| Experienced promoters and Established track record of operations
The Matangi group is promoted by Mr. Mohit Gupta, who has extensive experience of over two decades in the industry. In addition, the top management of the group is aided by equally experienced management personnel. Further, the long track record of operations has helped in building long and healthy relationships with its suppliers and customers. The group has a long-term relationship and an agreement with its key customer in place to supply tyre flaps, tyres, and tubes, which ensures the stability in the revenue and mitigates business risk to an extent. Acuite believes that the group will continue to derive benefit from the long track record of operations and experienced management’s strong understanding of market dynamics.
Increase in revenue, albeit decrease in operating margin
The operating revenue of the group stood at Rs.131.07 Cr. in FY2026 (Prov.) as against Rs.101.32 Cr. in FY2025, driven by higher overall sales volume and improved price realizations of tyre flaps and tubes. The group also continues to benefit from a long-standing business association with its key customer, which continues to support business stability and capacity utilization levels. Despite an increase in the overall sales volume, the EBITDA margin of the group stood at 24.38% in FY2026 (Prov.) against 30.98% in FY2025 owing to the increase in raw material procurement costs along with other operating expenses during the year. Likewise, the PAT margin stood at 16.54% in FY2026 (Prov.) against 19.77% in FY2025. Going forward, the group's revenue profile is expected to benefit from capacity additions at its Dehradun and Gwalior facilities in FY2026 and the proposed expansion into rubber recycling products and solid tyres by utilizing the proposed public offering proceeds. Acuite notes that the ability to ramp up production from existing and proposed facilities while maintaining its profitability levels will remain key monitorable factors.
Moderate Financial Risk Profile
The financial risk profile of the group is marked by moderate net worth, gearing below unity and moderate debt protection metrics. The tangible net worth of the group stood at Rs. 123.73 Cr. as on 31st March 2026 (Prov.) as against Rs. 81.69 Cr. as on 31st March 2025 on account of accretion of profits into reserves, equity infusion, and treatment of unsecured loans of MRL as quasi equity. The capital structure is marked by gearing ratio stood at 0.88 times as on 31st March 2026 (Prov.) as against 1.10 times as on 31st March 2025. Moreover, the interest coverage ratio and debt service coverage ratio stood at 5.78 times and 2.68 times, respectively, as on 31st March 2026 (Prov.). The Total Outside Liabilities/Tangible Net Worth (TOL/TNW) stood at 1.11 times as on 31st March 2026 (Prov.) as against 1.43 times as on 31st March 2025. Going forward, the financial risk profile of the group is expected to strengthen upon successful completion of the proposed public offering through augmentation of the net worth base and the proposed repayment of borrowings. However, the anticipated benefits will accrue only upon successful fundraising, and the same shall remain a key monitorable factor.
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| Intensive working capital operations
The working capital operations of the group remained intensive, marked by GCA days, which stood at 287 days as on 31st March 2026 (Prov.) as against 269 days as on 31st March 2025 wherein the group extends moderate credit to its customers and maintains adequate inventory as and when required for order execution. The inventory days stood at 183 days as on 31st March 2026 (Prov.) against 181 days as on 31st March 2025. Further, the debtor days of the group stood at 104 days as on 31st March 2026 (Prov.) against 100 days as on 31st March 2025 and the creditor days stood at 81 days as on 31st March 2026 (Prov.) against 102 days as on 31st March 2025. Acuite expects the working capital operations of the group to remain in a similar range in the near to medium term owing to the nature of operations.
Susceptibility of profitability to fluctuations in raw material prices and Customer Concentration Risk
The operating margins of the group are susceptible to changes in rubber and carbon black prices, which are highly volatile in nature. Any abrupt change in raw material prices can lead to distortion in market prices and affect the profitability of players. Further, the group is exposed to customer concentration risk as more than 80% of the group’s total sales in FY2026 (Prov.) were generated via its top two customers. Such customer concentration limits the bargaining power with the customers and makes them more susceptible to any change in terms of contracts and risk of cancellation of contracts, thus directly affecting its revenue profile. However, the risk is mitigated to an extent on the back of repeat orders and relationships with its customers over a long period of time.
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