Press Release September 19, 2025 SHREE RAYON PRIVATE LIMITED Rating Reaffirmed

Product	Quantum (Rs. Cr)	Long Term Rating	Short Term Rating
Bank Loan Ratings	14.29	ACUITE BBB- | Stable | Reaffirmed	-
Bank Loan Ratings	2.57	-	ACUITE A3 | Reaffirmed
Total Outstanding	16.86	-	-
Total Withdrawn	0.00	-	-

Rating Rationale

­Acuité has reaffirmed its long-term rating of ‘ACUITE BBB-’ (read as ACUITE triple B minus) and its short-term rating of 'ACUITE A3' (read as ACUITE A three) on Rs.16.86 crore bank facilities of Shree Rayon Private Limited (SRPL). The outlook is ‘Stable’.   Rationale for Rating Reaffirmation The rating reaffirmation factors in the steady operating performance of the company. The rating also factors in extensive experience of management and established track record of operations, moderate financial risk profile along with adequate liquidity position of the company. The rating is however constrained by working capital intensive nature of operations and foreign exchange fluctuation risk along with its presence in highly fragmented industry with intense competition.

About the Company

The company was incorporated in 1999 by Mr. Bharat Jivraj Mehta and Mr. Girish Jivraj Mehta and is into manufacturing of finished cloth from raw polyester and viscose yarn. The manufacturing process includes weaving, dyeing and packaging. Apart from domestic sales, the company also sells its produce to Europe, Dubai, Sri Lanka, Iran, Cambodia, and several other countries. The company has 3 factories in Boisar (Maharashtra) with an installed capacity of 54 lakh meters per annum.

Unsupported Rating

­Not Applicable

Analytical Approach

­Acuité has considered the standalone business and financial risk profile of SRPL to arrive at the rating.

Key Rating Drivers

Strengths

­Extensive experience of management and established track record of operations SRPL is operating the textile business for the past two decades and has been able to build a strong reputation and brand in the industry over the years. The experience of the promoters has enabled the company to maintain long and healthy relationships with its customers and suppliers. The promoters of the company, Mr. Girish Mehta and Mr. Bharat Mehta have been working in the textile industry for over two decades and have experience in understanding the demand supply trends of the textile industry. This has also helped SRPL to establish long relationship with reputed clients in the industry which includes names like Raymond Limited, Reid & Taylor and Arvind Limited for more than 15 years. Acuite believes SRPL will continue to benefit over the medium term from its longstanding association with its key customers as well as suppliers. Steady operating performance          The company’s operating income stood at similar levels at Rs. 83.73 crore in FY25 compared to Rs. 83.90 crore in FY24 due to steady execution of orders. Further, the company has booked revenue of Rs. 32.58 crore till August 2025 and is expecting to book around ~Rs. 90 Crore in FY26. The operating profit margin of the company declined marginally and stood at 14.04 percent in FY25 as compared to 14.76 percent in FY24 due to the increase in the employee costs. Subsequently, the PAT margin of the company stood at 6.62 percent in FY25 compared to 7.62 percent in FY24. Sustenance of operating margins while increasing its scale will remain a key monitorable.   Moderate financial risk profile The company has moderate financial risk profile marked by moderate net worth, below unity gearing and comfortable debt protection metrics. The company’s tangible net worth of Rs. 48.47 crore as on 31 March 2025 as against Rs. 39.81 crore as on 31 March 2024. The gearing level of the company stood at 0.18 times as on 31 March 2025 as against 0.30 times as on 31 March 2024. The total debt of the company stood at Rs. 8.63 crore as on 31 March 2025 that comprises of unsecured loan of Rs.2.06 crore and short-term debt of Rs. 6.57 crore. The interest coverage ratios of the company stood comfortable with interest coverage ratio (ICR) of 6.98 times in FY25 against 5.40 times in FY24. The Debt Service Coverage Ratio (DSCR) stood at 5.20 times in FY25 against 2.78 times in FY24. The total outside liabilities to tangible net worth (TOL/TNW) of the company stood at 0.27 times in FY25 as against 0.46 times in FY24. Acuite expects SRPL’s financial risk profile to remain moderate in near to medium term.

Weaknesses

­Working capital intensive operations The company’s operations remained working capital intensive as evident from Gross Current Asset (GCA) of 158 days as on March 31, 2025, as against 126 days as on March 31, 2024. The inventory days stood at 103 days as on March 31, 2025, as compared against 75 days as on March 31, 2024. The debtor days stood at 40 days as on March 31, 2025, against 27 days as on March 31, 2024. The creditor days of the company stood at 37 days as on March 31, 2025, as against 36 days as on March 31, 2024. The company majorly does advance payments to the suppliers to get the yarns at a discounted rate. The average utilization of the fund-based limits of the company remains low at ~42.3 percent in last twelve months ended July’25. Acuite believes that the working capital operations of the company will remain at similar levels over the medium term given the nature of the industry. Highly fragmented industry with intense competition The company has a presence in highly fragmented and competitive textile industry, thus limiting its bargaining power in terms of pricing and credit terms with customers. Moreover, the textile industry is highly vulnerable to fluctuation in the global market and several other factors. Foreign exchange fluctuation risk The company deals in exports to various countries across the globe which contributes around ~30 percent to the total revenue. As a result, the company’s business is exposed to fluctuations in foreign exchange rates. The company does not engage in any foreign currency hedging methods to mitigate this risk.

