Note:- For activities or ratings of instruments falling under the purview of Financial Sector Regulators other than SEBI, the grievance / dispute redressal mechanisms and investor protection mechanisms provided by SEBI shall not be available.
Rating Rationale
Acuité has assigned the long-term rating of 'ACUITE BB+' (read as ACUITE double B Plus) on the Rs.60.00 Cr. bank facilities of Agro Indus Credits Limited. The outlook is 'Stable'.
Rational for rating
The rating factors in the improving business scale and profitability of the company, as reflected in the strong growth in AUM and disbursements over FY25 and 9M FY26, along with a steady improvement in earnings profile marked by higher PPOP and PAT. The rating also takes cognizance of the significant improvement in asset quality, with declining GNPA and NNPA levels and a considerable increase in the on-time portfolio, indicating strengthened collection efficiency and portfolio seasoning. The rating further derives comfort from the company’s adequate capitalization levels, albeit declining, and its ability to mobilize borrowings to support growth, with moderation in cost of funds supporting margins.
However, the rating is constrained by the moderation in capital adequacy and increasing leverage levels due to rapid on-book portfolio expansion, along with the still moderate albeit improving asset quality profile, as reflected in the residual level of delinquencies.
Going forward, the company’s ability to sustain asset quality improvements, maintain profitability, and augment capital buffers in line with growth will remain key rating sensitivities.
About the company
Kochi based, Agro Indus Credits Limited was incorporated in 1997. The company being Non Banking Finance Company provides Gold Loan, Mortgage Loan and Vehicle Loan. It also does Third Party products like Insurance and Mutual Funds. Mr. Muraleedharan Kesavan, Mr. Arjun Adichazhi Valappil, Mr. Hari Madhusoodanan Nair Syamala Kumari, Mr. Joseph Vadakkekara Antony, Mr. Joseph P Abraham, Mr. Ravimohan Periyakavil Ramakrishnan, Mr. Reddy Njarackavelil Joseph are directors of the company.
Unsupported Rating
Not applicable.
Analytical Approach
Acuité has considered the standalone financial and business risk profiles of AICL to arrive at the rating.
Key Rating Drivers
Strength
Strong Business Growth and Improving Earnings Profile
The company has demonstrated robust growth in its scale of operations, with AUM increasing from Rs.92.37 Cr. in FY24 to Rs.126.34 Cr. in FY25 and further to Rs.170.06 Cr. as of 9M FY26. This has been driven by a sharp rise in disbursements from Rs.252.03 Cr. in FY24 to Rs.406.96 Cr. in FY25 and Rs.577.76 Cr. in 9M FY26, indicating strong business traction. The growth has translated into higher revenue generation, with net interest income increasing from Rs.12.66 Cr. in FY24 to Rs.15.93 Cr. in FY25 and Rs.14.77 Cr. in 9M FY26.
The earnings profile has strengthened considerably, supported by operating leverage and lower credit costs in the current period. The company reported PPOP of Rs.3.39 Cr. in FY24, improving to Rs.5.73 Cr. in FY25 and Rs.6.33 Cr. in 9M FY26, while PAT increased from Rs.1.24 Cr. as on FY24 to Rs.2.55 Cr. as on FY25 and further to Rs.4.60 Cr. as on 9MFY26, indicating strong profitability momentum. The profitability in 9M FY26 has already surpassed full-year FY25 levels, reflecting improving operational efficiency and earnings sustainability.
Adequate Capital Base and Funding Access
The company maintains an adequate capital base, with net worth gradually increasing from Rs.61.80 Cr. in FY24 to Rs.64.35 Cr. in FY25 and Rs.68.96 Cr. as of 9M FY26. While capital adequacy has moderated due to growth, the CRAR remains comfortable at 45.18% as of 9M FY26 (down from 69.12% in FY24), providing a buffer to support current operations.
