Established track record and experienced management
SSVWPL, incorporated in 2006, is promoted by Mr. Sengoda Mani, Mr. Mani Sakthivel and Mr. Mani Jayaprakash. The promoters bring over three decades of experience in the textile industry and are supported by a qualified and experienced management team. Their extensive industry expertise has enabled the company to establish strong relationships with suppliers and customers, ensuring steady raw material availability and repeat business. The company has also benefited from continuous capacity expansion in recent years, which has supported growth in its manufacturing operations. Further, SSVWPL derives locational advantages from being situated in Erode, Tamil Nadu, a well-established textile hub that provides easy access to raw materials, skilled labour, processing facilities and a wide network of market intermediaries. Acuite believes that SSVWPL will continue to benefit from its experienced management, established industry presence and locational advantages.

Improved scale of operations with moderation in margins
The company’s revenue increased to Rs. 237.70 crore in FY25 from Rs. 178.32 crore in FY24, driven primarily by higher volumes of grey cloth sold during the year, along with an improvement in realisations. The average selling price increased to Rs. 43.52 per unit in FY25 from Rs. 40.58 per unit in FY24, supported by higher yarn prices. The demand for particular patterns and counts remains variable and is largely driven by retailer preferences. However, the operating profit margin moderated to 11.89 per cent in FY25 from 13.45 per cent in FY24 due to volatility in yarn prices. The PAT margin also declined to 3.45 per cent in FY25 from 3.99 per cent in FY24, mainly due to higher depreciation costs incurred during the year. Further, SSVWPL has reported revenue of Rs. 267.86 crore in FY26, with a net profitability margin of around 4–4.5 per cent. The revenue growth has been supported by continuous capacity expansion, including the addition of 32 air jet looms in FY26 and ongoing capex initiatives, which are expected to enhance production capacity and operational efficiency. Acuite believes that the company’s ability to sustain growth in revenues while improving profitability margins amid raw material price volatility will remain a key rating monitorable.

Moderate financial risk profile
SSVWPL has a moderate financial risk profile, characterised by modest net worth, moderate gearing and comfortable debt protection metrics. The net worth improved to Rs. 44.18 crore as on March 31, 2025 from Rs. 35.96 crore as on March 31, 2024, driven by accretion of profits to reserves and unsecured loans from promoters amounting to Rs. 8.13 crore, which have been treated as quasi equity. The gearing improved and stood below unity at 0.96 times as on March 31, 2025 as against 1.29 times as on March 31, 2024, primarily due to a reduction in both long-term and short-term borrowings. The total debt stood at Rs. 42.31 crore as on March 31, 2025 compared to Rs. 46.57 crore as on March 31, 2024, comprising long term debt of Rs. 23.91 crore, short term debt of Rs. 8.74 crore and current maturities of Rs. 9.66 crore. Unsecured loans from promoters amounting to Rs. 8.13 crore have been treated as quasi equity as per sanctioned terms. The TOL/TNW stood at 2.43 times as on March 31, 2025. The Interest Coverage Ratio (ICR) improved to 5.78 times in FY25 from 5.05 times in FY24, while the Debt Service Coverage Ratio (DSCR) moderated slightly to 1.90 times in FY25 from 2.03 times in FY24. Acuité believes that the ability of SSVWPL to improve its financial risk profile over the medium to long term will remain a key rating sensitivity factor.

Moderately intensive working capital operations
SSVWPL has moderately intensive working capital operations, with average gross current asset (GCA) days of around 121 days during FY23 to FY25. The GCA days improved to 110 days in FY2025 from 133 days in FY2024. Inventory days remained low and stable at 5 days in FY2025 as against 6 days in FY2024. Debtor days improved to 100 days in FY2025 from 129 days in FY2024 and are broadly in line with the average credit period of 90- 120 days extended to customers. Creditor days stood at 86 days in FY2025 as against 98 days in FY2024, while the average credit period received from suppliers is around 60- 90 days. Acuite believes that the company’s ability to sustain improvement in its working capital cycle, particularly through efficient receivables management, will remain a key rating sensitivity.

Susceptibility of profitability to raw material price volatility and stiff competition
SSVWPL’s profitability margins remain exposed to fluctuations in raw material prices, particularly viscose yarn, which constitutes a major portion of input costs. Any adverse movement in yarn prices could impact margins, as the company may face constraints in fully passing on cost increases to customers due to intense competition. The company’s strong sourcing linkage with Mothi Spinner Private Limited provides stability in raw material availability, although exposure to price volatility persists. Further, raw material prices remain volatile due to demand supply dynamics, global market trends and regulatory factors, which can impact realisations across the textile value chain. As a result, the company’s profitability remains sensitive to such price fluctuations.