Credit Rating

Ref: CE/NSEBSE/CR/17092026 September 17, 2026 Listing Department, Department of Corporate Services – Listing, National Stock Exchange of India Limited, BSE Limited, Exchange Plaza, P. J. Towers, Bandra Kurla Complex, Dalal Street, Bandra (East), Mumbai – 400 051 Mumbai – 400 001 Re: Scrip Symbol: CENTUM/ Scrip Code: 517544 Dear Sir/ Madam, Sub: Intimation of Credit Rating under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“SEBI Listing Regulations”) Pursuant to Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, we wish to inform you that CARE Ratings Limited has upgraded the credit ratings assigned to the Company's bank facilities. The details of the ratings are set out below: Facilities/Instruments Amount (₹ crore) Previous Rating Upgraded Rating Long-term / Short- 184.00 (Enhanced CARE BBB; Positive / CARE BBB+; Stable / term bank facilities from 173.52) CARE A3+ CARE A2 Long-term bank 249.13 (Reduced from CARE BBB; Positive CARE BBB+; Stable facilities 259.61) Please refer to the enclosed letter received from CARE Ratings Limited for details. You are requested to take the above information on your record Yours faithfully, For Centum Electronics Limited Indu H S Company Secretary & Compliance Officer Encl: as above Centum Electronics Limited # 44, KHB Industrial Area, Yelahanka New Town, Bangalore - 560 064, Karnataka, India Tel +91-(0)80-4143-6000 Fax +91-(0)80-4143-6005 Website www.centumelectronics.com E-mail info@centumelectronics.com CIN - L85110KA1993PLC013869 Press Release Centum Electronics Limited September 17, 2026 Name of the Facilities/Instruments Amount (₹ crore) Rating2 Rating Action Regulator1 Long-term / Short-term 184.00 CARE BBB+; Upgraded from CARE BBB; bank facilities (Enhanced from 173.52) Stable / CARE A2 Positive / CARE A3+ 249.13 CARE BBB+; Upgraded from CARE BBB; Long-term bank facilities RBI (Reduced from 259.61) Stable Positive Details of instruments/facilities in Annexure-1. Rationale and key rating drivers Revision in ratings assigned to bank facilities of Centum Electronics Limited (CEL) factors in the divestment of its overseas businesses held under Centum Electronics UK Limited (Centum UK; a wholly owned subsidiary of CEL), which had been consistently incurring losses. These overseas entities are currently under liquidation and are being exited from the group structure. From CEL's perspective, the entities are effectively discontinued, with no control being exercised by the parent company, and accordingly have not been consolidated from Q1FY27 onwards. The management does not envisage further losses, funding support requirements, contingent liabilities, or other financial obligations arising from these entities, alleviating the drag on the group's consolidated financial profile. Accordingly, CARE Ratings Limited (CareEdge Ratings) changed the analytical approach from consolidated to standalone. The rating revision also factors in CEL’s growing order book, particularly in its Build to Specification (BTS), which primarily caters to the Indian defence and space sectors and constitutes a relatively higher-margin business segment. CareEdge Ratings expects these developments, and a sharper management focus following exit from overseas operations, to support a meaningful scale-up in the company's standalone business in the medium term. Ratings continue to derive strength from the promoters' over three decades of industry experience and CEL's established relationships with a reputed and diversified customer base, resulting in a healthy proportion of repeat business. Ratings are further supported by the company's above-average financial risk profile, characterised by a sustained increase in operating income and satisfactory debt protection metrics. However, these strengths are partially offset by the working capital intensive operations, with working capital requirements expected to remain elevated, and potentially increase further, to support the growing order book and future execution needs. Ratings also remain constrained by the profitability susceptible to foreign exchange fluctuations and intense competition, particularly in the electronic manufacturing services (EMS) segment, which contributes a significant share of the company's revenue and is characterised by relatively low entry barriers. Rating sensitivities: Factors likely to lead to rating actions Positive factors • Increase in revenue to beyond ₹1,500 crore while maintaining profit before depreciation, interest, and taxes (PBDIT) margin in excess of 12.5% and reducing working capital intensity. Negative factors • Increase in total debt to gross cash accruals (TD/GCA; including customer advances as debt) to above 4.25x or total outside liabilities to tangible net worth (TOL/TNW) of over 2x. • Deterioration in liquidity profile of the company. Analytical approach: Analytical approach has been revised from consolidated to standalone as all operating subsidiaries are in process of liquidation and hence, standalone financials of CEL will remain relevant. 1SEBI: Securities and Exchange Board of India; RBI: Reserve Bank of India; MCA: Ministry of Corporate Affairs; IRDAI: Insurance Regulatory and Development Authority of India; PFRDA: Pension Fund Regulatory and Development Authority. 2Complete definitions of ratings assigned are available at www.careratings.com and in other CARE Ratings Limited’s publications. 1 CARE Ratings Ltd. Press Release Outlook: Stable Stable outlook reflects CareEdge Ratings’ expectation that the company will continue to grow its scale while also improving operating profitability following the exit of loss-making subsidiaries. Detailed description of key rating drivers Key strengths Discontinuation of operations of loss-making subsidiaries CEL took over Adetel in 2016 through Centum UK, which was a stressed asset, and was re-named as Centum T&S Group (CTS). At the time of acquisition, Adetel had two divisions – energy division and engineering division. The energy division was incurring losses, as finding a market was challenging, and it was sold off in FY20. CTS’s had operations in Canada and France under different subsidiaries. Although CTS’s operations were envisaged to be profitable, fixed price contract margins and high employee costs among others impacted the turnaround. Therefore, in Q3FY26, CEL decided to discontinue operations for its subsidiaries. As of June 30, 2026, liquidation process for both companies has been initiated. Following the exit from its subsidiaries, CareEdge Ratings expects CEL to benefit from enhanced management focus on its core operations. The absence of support requirements towards loss-incurring subsidiaries is expected to improve the company’s overall operational and financial profile going forward. Steady growth in scale of operations and satisfactory financial metrics Scale of operations has exhibited steady growth in the last few years, supported by a healthy increase in the order book. The order book expanded from ₹1,341 crore as on March 31, 2025, to ₹1,645 crore as on March 31, 2026, and further to ₹1,797 crore as on June 30, 2026, providing strong revenue visibility. In CareEdge Ratings' view, the growing order book is expected to drive a revenue compounded annual growth rate (CAGR) of ~20%-25% in the medium term. Increasing contribution from the relatively higher-margin BTS is likely to support improvement in operating margins by 50-100 basis points in the same period. Overall gearing deteriorated to 0.80x as on March 31, 2026, from 0.55x as on March 31, 2025 (including customer advances treated as debt), primarily due to the significant erosion of net worth following a net loss in FY26. The loss was largely attributable to one-time exceptional charges aggregating ₹203.4 crore, comprising provision for diminution in the value of subsidiaries, write-off of receivables from subsidiaries, and provision for inventory obsolescence. H [Showing first 8,000 characters — download PDF for full document]