Extensive promoter's experience­
TCMPL was incorporated in 2016 to manufacture and supply denim fabrics for the domestic and the export markets. The promoters have been in the business of trading of ready-made garments, manufacturing of HDPE (High-Density Polyethylene) Tarapaulin, hospitality and trading through their group companies over the last two decades, which helped them build longstanding relationships with its customers and suppliers. The promoters have also been supporting the business by infusing funds regularly to meet the shortfall in working capital funds and debt servicing. The promoters have infused ~ Rs. 56.42 Cr. in FY2025 in the company. Acuitè believes the promoters will continue to support TCMPL through their experience and fund infusion over the medium term.

Modest but growing scale of business albeit limited operational track record
TCMPL achieved COD from February 2024 onwards. FY2025 marked the first full year operations of the company, where the company generated a revenue of Rs.115.62 Cr. with an EBITDA margin of 12.21 percent. However, the PAT stood negative at Rs. (17.86) Cr. on account of high finance costs and depreciation. TCMPL has generated a revenue of Rs. ~137 Cr. for 9M FY2026. The scale of operations is expected to grow further on account of capacity addition and stabilization of operations. Going forward, the consistent improvement in revenues with the generation of positive net cash accruals will be a key rating monitorable.

­Weak financial risk profile
The financial risk profile of TCMPL is marked by moderate net worth and weak debt protection metrics. The tangible net worth stood increased to Rs. 131.09 Cr. as on March 31, 2025 as against Rs. 100.07 Cr. in March 31, 2024 on account of infusion of funds by the promoters. The gearing (debt-to-equity ratio) stood moderate at 1.13 times on March 31, 2025. However, the Debt-EBITDA levels continue to remain high at 10.14 times in FY2025 due to high debt levels and nascent stage of operations of TCMPL. Further, the debt protection metrics stood low with interest coverage ratio (ICR) at 0.71 times and debt service coverage ratio (DSCR) at 0.60 times in FY2025. The overall financial risk profile is expected to improve over the medium term on account of augmentation of capacities and absence of debt funded capex plans.

Working capital intensive operations
The operations of TCMPL are working capital intensive as evident from the high gross current assets (GCA) of 408 days on March 31, 2025. The higher GCA days are driven by inventory levels of 253 days and debtor levels of 125 days on March 31, 2025. Further, the creditor days stood at 261 days in FY2025. This had led to higher reliance on working capital which stood utilized at 98.87 percent for the last seven months ended October 2025. FY2025 represented the company’s first full year of operations, during which the working capital cycle began, and is expected to stabilize over the medium term.

Highly competitive and fragmented industry
TCMPL operates in a highly competitive and fragmented denim fabric industry amongst several organized and unorganized players. The company also faces stiff competition from several international players in the industry. This limits the bargaining power of the company. However, extensive experience of the promoters helps the company in mitigating the risk to a larger extent.