| Extensive track record and experienced management
Incorporated in 1968, the company has a long track record of operations in this industry. The company is led by its chairman Mr. Diwakar S. Shetty who has an experience of over four decades of packaging industry along with Mrs. Yashoda D. Shetty, Mr. Daksharaj Shetty, Mr. Mohan Menon, Mr. Harsh Vardhan Jajoo and Mr. Narendra M. who has experience of over two decades in the packaging industry. The long track record of the management has helped the company develop healthy relations with suppliers and reputed customers such as ITC Limited, Hindalco Limited, TATA Steels, J. K. Paper, Glaxo Smithkline Consumer, Diageo India, Allied Blenders and Dist., Wockhart Life Science, Glenmark Pharmaceuticals, Novarties India Limited, Zydus Nycomed, TVS Motor Company Limited, Titan Company Limited, Café Coffee Day Limited, Unibic Foods Limited, etc.
Acuité believes that the experience of the management in the industry and established relationships with customers is likely to favourably impact the business risk profile of the company over the near to medium term.
Diversified product range and diversified industry presence along with reputed clientele
Company has diversified product range under the segment of consumer and industrial packaging products. It finds its usage in various industries like food, pharmaceuticals, chemicals, commodities, liquor, pesticides, agriculture to name a few. It has reputed clientele which includes ITC Limited, Hindalco Limited, TATA Steels, Garware Polyester Limited, J. K. Paper, Glaxo Smithkline Consumer, Naturell India Private Limited, Diageo India, Pernod Ricard India, Allied Blenders and Dist., Agro Tech Foods Limited, USV Limited, Wockhart Life Science, Glenmark Pharmaceuticals, Novarties India Limited, UPL Limited, Gharda Chemicals Limited, Zydus Nycomed, TVS Motor Company Limited, Titan Company Limited, Café Coffee Day Limited, Unibic Foods Limited, etc.
Healthy Financial Risk Profile
The financial risk profile of Fibre Foils Limited stood healthy marked by moderate tangible net worth, low gearing levels and comfortable debt protection metrics.
The capital structure stood comfortable with gearing ratio of 0.21 times as on March 31, 2023 as against 0.40 times on March 31, 2022.
The tangible networth of the company stood moderate at Rs. 48.10 crores on March 31, 2023 as against 33.49 crores on March 31, 2022. Increase in tangible networth is on account of accretion of profit to reserves.
The total debt of the company stood at Rs. 10.26 crores on March 31, 2023 of which Rs. 0.24 crore pertains to long term debt, Rs. 9.90 crores to short term borrowings and Rs. 0.12 crores to CPLTD. TOL/TNW stood at 0.52 times as on March 31, 2023 as against 0.91 times on March 31, 2022. NCA/TD stood at 1.88 times on March 31, 2023 as against 0.65 times as on March 31, 2022.
Given the comfortable capital structure and healthy profitability, the debt coverage indicators also stood comfortable with Interest Coverage Ratio and DSCR of 35.49 times and 27.42 times respectively in FY2023 as against 12.94 times and 4.40 times respectively in FY2022.
Moderate Working Capital Management
The company’s working capital management is moderate marked by gross current asset (GCA) days of 109 days in FY2023 as against 130 days in FY2022. The GCA days are driven by the inventory days and debtor days. The inventory days stood at 70 days in FY2023 as against 52 days in FY2022. The debtor days stood at 40 days in FY2023 as against 58 days in FY2022. The company provides an average period 45 – 90 days to its debtors. On the other hand, creditor days stood at 69 days in FY2023 as against 87 days in FY2022. The company receives a credit period of ~45 days from it’s suppliers. The current ratio stood at 1.98 times on March 31, 2023 as against 1.59 times on March 31, 2022.
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