%, components 57.5%
- Exports: 3.4% in 9M FY25 (up from 1% in FY24), target for the year 5%
These numbers show Kross’s ability to hold steady in a turbulent market with the help of strategic investments and export growth.
Business Model
Kross is a high-growth commercial vehicle components company with a presence in trailer axles, suspensions and forged automotive parts. The company’s business model is built around:
- Product Diversification: Trailer axles, suspension systems, and high-precision forged components
- Backward Integration: Upcoming seamless tube facility to reduce costs and improve margins
- Export Market Expansion: Leveraging the global ‘China Plus One’ strategy to increase exports to Sweden and Japan
- Technology Driven Efficiency: Adoption of advanced extrusion and seamless tube manufacturing to improve product quality
- Strong Financials: Recent credit rating upgrade reflects the company’s financial strength and debt management capabilities
Looking Forward
Kross is on a growth path and management is targeting 15-20% revenue growth in FY26. The company’s focus on technology, market and financial discipline will continue to drive growth.
The surge in Kross’s stock price is a testament to investors’ confidence in the company’s strategy. With a credit rating upgrade, capacity expansion and a growing export presence, Kross is set to do well in the coming quarters.
Kross launched its IPO on 9 September 2024; the issue got a heartwarming response from the investors and subscribed 16.5X. However, the IPO listed with a lukewarm return of 8.25%. Currently, the issue is trading 24.19% below its allotment price of INR 240 per share.