Rating Sensitivities

Sustained improvement in operating income and profitability Further elongation of working capital cycle Changes in financial risk profile

Liquidity Position

Adequate

The company has an adequate liquidity position marked by adequate net cash accruals against its maturing debt obligations. The company generated cash accruals of Rs. 7.26 crore in FY25 as against maturing debt obligation of Rs. 0.03 crore over the same period. The company maintains unencumbered cash and bank balances of Rs.0.09 crore as on March 31, 2025.The current ratio stood at 3.12 times as on March 31, 2025. The average utilization of the fund-based limits of the company remains low at ~42.3 percent in last twelve months ended July’25. Acuité believes that going forward the company is likely to maintain adequate liquidity position on account of steady accruals.

Outlook: Stable

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Other Factors affecting Rating

­None

Key Financials

Particulars	Unit	FY 25 (Actual)	FY 24 (Actual)
Operating Income	Rs. Cr.	83.73	83.90
PAT	Rs. Cr.	5.54	6.40
PAT Margin	(%)	6.62	7.62
Total Debt/Tangible Net Worth	Times	0.18	0.30
PBDIT/Interest	Times	6.98	5.40

Status of non-cooperation with previous CRA (if applicable)

­Not Applicable

Any other information

­None

Applicable Criteria

• Default Recognition :- https://www.acuite.in/view-rating-criteria-52.htm • Manufacturing Entities: https://www.acuite.in/view-rating-criteria-59.htm • Application Of Financial Ratios And Adjustments: https://www.acuite.in/view-rating-criteria-53.htm

Note on complexity levels of the rated instrument

­In order to inform the investors about complexity of instruments, Acuité has categorized such instruments in three levels: Simple, Complex and Highly Complex. Acuite’s categorisation of the instruments across the three categories is based on factors like variability of the returns to the investors, uncertainty in cash flow patterns, number of counterparties and general understanding of the instrument by the market. It has to be understood that complexity is different from credit risk and even an instrument categorized as 'Simple' can carry high levels of risk. For more details, please refer Rating Criteria “Complexity Level Of Financial Instruments” on www.acuite.in.

Rating History

Date Name of Instruments/Facilities Term Amount (Rs. Cr) Rating/Outlook 24 Jun 2024 Buyers Credit Short Term 2.57 ACUITE A3 (Reaffirmed) Cash Credit Long Term 12.00 ACUITE BBB- | Stable (Reaffirmed) Proposed Long Term Bank Facility Long Term 2.29 ACUITE BBB- | Stable (Reaffirmed) 27 Mar 2023 Buyers Credit Short Term 2.50 ACUITE A3 (Reaffirmed) Cash Credit Long Term 12.00 ACUITE BBB- | Stable (Reaffirmed) Term Loan Long Term 1.32 ACUITE BBB- | Stable (Reaffirmed) Proposed Long Term Bank Facility Long Term 1.04 ACUITE BBB- | Stable (Reaffirmed) 17 Feb 2022 Cash Credit Long Term 12.00 ACUITE BBB- | Stable (Reaffirmed) Term Loan Long Term 4.86 ACUITE BBB- | Stable (Reaffirmed)

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Annexure - Details of instruments rated

Lender’s Name ISIN Facilities Date Of Issuance Coupon Rate Maturity Date Quantum (Rs. Cr.) Complexity Level Rating Punjab National Bank Not avl. / Not appl. Buyers Credit Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 2.57 Simple ACUITE A3 | Reaffirmed Punjab National Bank Not avl. / Not appl. Cash Credit Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 12.00 Simple ACUITE BBB- | Stable | Reaffirmed Not Applicable Not avl. / Not appl. Proposed Long Term Bank Facility Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 2.29 Simple ACUITE BBB- | Stable | Reaffirmed

Contacts

Mohit Jain Chief Analytical Officer - Rating Operations Nidhi Gala Associate Analyst - Rating Operations	Contact details exclusively for investors and lenders Mob: +91 8591310146 Email ID: analyticalsupport@acuite.in

About Acuité Ratings & Research

Acuité is a full-service Credit Rating Agency registered with the Securities & Exchange Board of India (SEBI). The company received RBI Accreditation as an External Credit Assessment Institution (ECAI) for Bank Loan Ratings under BASEL-II norms in the year 2012. Acuité has assigned ratings to various securities, debt instruments and bank facilities of entities spread across the country and across a wide cross section of industries. It has its Registered and Head Office in Kanjurmarg, Mumbai. Disclaimer: An Acuité rating does not constitute an audit of the rated entity and should not be treated as a recommendation or opinion that is intended to substitute for a financial adviser's or investor's independent assessment of whether to buy, sell or hold any security. Ratings assigned by Acuité are based on the data and information provided by the issuer and obtained from other reliable sources. Although reasonable care has been taken to ensure that the data and information is true, Acuité, in particular, makes no representation or warranty, expressed or implied with respect to the adequacy, accuracy or completeness of the information relied upon. Acuité is not responsible for any errors or omissions and especially states that it has no financial liability whatsoever for any direct, indirect or consequential loss of any kind, arising from the use of its ratings. Ratings assigned by Acuité are subject to a process of surveillance which may lead to a revision in ratings as and when the circumstances so warrant. Please visit our website (www.acuite.in) for the latest information on any instrument rated by Acuité. Please visit https://www.acuite.in/faqs.htm to refer FAQs on Credit Rating. Note: None of the Directors on the Board of Acuité Ratings & Research Limited are members of any rating committee and therefore do not participate in discussions regarding the rating of any entity.