| Experienced management and established track record of operations:
ABSPL has an established operating track record of over four decades in the industrial packaging industry, having commenced operations in 1984. Over the years, the company has transitioned from manufacturing woven sacks to producing Flexible Intermediate Bulk Containers (FIBCs), enabling it to cater to evolving customer requirements across domestic and international markets. The company benefits from the extensive industry experience of its promoter family, which acquired the company in 2001, and possesses over three decades of experience in the FIBC segment. The day-to-day operations of the company are overseen by Mr. Nilesh Gandhi, Mrs. Geeta Nilesh Gandhi and Mr. Aditya Nilesh Gandhi. The management's experience has supported the company's ability to maintain long-standing customer relationships and expand its presence across multiple export markets. Acuité believes that the promoters' extensive industry experience and demonstrated execution capabilities will continue to support the company's business risk profile and its ability to navigate demand and input cost cycles over the medium term.
Improvement in revenue and profitability:
ABSPL's operating income increased by around 25 percent to Rs.149.43 Cr. in FY2026 from Rs.119.67 Cr. in FY2025, driven by higher export orders and improved capacity utilization. Export revenue accounted for around 89 percent of the total revenue and increased to Rs.132.33 crore in FY2026 from Rs.105.21 crore in FY2025. The company's operating profit margin improved significantly to 11.62 percent in FY2026 from 6.15 percent in FY2025, supported by lower raw material costs, better realizations in the FIBC segment and power cost savings from its 3 MW captive solar power plant which was fully operational during FY2026. Consequently, the PAT margin improved to 4.72 percent in FY2026 from 1.24 percent in FY2025.
Acuite believes that the company's operating performance will continue to improve over the medium term, supported by higher capacity utilization and the benefits arising from the enhanced production capacity.
Moderate financial risk profile:
The financial risk profile of ABSPL is marked by moderate networth, moderate leverage and debt protection metrics. The networth improved to Rs.43.72 Cr. as on March 31, 2026 from Rs.36.67 Cr. as on March 31, 2025 owing to profits accretion during the year. The overall debt position increased to Rs.67.20 Cr. as on March 31, 2026 from Rs.42.47 Cr. as on March 31, 2025. The debt level as on March 31, 2026 comprised, long-term debt of Rs.28.75 Cr, short-term debt of Rs.33.70 Cr. and current maturities of long-term debt of Rs.4.75 Cr. The leverage indicators have deteriorated marginally with gearing level of 1.54 times and total outside liabilities to tangible networth (TOL/TNW) of 1.83 times as on March 31, 2026 respectively as compared to 1.16 times gearing and TOL/TNW of 1.83 times as on March 31, 2025. The debt protection metrics have improved with interest coverage ratio (ICR) of 3.44 times and debt service coverage ratio (DSCR) of 2.66 times in as on March 31, 2026 as against ICR of 2.29 times and DSCR of 1.42 times as on March 31, 2025. Debt to EBITDA also improved to 3.13 times as of March 31, 2026 from 4.43 times as of March 31, 2025.
Acuite believes, despite debt infusion for the capex, the company’s financial risk profile will improve over the medium-term due to improving profitability.
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| Intensive working capital operations:
The company's working capital operations remained intensive, as reflected in its gross current assets (GCA) of 181 days in FY2026 as against 183 days in FY2025. The working capital intensity is primarily driven by high inventory levels, which stood at 117 days in FY2026 as compared to 118 days in FY2025. As exports contribute a major portion of the revenue, the company maintains higher finished goods inventory to efficiently cater to bulk export shipments, resulting in elevated inventory holding levels. Debtor days stood at 36 days in FY2026 as against 29 days in FY2025 and remained broadly aligned with the credit period of around 30 days extended to customers. Creditor days declined to 30 days in FY2026 from 49 days in FY2025. Further, the fund-based working capital limits remained highly utilized, with average utilization of around 95 percent over the 12 months ended March 2026. Acuite believes that the company's working capital operations will remain intensive over the medium term owing to its inventory-intensive export-oriented business model.
Susceptibility of profitability to volatility in raw material prices
The company’s primary raw material is polypropylene granules, the prices of which are largely linked to movements in crude oil prices. Accordingly, fluctuations in crude oil and polymer prices expose the company to raw material cost volatility, which may impact its operating margins, particularly during periods of sharp price movements. Further, the company operates in a competitive and fragmented industry characterized by the presence of both organised and unorganised players, limiting its pricing flexibility and bargaining power. However, the risk is partially mitigated by ABSPL’s established relationships with customers, diversified geographical presence across export markets, and its ability to undertake calibrated price revisions and pass on a portion of raw material cost increases to customers, albeit with a time lag. Acuité believes that the company’s ability to effectively manage raw material procurement and maintain operating efficiencies will remain crucial to sustaining its profitability margins.
Exposure to foreign exchange fluctuation risk:
ABSPL's profitability remains exposed to foreign exchange fluctuation risk due to its high dependence on export revenues. The risk is partly mitigated by a natural hedge, with export revenues constituting around 89 percent of sales and imports accounting for around 73 percent during FY2026. However, the natural hedge only partially offsets the company's foreign currency exposure, resulting in a sizeable net exposure. Further, in the absence of a formal hedging mechanism, the company's profitability remains susceptible to adverse currency movements. Acuité believes that the company's ability to effectively manage its net forex exposure will remain a key monitorable.
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