Established track record of operation in Uttar Pradesh (U.P) and experience promoters in Beverage and alcohol Industry
Superior Industries Limited (SIL) was incorporated in 1998 as a private limited company. The company has established presence in the manufacturing and bottling of liquor business of more than two decades leading to longstanding relations with its customers and suppliers. The promoter of the company, Mr. Pradeep Agarwal has extensive experience in the beverages industry since 1990’s as he initially started with Coca-Cola India through the franchise agreement for bottling and distribution of its soft drinks, juice and packaged drinking water. The top management is ably supported by a well-qualified and experienced second line of management. SIL’s management focus is on the country liquor segment as U.P. is one of the major markets in the country for the product. Acuité believes that the promoter's extensive industry experience in beverage and alcohol industry, established relationships with its customers and suppliers, ongoing capex will aid SIL’s business risk profile over the medium term.

Support from group entities       
Superior Group and Superior Industries Limited (SIL) are being promoted by Mr. Pradeep Agarwal. Superior group consist of Superior Drinks Private Limited, Narmada Drinks Private Limited, Indo European Breweries Limited, and Udaipur Beverages Limited and are engaged in processing and bottling of soft drinks and packaged water for Coca-Cola India. SIL has received funding support in the form of equity capital from Superior Group and the promoter. Further, Udaipur Beverages Limited has extended Letter of Comfort to the banking institution for the banking facilities availed and personal guarantee has been given by Mr. Pradeep Agarwal to the bank. Acuité derives comfort from the guarantee of promoter and Letter of Comfort extended by the group company.

Stable Scale of operations with subdued profitability
The company maintained a stable scale of operations with operating income increasing to 361.65 Cr in FY25 (Prov.) from 335.48 Cr in FY24 and 199.20 Cr in FY23. The growth in revenue is primarily driven by consistent demand across product segments. However, the company’s operating profit margins have slightly declined to 8.47 per cent in FY25 (Provisional) from 9.94 per cent in FY24 and 9.06 per cent in FY23. The decline in margins is attributed to increased input costs and competitive pricing pressures. The company had reported operating PBT of Rs. 1.37 Cr in FY25 as against operating PBT level loss of Rs. 6.37 Cr in FY24. In FY25 the PAT of Rs. 10.26 Cr was supported by non-operating income of Rs. 10.69 Cr which mainly included profit on sale of investment. Further, SIL has ~Rs. 121 Cr recoverable from Vishal Cruise Private Limited (under insolvency process in NCLT) as on March 31, 2025 which is to be written off in next 3-4 years (as indicated by management) which is expected to impact the profitability of the company to a great extent. Acuité believes that the company’s ability to sustain revenue growth and profitability would remain a key rating sensitivity.
 

Moderate financial risk profile   
The company’s financial risk profile remains moderate, marked by improving net worth, higher gearing, and moderate debt protection metrics. The net worth of the company improved and stood at Rs. 28.56 Cr. in FY25 (provisional) as against Rs. 18.30 Cr. in FY24. The improvement is mainly due to accretion of profits to reserves. The total debt of SIL stood at Rs. 218.87 Cr in FY25 (prov.) as compared to Rs. 130.91 Cr. in FY24. The interest coverage ratio (ICR) and debt service coverage ratio (DSCR) stood at 5.41 times and 1.34 times respectively in FY25 (Prov), compared to 2.85 and 1.08 times in FY24. The gearing level rose to 7.66 times from 7.15 times, reflecting higher debt levels which are mainly in the form of unsecure loans taken from the group companies. TOL/TNW stood high at 9.76 times in FY25 (Provisional) from 17.29 times in FY24. NCA/TD declined to 0.15 times in FY25 (provisional) from 0.19 times in FY24. Acuité expects the financial risk profile to remain moderate over the medium term, supported by scale expansion and debt-funded capex.

Exposure to high regulatory risk
Indian liquor industry is a highly government regulated industry, with regulations ranging from licensing, production, distribution, inter-state exports, raw material availability and advertisements. There have been continuous regulatory changes in terms of state government's policies towards liquor consumption. The industry is expected to remain highly regulated by the government going forward, exposing the business risk profile to adverse regulatory changes. Furthermore, players within the industry are susceptible to high excise duties. Acuité believes that any government regulation could have significant impact on the operating income and profitability of the company.