Press Release

Press Release

March 05, 2026

ARIHANT SYNCOTEX MILLS PRIVATE LIMITED
Rating Assigned

Product	Quantum (Rs. Cr)	Long Term Rating	Short Term Rating
Bank Loan Ratings	54.00	ACUITE BB \| Stable \| Assigned	-
Total Outstanding	54.00	-	-
Total Withdrawn	0.00	-	-

Rating Rationale

Acuité has assigned its long-term rating of ‘ACUITE BB’ (read as ACUITE double B) on the Rs.54.00 Cr. bank facilities of Arihant Syncotex Mills Private Limited (ASMPL). The outlook is 'Stable'.

Rationale for Rating
The rating assigned factors in the average financial risk profile and stretched liquidity position reflected in the fully utilised working capital limits. The rating is further constrained on account of working capital-intensive operations, susceptibility of profitability to volatility in raw material prices in an intensely competitive and fragmented textile industry. The rating is supported by the extensive experience of promoters and established operational track record, and company’s modest scale of operations albeit subdued profitability.

About the Company

Pune based Arihant Syncotex Mills Private Limited (ASMPL) was incorporated in the year 2008. The company is engaged in the manufacturing of grey fabric. The company outsources some of the processes from its group entities on job work basis. Present directors of the company are Mr. Vivekkumar Manakchand Lalwani, Mr. Manakchand Vardichand Lalwani, Mr. Arunkumar Manakchand Lalwani, Ms. Kavita Arunkumar Lalwani, Ms. Sushiladevi Manakchand Lalwani and Ms. Dimple Vivekkumar Lalwani.

Unsupported Rating

Not Applicable

Analytical Approach

Acuité has considered the standalone business and financial risk profiles of Arihant Syncotex Mills Private Limited (ASMPL).

Key Rating Drivers

Strengths

Experienced management and established track record
Arihant Syncotex Mills Private Limited (ASMPL) is engaged in the manufacturing and marketing of grey fabrics. The promoters have over five decades of experience in the fabric manufacturing and marketing business. Over the years, the company has established a network comprising its own units, sister concerns, and external clients for fabric production. Acuite believes that the extensive experience of the promoters will help the company to procure and execute more and better orders.

Moderate Operating Performance
The revenue of the company stood at Rs.230.93 crore in FY2025 as against Rs.190.66 crore in FY2024 and Rs.216.18 crore in FY2023. The volatility in the operating performance is on the account of fluctuations in the demand and increase in overall competition. Furthermore, the company has clocked a revenue of Rs. 160 crore in 9MFY26 and are targeting to close the year in the range of Rs.200- Rs.225 crore in FY2026. Additionally, the revenue is expected to be slowdown/moderated in near to medium terms.
The EBITDA margin of the company has shown a consistent decline in last 3 years and is expected to further show moderation in near to medium terms on account of consistent increase in employee cost, volatility in raw material prices. The EBITDA margin stood at 3.75 per cent in FY2025 as against 3.85 per cent in FY2024 and 6.02 per cent in FY2023, however the PAT margins have improved gradually and stood at 2.08 per cent in FY2025 as against 1.76 per cent in FY2024 and 1.62 per cent in FY2023.
Acuite believes that the operating performance of the company is going to remain in similar range in near to medium terms on account of fluctuation in demand and volatility in raw material prices.

Weaknesses

Moderately intensive working capital operations
ASMPL’s working capital cycle is intensive in nature marked by high gross current assets (GCA) days of 189 days in FY2025 as against 183 days in FY2024. The debtor days of the company stood at 127 days in FY2025 as against 116 days in FY2024. Further, the inventory days stood at 25 days in FY2025 as against 21 days in FY2024. ASMPL sources yarn from both local and outstation spinning mills. Further the total debtors as on October 31, 2025 stands Rs.87.41 crore as against Rs.80.59 Cr. as on March 31, 2025. The fund-based bank limit utilisation stands very high at ~99 percent for 6 months ended December 2025.
Acuite believes that the operations of the company will remain working capital intensive considering the nature of business.

