| Experienced management and widened presence
The promoters of the group possess several decades of experience in the packaged food industry. With a distribution network exceeding 1,100 distributors, ASL has strengthened its presence in Tier III and IV towns by offering affordable, low-unit packs tailored to the preferences of rural consumers. As of 5MFY26, approximately 84% of ASL’s revenue was concentrated in the top two states, West Bengal and the Northeast regions. Post acquisition, the group now operates across 20 Indian states, including West Bengal, Punjab, Uttar Pradesh, Maharashtra, Odisha, Jharkhand, Bihar and others and has expanded its export footprint to Africa and the Middle East regions. The products are marketed under the brands Annapurna and Madhur. Acuite believes that the group's expansion into diverse geographies and product categories, combined with the management's extensive experience, will support its growth and operational stability over the medium term.
Increasing Scale of Operations
The group’s operating income has shown improvement by 54% and stood at Rs.408.52 Cr. in FY25 as against Rs.265.30 Cr. in FY24 backed by healthy demand majorly from the rural market, deeper penetration, synergies from recent acquisition and broader product portfolio. Further, the group achieved Rs108.00 Cr. in Q1FY26. The EBITDA margin stood at 11.70 percent in FY25 as against 10.44 percent in FY24 due to group’s ability to expand the operations while having better control over operating expenses. Therefore, there have been decline in other manufacturing costs (factory expenses), administrative costs (loading and unloading, office expenses, packaging charges) and selling expenses. The PAT margin stood at 5.27 percent in FY25 as against 4.95 percent in FY24 due to increase in operating margin. Further, EBITDA and PAT margins stood at 12.85% and 6.95% in Q1FY26. Acuite believes scale of operations will improve over the medium term backed by demand from rural markets and synergies from inorganic expansion.
Healthy Financial Risk Profile
The financial risk profile of the group is healthy marked by increase in networth, gearing below unity and comfortable debt protection metrics. The tangible networth of the group stood at Rs.166.17 Cr. in FY2025 as compared to Rs.102.33 Cr. in FY2024 due to accretion of reserves and capital infusion. During FY25, ASL raised Rs.150.00 Cr. through Qualified Institutional Buyer and issued share warrants of Rs.17.70 Cr. Further, share warrants of 450000 shares remains unsubscribed of Rs.3.31 Cr. and has been transferred to capital reserve. Additionally, ASL has issued 2375000 share warrants at Rs.351 per share, of which 25% i.e. Rs.20.84 Cr. has been received in FY26.
The gearing stood below unity at 0.69 percent in FY2025 compared to 0.62 percent in FY2024. The interest coverage ratio stood comfortable at 4.43 times in FY2025 compared to 4.54 times in FY2024. The debt portfolio increase was due to capital expenditure and to meet working capital requirements to fund the increased business operations. The debt service coverage ratio stood comfortable at 3.56 times in FY2025 compared to 2.87 times in FY2024. The TOL/TNW stood at 0.99 times in FY2025 compared to 1.19 times in FY2024. Acuite believes that the financial risk profile will remain on similar levels over the medium term supported by continued capital infusion, promoters’ contribution and debt funded capex plans.
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| Intensive Working Capital cycle
The working capital cycle is marked intensive as reflected from Gross Current Assets (GCA days) of 177 days in FY2025 compared to 164 days in FY2024. The inventory days stood at 77 days in FY2025 as compared to 89 days in FY2024. The group stores 4-5 products (like laminates, refined flour, seasonings, gifts and spare parts) for 3-4 months and has created 108 Strategic Business Units (SKUs) across different states. Backward integration through a flour mill improved cost efficiency and supply chain control. The debtor days stood at 52 days in FY2025 compared to 40 days in FY2024. The other current assets of Rs. 39.96 Cr. includes other loans and advances of Rs. 14.84 Cr, stock of coins for promotional activities of Rs. 8.82 Cr, material loans of Rs.3.84 Cr, and others. The creditor days stood at 31 days in FY2025 compared to 87 days in FY2024. The group has repaid its creditors and secure heavy discounts. Acuite believes that working capital requirements are expected to remain at similar levels due to the stocking and collection mechanisms policy of the group over the medium term.
Highly competitive and fragmented industry with high obsolescence risk
The group operates in a highly competitive and fragmented FMCG industry as majority turnover of the group is being derived from snacks products and majority of the revenues are being generated from West Bengal. This segment is categorized by the presence of multiple players and brand consciousness of a large part of consumers. The segment is also susceptible to volatility in the economic scenario. However, the diversified product profile and established presence mitigate this risk to some extent.
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