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| Product | Quantum (Rs. Cr) | Long Term Rating | Short Term Rating |
| Bank Loan Ratings | 68.73 | ACUITE BB | Stable | Assigned | - |
| Bank Loan Ratings | 10.50 | - | ACUITE A4+ | Assigned |
| Total Outstanding | 79.23 | - | - |
| Total Withdrawn | 0.00 | - | - |
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Rating Rationale |
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Acuite has assigned its long-term rating of ‘ACUITÉ BB' (read as ACUITE Double B) and short-term rating of ‘ACUITÉ A4+’ (read as ACUITE A four plus) on the Rs. 79.23 Cr. bank facilities of Asia Bulk Sacks Private Limited (ABSPL). The outlook is ‘Stable’.
Rationale for rating The assigned rating considers the company’s experienced management and long operational track record. The rating also factors in the modest scale of operations with stable profitability and adequate liquidity position. However, the rating is constrained by the moderate financial risk profile with debt funded capex plan, working capital–intensive nature of operations, susceptibility of profitability to volatility in raw material prices, foreign exchange fluctuation risk and tariff-related risks. |
| About the Company |
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Asia Bulk Sacks Private Limited (ABSPL) was incorporated in 1984 as ‘Asia Woven Sacks Private Limited’. Subsequently, the company was taken over by Mr. Ajit Chaudhari and Mr. Chatrasinh Chaudhari, on December 29, 2001. Consequently, on November 6, 2012, the company’s name was changed to its current name. The company expanded and diversified into manufacturing FIBC (Flexible Intermediate Bulk Containers) in addition to its existing product line of woven sacks. In 2019, the company was acquired by the Gandhi family. Currently, Mrs. Geeta Nilesh Gandhi and Mr. Aditya Nilesh Gandhi serve as directors and Mr. Nilesh Gandhi is the CEO of the company.
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| Unsupported Rating |
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Not Applicable
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| Analytical Approach |
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Acuite has considered the standalone business and financial risk profile of ABSPL to arrive at the rating.
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| Key Rating Drivers |
| Strengths |
| Experienced management and established track record of operations
ABSPL has an established track record of more than two decades in this line of business with an experienced management. The company is managed by Gandhi family since 2019. The experience of the promoters has helped the company to maintain a healthy relationship with its customers and suppliers. Acuité believes that the company will benefit from the long track record of operations along with a healthy relationship with its customer and suppliers. Modest scale of operations with stable profitability The company has maintained a modest operating scale over the past three years, reporting a revenue of Rs.120.33 Cr. in FY2025, Rs.98.21 Cr. in FY2024, and 107.91 Cr. in FY2023. In H1FY2025, ABSPL has recorded a revenue of ~ Rs. 73.89 Cr. and projects to close the financial year with revenue in the range of Rs. 160–170 Cr. Exports account for approximately 85–90 per cent of ABSPL’s total revenue, with key markets including the United States, Europe, the Middle East, and several Asian countries. The EBITDA margins improved to 7.92 per cent in FY2025 from 6.04 per cent in FY2024. The PAT margin also rose to 1.23 per cent in FY2025 from 0.60 per cent in the previous year. |
| Weaknesses |
| Moderate financial risk profile
The financial risk profile of the company is moderate, marked by moderate net worth, gearing and debt protection metrics. The net worth of the company stood at Rs. 36.67 Cr. as of March 31, 2025, compared to Rs. 35.19 Cr. as of March 31, 2024, the improvement in net worth is mainly due to the retention of profits. Further, the gearing of the company stood at 1.16 times as of March 31, 2025, compared to 0.99 times as of March 31, 2024. The debt protection metrics are moderate, with the Interest Coverage Ratio (ICR) at 2.29 times in FY2025, compared to 2.03 times in FY2024. The Debt Service Coverage Ratio (DSCR) stood at 1.42 times in FY2025 as against 1.02 times in the previous year. The Debt-to-EBITDA ratio remained high at 4.43 times as of March 31, 2025, compared to 4.53 times as of March 31, 2024. In FY2025, the company completed a capital expenditure of ~ Rs.12.00 Cr. for the installation of a 3 MW solar power generation facility. In FY2026, it is undertaking an additional capex of ~ Rs. 22.35 Cr. aimed at expanding production capacity and resolving operational bottlenecks. The funding structure includes Rs. 7 Cr. term loan for land acquisition and a Rs. 15.00 Cr. loan for plant and machinery, of which 5 Cr. has been disbursed to date, the rest would be funded through own funds. Acuite believes that, notwithstanding the benefits of the capex, the additional debt is likely to moderate the financial risk profile further. Working capital intensive nature of operations The working capital operations of the company are intensive, as reflected in Gross Current Assets (GCA) of 175 days in FY2025, compared to 208 days in FY2024. The debtor collection period improved to 29 days in FY25, compared to 37 days in FY24. The company generally provides a credit period of 30–60 days, depending on the customer. Inventory days also improved to 120 days in FY25, compared to 147 days in FY24. Creditor days stood at 49 days in FY25 compared to 38 days in FY24, with the company typically enjoying a credit period of 30–60 days. Additionally, the average utilization of fund-based working capital limits remained high at approximately 96.28% over the five-month period ending August 2025. Acuité believes that ABSPL’s working capital operations are likely to remain intensive over the medium term, given the nature of its business. Susceptibility of profitability to volatility in raw material prices The company’s primary raw material is polypropylene granules, which are closely linked to crude oil prices. Given the inherent volatility in crude oil markets, fluctuations in raw material costs can directly affect the company’s profitability margins. Additionally, the company operates in a competitive and fragmented industry with low entry barriers, resulting in pressure from both organised and unorganised players offering similar products and services. Hence, the bargaining power of the company remains low due to the competitive nature of the industry. Foreign exchange fluctuation and Tariff related risk The company imports over 60 per cent of its key raw material, polypropylene granules, from international suppliers, exposing it to foreign exchange rate fluctuations that can impact both revenue and margins. Additionally, the company exports approximately 35–40 per cent of its products to the United States and other countries providing natural hedging which is mitigating the risk to an extent. The business remains vulnerable to changes in tariff structures in the international market. The imposition of higher tariffs by the U.S. on Indian goods poses a risk to the company’s competitiveness and profitability in that market in medium to long term. |
| Rating Sensitivities |
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Ability to continuously improve its scale of operations and profitability.
Changes in financial risk profile owing to higher than envisaged debt funded capex. Deterioration in Working capital cycle. |
| Liquidity Position |
| Adequate |
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The company’s liquidity position is adequate, marked by generation of sufficient net cash accruals of Rs. 4.68 Cr. in FY2025 as against its maturing debt obligations of Rs. 2.07 Cr. during the same tenure. In addition, it is expected to generate sufficient cash accruals in the range of Rs. 5.98 – 7.55 Cr. as against its maturing repayment obligations of around Rs. 0.60 – 2.02 Cr. over the medium term. The current ratio stood at 1.32 times as of 31st March 2025 as against 1.41 times as of 31st March 2024. Further, reliance on fund-based working capital limits remained high, with average utilization at ~96 per cent over the five-month period ending August 2025. The cash and bank balance for FY25 stood at Rs. 0.37 Cr. Acuité believes that the liquidity position of the company will remain adequate, supported by steady cash 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 (Actual) | FY 24 (Actual) |
| Operating Income | Rs. Cr. | 120.33 | 98.21 |
| PAT | Rs. Cr. | 1.48 | 0.59 |
| PAT Margin | (%) | 1.23 | 0.60 |
| Total Debt/Tangible Net Worth | Times | 1.16 | 0.99 |
| PBDIT/Interest | Times | 2.29 | 2.03 |
| Status of non-cooperation with previous CRA (if applicable) |
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None
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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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