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| Product | Quantum (Rs. Cr) | Long Term Rating | Short Term Rating |
| Bank Loan Ratings | 26.78 | ACUITE BB+ | Stable | Reaffirmed | - |
| Total Outstanding | 26.78 | - | - |
| Total Withdrawn | 0.00 | - | - |
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Rating Rationale |
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Acuité has reaffirmed the long-term rating of ‘ACUITE BB+’ (read as ACUITE double B plus) on the Rs. 26.78 crore bank facilities of Amigo Industries (AI). The outlook is ‘Stable’.
Rationale for reaffirmation
The rating reaffirmation considers the improvement in scale of operations of the firm and moderate financial risk profile. The rating also considers, the established track record of operations with experienced management and adequate liquidity position. However, the rating remained constrained by declining profitability margins, moderately intensive working capital operations, inherent risk of capital withdrawal associated with partnership firms and exposure to a highly competitive & fragmented industry. |
| About the Company |
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Established in 2010, Gujarat based Amigo Industries (AI) is engaged in manufacturing of corrugated boxes & sheets and POY tubes. The firm also manufactures paper tubes for polyester yarn industry. Its manufacturing facilities are in Morai and Vapi. The business is owned and managed by Mr. Kanhaiyalal Agarwal and Mr. Mrs. Sunita Agarwal. Mr. Garvit Agarwal is the Chief Executive Officer of Box Division and Mr. Yash Agarwal is the Chief Executive Officer of POY Tube Division.
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| Unsupported Rating |
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Not Applicable
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| Analytical Approach |
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Acuité has considered the standalone view of business and financial risk profile of Amigo Industries (AI) to arrive at this rating.
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| Key Rating Drivers |
| Strengths |
| Established track record of operations along with experienced management
Amigo Industries(AI) is owned and managed by Mr. Kanhaiyalal Agarwal along with Mr. Garvit Agarwal and Mr. Yash Agarwal. Mr. Kanhaiyalal Agarwal has experience of more than three decade in the corrugation industry. The extensive experience of the partners has aided the firm in forging long standing relationship is its customers and suppliers. Majority of the top ten customers have been associated with the firm for more than a decade. Acuite believes the firm will continue to benefit from the experience of its partners and maintain its longstanding association with its customers and suppliers. Increase in scale of operations albeit decline in profitability The Firm's revenue increased to Rs. 140.08 crore in FY25 (Prov.) from Rs. 128.88 crore in FY24, reflecting healthy top-line growth. However, the EBITDA margin declined to 7.99 percent in FY25 (Prov.) compared to 9.08 percent in FY24 due to higher raw material costs and increased operating expenses. It is expected to remain in a similar range over the near to medium term. The PAT margin declined sharply to 1.30 percent in FY25 (Prov.) from 5.34 percent in FY24 primarily driven by the write-off of debtors during the year which was ~Rs.2.07 crore (Unit II). Further the firm has booked revenue of Rs. 88.76 cr. in H1FY2026. Acuite believes, the operating performance would expect to remain subdued in the medium term on account of volatility in raw material prices and industry challenges.
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| Weaknesses |
| Moderate Financial risk profile
The firm has a moderate financial risk profile marked by tangible net worth of Rs. 19.11 crore as on 31 March 2025 (Prov.) as against Rs. 18.95 crore as on 31 March 2024. The increase in the net worth is due retention of profits to an extent. The gearing level of the firm stood at 1.27 times as on 31 March 2025 (Prov.) as against 1.03 times as on 31 March 2024 due driven by increase in borrowings. The coverage ratios of the firm stood moderate with Interest Coverage Ratio (ICR) of 2.25 times for FY25 (Prov.) as against 5.83 times for FY24. The Debt Service Coverage Ratio (DSCR) stood at 1.03 times for FY25 (Prov.) as against 3.09 times for FY24. This decline was primarily due to lower operating profitability and the impact of bad debt write-off during the year. The total outside liabilities to tangible net worth (TOL/TNW) of the firm stood at 1.81 times for FY25 (Prov.) as against 1.56 times for FY24. The NCA/TD stood at 0.21 times for March 31, 2025 (Prov.). Acuite expects financial risk profile of the firm to remain moderate in near to medium term due to modest net worth base. Moderately intensive working capital operations The Firm is having efficient working capital management as evident from Gross Current Asset (GCA) of 87 days in FY2025 (Prov.) as against 91 days in FY2024. The inventory days are stable and stood at 21 days for FY25 (Prov.) when compared against 16 days for FY24. The debtor days stood at 57 days for FY25 (Prov.) compared against 61 days for FY24. Even though debt days stood comfortable, there have bad debt write offs of Rs. 2.07 Cr. in FY2025(Prov.). The creditor days of the firm stood same at 31 days for FY25 (Prov.) and FY24. The average utilization of the bank limits of the firm remains moderate at ~68.93 percent in last six months ended September 2025. Acuite believes that the working capital cycle will continue to appear intensive over the medium term due to nature of business. Susceptibility of profitability to fluctuations in raw material prices, forex risk in a competitive and fragmented industry The Company is operating in a highly competitive and fragmented industry. It is exposed to intense competition from several players operating in the industry. The kraft paper manufacturers in India are exposed to the risk of volatility in waste paper prices, largely due to intense competition. On account of competitive pressures, players face challenges in passing on increased costs to end users. Business risk profile will remain constrained by exposure to the downturn in the paper industry. The rise in the prices of duplex paper over that of waste paper is expected to be gradual, rendering the profitability susceptible to volatility in the price of paper. Furthermore, any abrupt change in raw material prices due to supply-demand scenario can lead to distortion of prices and affect the profitability of the company. Capital withdrawal Risk associated with Partnership Firm The firm is susceptible to the inherent risk of capital withdrawal given its constitution as a partnership. Any significant withdrawal from the partner’s capital will have a negative bearing on the financial risk profile of the firm. |
| Rating Sensitivities |
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| Liquidity Position |
| Adequate |
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The firm has an adequate liquidity position marked by adequate net cash accruals against its maturing debt obligations. The firm is estimated to generate net cash accruals in the range of Rs. 5.00 - Rs.7.00 crore in FY2026-FY2027 against repayment obligations of around Rs. 2.00 Cr. for the same period. The firm maintains unencumbered cash and bank balances of Rs. 0.02 crore as on March 31, 2025 (Prov.). The current ratio stood at 1.24 times as on March 31, 2025 (Prov.). The average utilization of the bank limits of the firm remains moderate at ~68.93 percent in last six months ended September 2025. Acuite believes that the firm is likely to maintain adequate liquidity position on account of steady accruals.
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| Outlook: Stable |
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| Other Factors affecting Rating |
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None
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| Particulars | Unit | FY 25 (Provisional) | FY 24 (Actual) |
| Operating Income | Rs. Cr. | 140.08 | 128.88 |
| PAT | Rs. Cr. | 1.83 | 6.88 |
| PAT Margin | (%) | 1.30 | 5.34 |
| Total Debt/Tangible Net Worth | Times | 1.27 | 1.03 |
| PBDIT/Interest | Times | 2.25 | 5.83 |
| Status of non-cooperation with previous CRA (if applicable) |
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Not Applicable
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| Any other information |
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None
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| Applicable Criteria |
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• 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 |
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