The funding profile is supported by the company’s ability to raise borrowings to fund growth, with total borrowings increasing from Rs.28.14 Cr. in FY24 to Rs.57.46 Cr. in FY25 and Rs.104.48 Cr. in 9M FY26. Fresh borrowings of Rs.35.38 Cr. in FY25 and Rs.47.02 Cr. in 9M FY26 reflect increasing lender confidence. Additionally, the cost of borrowings moderated to 8.47% in 9M FY26 (from 10.30% FY25), providing support to margins and overall financial performance.
Weakness
Moderation in Capitalization and Leverage
The company’s capitalisation profile has moderated in line with its rapid growth in the loan book, with CRAR declining from 69.12% in FY24 to 55.14% in FY25 and further to 45.18% as of 9M FY26. This reduction reflects the increased capital consumption owing to on-book portfolio expansion, without commensurate equity infusion in recent periods. While net worth has grown gradually from Rs.61.80 Cr. in FY24 to Rs.68.96 Cr. in 9M FY26, the pace remains moderate relative to the growth in assets.
The company’s leverage has increased significantly, with debt-to-equity rising from 0.46x in FY24 to 0.89x in FY25 and further to 1.56x in 9M FY26. This is driven by a sharp rise in borrowings from Rs.28.14 Cr. to Rs.104.48 Cr. over the same period, indicating higher dependence on external funding to sustain growth, which may exert pressure on the capital structure going forward.
Moderate Asset Quality Profile
Despite improvement, the company’s asset quality metrics remain moderate, with GNPA at 13.68% in FY25 and 10.75% in 9M FY26, and NNPA at 6.30% and 5.18%, respectively. While these levels have declined from FY24 (GNPA: 18.79%, NNPA: 11.39%), they continue to remain relatively elevated, indicating ongoing seasoning risks in the portfolio.
Further, the presence of residual stress in higher delinquency buckets, with 90+ dpd at 11.20% as of 9M FY26, highlights the need for continued monitoring of collections and recoveries. Although early-stage delinquencies have improved, the company’s ability to sustain asset quality improvements amid rapid business growth remains a key sensitivity.
Rating Sensitivity
Potential triggers (individual or collective) for an upward rating action:
Significant growth in AUM and disbursements.
Significant improvements in profitability metrics
Potential triggers (individual or collective) for a downward rating action:
Deterioration in asset quality metrics, collection efficiency
Debt to equity greater than 3.5 times.
Liquidity Position
Adequate
AICL maintains a well-matched liquidity profile as on March 31, 2025, with no negative cumulative mismatches across time buckets up to one year. This indicates prudent asset-liability management practices and reflects the company’s ability to meet its short-term obligations comfortably without relying on external funding. Further, the company reported cash and cash equivalents of Rs. 1.41 crore as on FY25. The overall liquidity position is further supported by steady internal accruals and disciplined working capital management which supports the company’s ongoing operations and growth initiatives.
Outlook - Stable
Other Factors affecting Rating
None.
Key Financials - Standalone / Originator
Particulars
Unit
FY25(Actual)
FY24(Actual)
Total Assets
Rs. Cr.
120.02
88.24
Total Income*
Rs. Cr.
16.24
13.02
PAT
Rs. Cr.
2.55
1.24
Net Worth
Rs. Cr.
64.35
61.80
Return on Average Assets (RoAA)
(%)
2.45
1.44
Return on Average Net Worth (RoNW)
(%)
4.04
2.02
Debt/Equity
Times
0.89
0.46
Gross NPA
(%)
13.68
18.79
Net NPA
(%)
6.30
11.39
*Total income equals to Net Interest Income plus other income
Status of non-cooperation with previous CRA (if applicable):
Note:- For activities or ratings of instruments falling under the purview of Financial Sector Regulators other than SEBI, the grievance / dispute redressal mechanisms and investor protection mechanisms provided by SEBI shall not be available.
Contacts
List of instruments and names of regulators of the instruments
