| Experienced promoters and Established Track Record
Established in 1994, Ajinkya Chemtech Private Limited (ACPL) has an operational track record of over three decades in the agro-input industry. The company is promoted by Mr. Harshanan V. Patil and Mrs. Manjusha H. Patil and is engaged in the manufacturing of crop protection and crop nutrition products, including organic farming input solutions. The promoters have extensive experience in the agro-chemical and agricultural input sector, which has aided the company in establishing relationships with customers, dealers and suppliers over the years. The company is also supported by a team of technical and operational personnel involved in manufacturing, product development, marketing and farmer outreach activities.
Steady growth in operating performance albeit modest scale of operations
The operating scale of the company remained modest, albeit improving, and stood at Rs. 151.65 crore in FY2026 (Prov.) as against Rs. 140.21 crore in FY2025, reflecting a growth of around 8 per cent. The increase in revenue was primarily supported by the launch of new products and higher demand for specialty organic crop protection products, particularly the organic viricide and organic nematicide portfolio. Demand was also aided by increasing preference for residue-free agricultural inputs among export-oriented farmers, especially in fruits and vegetables, where compliance with stringent residue norms is becoming increasingly important. Further, the company reported revenue of Rs. 40.96 crore in Q1FY27 as against Rs. 37.34 crore in Q1FY26. The operating profitability of the company improved, with the operating profit margin increasing to 3.25 per cent in FY2026 (Prov.) from 2.23 per cent in FY2025. The improvement was primarily attributable to a better product mix with higher contribution from specialty products, operating leverage benefits arising from growth in scale of operations, and relatively lower administrative and selling expenses incurred during the year. Consequently, the net profit margin also improved to 1.02 per cent in FY2026 (Prov.) from 0.69 per cent in FY2025. Acuite believes that the company's ability to increase revenue, improve scale of operations and profitability levels through increased contribution from specialty products will remain a key rating monitorable going forward.
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| Below Average Financial Risk Profile
The financial risk profile of the company remained below average, marked by a low net worth, high gearing, and average debt protection metrics. The net worth of the company stood at Rs. 15.97 crore in FY2026 (Prov.), compared to Rs. 11.76 crore in FY2025. The improvement is primarily on account of accretion of profits to reserves. Further, Acuité has considered promoter unsecured loans of Rs. 5.18 crore as quasi-equity, as these are subordinated to bank debt and are supported by an undertaking from the management regarding non-withdrawal. The company's total debt stood at Rs. 39.77 crore as on March 31, 2026 (Prov.), comprising Rs. 1.72 crore of long-term debt, Rs. 36.58 crore of short-term debt, and Rs. 0.06 crore of current maturities of long-term debt. The gearing of the company remained high at 2.49 times as on March 31, 2026 (Prov.), as compared to 2.53 times as on March 31, 2025. Further, the debt protection metrics remained average. The Interest Coverage Ratio (ICR) stood at 1.43 times in FY2026 (Prov.) as compared to 1.55 times in FY2025. The Debt Service Coverage Ratio (DSCR) improved to 1.43 times in FY2026 (Prov.) from 1.19 times in the previous year. The Debt-to-EBITDA ratio improved to 7.53 times in FY2026 (Prov.) from 8.24 times in FY2025. The Net Cash Accruals to Total Debt (NCA/TD) ratio stood at 0.04 times in FY2026 (Prov.) as against 0.03 times in the previous year. Acuite believes, the financial risk profile of the company would remain below average on the back of low net worth base.
Moderately Intensive Working Capital Management
The working capital operations of the company remained moderately intensive, marked by Gross Current Asset (GCA) days of 130 days in FY2026 (Prov.), as against 114 days in FY2025. The increase in GCA days was primarily driven by higher inventory levels and elongation in the receivables cycle. The debtor collection period increased to 93 days in FY2026 (Prov.) from 81 days in FY2025. The company generally extends a credit period of 60-90 days to its customers. Inventory holding also increased to 37 days in FY2026 (Prov.) from 32 days in FY2025. On the other hand, creditor days remained range-bound at 1 day in FY2026 (Prov.) and FY2025. The company typically avails a credit period of up to 30 days from its suppliers. Further, the average utilisation of the fund-based working capital limits remained high at around ~94.76 per cent during the six-month period ended June 2026. Acuite believes that the company's working capital operations would remain moderately intensive on the back of elongated collections.
Exposure to agro-climatic risk and regulatory changes
The company operates in the agro-input industry, which is subject to various regulatory requirements relating to product approvals, registrations, manufacturing standards and marketing practices. Any changes in government regulations, environmental norms, product registration requirements or compliance frameworks could impact product availability, increase compliance costs and affect business operations. Further, delays in obtaining or renewing product registrations and approvals may also adversely impact growth prospects and profitability.
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