| Established track record, global presence leading to growth in scale of operations
SAR Group has a long-standing operational track record of operations, offering comprehensive solutions in the logistics and shipping sector, catering to multiple industries such as automobile, manufacturing, chemicals, perishables, pharmaceuticals, etc. The group’s operations are overseen by its promoters, supported by a qualified and experienced management team. Their extensive experience has enabled the group to build healthy stakeholder relationships, resulting in consistent back-to-back orders and long-term contracts. The major contribution of the revenue is from the ocean freight which accounted for ~80 percent of their revenue in FY25 and is primarily driven by freight rates that remains volatile to the geo-political situations. Further, the group has been expanding its global presence and currently operates over 25 offices globally, manages multiple warehouses (including two owned facilities located in Bhiwandi and Talegaon) which has led to continuous increase in volumes of the years. Therefore, owing to stabilisation in the freight rates and growing volumes, the operating revenue of the group stood improved at Rs. 1462.95 Cr. in FY25 (Rs. 1029.69 Cr. in FY24), reflecting a y-o-y growth of ~42 percent. Further, the group reported revenue of Rs. 1265 Cr. in H1FY26 and is expected to close FY26 at around Rs. 2000 Cr. topline.
Additionally, the group has established its network in the India-USA trade lane (contributing ~95 percent of its revenue in FY25), and with the trade policy signed between the nations, the group is expected to benefit from the same which shall also remain a key rating monitorable.
Moderate financial risk profile
The financial risk profile of the group stood moderate marked by growing net worth of Rs. 197.07 Cr. as on March 31, 2025 (Rs. 171.16 Cr. as on March 31, 2024), owing to accretion of profits to reserves. Further, while the total debt of the group stood increased at Rs. 166.67 Cr. as on March 31, 2025 (Rs. 84.79 Cr. as on March 31, 2024), majorly consisting of the working capital borrowings, however, gearing (debt-equity) remained below unity at 0.85 times in FY25 (0.50 times in FY24). Moreover, the debt protection metrics stood comfortable with interest coverage ratio of 5.50 times in FY25 (6.58 times in FY24) and debt service coverage ratio of 2.80 times in FY25 (3.56 times in FY24). Going forward, Acuité expects the financial risk profile shall improve on account no major debt-funded capex plans and improving cash accruals.
Moderate working capital operations
The working capital operations of the group are moderately managed marked by gross current assets (GCA) of 85 days in FY25 (110 days in FY24). For the ocean freight, the company provides an average credit period of 60 days to their customer (post-departure) and receives an average credit period of 30 days from the shipping service providers while for the air freight, it extends credit period of 45 days to customer and receives 15 days of credit from the airline service provider. However, the fund-based banking limits remains fully utilized which shall remain a key rating sensitivity.
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| Thin operating margins
The operating margins stood low at 4.52 percent in FY25 (3.64 percent in FY24). This is primarily due to factors such as fluctuating carrier rates, high operational costs, geo-political uncertainties, regulatory related risks, currency risks, owing to which there remains a pricing pressure on the margins.
Susceptibility to inherent risks in the EXIM industry
The freight forwarding industry in India remains exposed to macroeconomic and sectoral vulnerabilities, including sensitivity to global EXIM trade cycles and economic slowdowns, which can affect freight volumes, margins and working capital efficiency. Competitive intensity continues to rise with the presence of large, well-capitalised players in ocean and container shipping, limiting pricing flexibility and constraining the ability to pass on cost escalations. Global ocean freight dynamics further add to operational risks, as geopolitical disruptions such as route blockages, regional conflicts and supply chain dislocations have led to schedule delays, congestion and longer transit routes, increasing cost and service uncertainty. Tight global capacity, limited fleet additions and persistent port congestion continue to drive volatility in freight rates. Additionally, with a significant share of revenue linked to the US market, any slowdown in US import demand or adverse tariff actions can materially impact shipment volumes and overall performance.
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