Average financial risk profile
The financial risk profile of the company is average marked by moderate net worth, average gearing levels and moderate debt protection metrics. The net worth of the company improved to Rs.32.90 crore in FY2025 as against Rs.28.10 crore in FY2024 due to accretion of profits into reserves. The total debt of the company increased to Rs.67.63 crore in FY2025 as against Rs.57.98 crore in FY2024, which includes Rs.0.89 crore of long-term debt, Rs.15.24 crore of USL from directors and promoters, Rs.49.75 crore of short-term debt and Rs.1.76 crore of CPLTD. The debt-equity ratio stood high at 2.06 times as on March 31, 2025 and March 31, 2024. TOL/TNW (Total outside liabilities/Total net worth) stood at 2.80 times as on 31 March, 2025 as against 2.56 times in previous year. Further, the Debt/EBITDA of the company stood high at 6.51 times as on March 31, 2025 as against 5.71 times as on March 31,2024. The debt protection metrics of the company is moderated with the interest coverage ratio (ICR) and debt service coverage ratio (DSCR) of 2.99 times and 1.31 times respectively in FY2025 as against 1.98 and 1.05 times respectively in FY2024. The NCA/TD stood at 0.08 times in FY2025. Acuite believes that the financial risk profile of the company will improve steadily in near to medium terms owing to no major debt funded capex plans.

Susceptibility of profitability to volatility in raw material prices in an intensely competitive and fragmented textile industry
ASMPL's key raw material, cotton is a highly seasonal commodity and good quality cotton is available only during the peak cotton season i.e. October to March. Operating margins in textile companies are susceptible to changes in cotton prices, which are highly volatile The company operates in a highly competitive industry and region, with numerous organised and unorganised players, which keeps its margins under pressure and limits its bargaining power.

Rating Sensitivities

Significant improvement in scale of operations while improving profitability
Improvement in working capital cycle thereby reducing reliance on working capital borrowings
Deterioration in financial risk profile owing to debt funded capex leading to lower-than-expected coverage indicators.

Liquidity Position

Stretched

The company has a stretched liquidity on account of higher reliance on the working capital limits which are almost fully utilised. However, ASMPL has sufficient net cash accruals as against maturing debt obligation. The net cash accruals of the company stood at Rs.5.25 crore in FY2025 as against Rs.3.16 crore of maturing debt obligation during the same period. Further the net cash accruals of the company are expected to be in the range of Rs.4.80 – 5.00 crore against the maturing debt obligation in the range of Rs.0.80 – 1.80 crore. The current ratio of the company stood at 1.59 times in FY2025, the unencumbered cash and bank balance stood at Rs.0.30 crore. The company has a high reliance on their fund-based bank facility with high limit utilisation of more than 99 percent for 6 months ended December 2025.

Outlook: Stable

Other Factors affecting Rating

None

Key Financials

Particulars	Unit	FY 25 (Actual)	FY 24 (Actual)
Operating Income	Rs. Cr.	230.93	190.66
PAT	Rs. Cr.	4.80	3.36
PAT Margin	(%)	2.08	1.76
Total Debt/Tangible Net Worth	Times	2.06	2.06
PBDIT/Interest	Times	2.99	1.98

Status of non-cooperation with previous CRA (if applicable)

CRISIL, vide its press release dated April 11th, 2025 had denoted the rating of Arihant Syncotex Mills Private Limited (ASMPL) as 'CRISIL B/Stable; DOWNGRADED AND ISSUER NOT CO-OPERATING.
BWR, vide its press release dated May 20th, 2025 had denoted the rating of Arihant Syncotex Mills Private Limited (ASMPL) as 'BWR C; DOWNGRADED AND ISSUER NOT CO-OPERATING.
IND - RA, vide its press release dated July 18th, 2025 had denoted the rating of Arihant Syncotex Mills Private Limited (ASMPL) as 'IND - RA B+/Negative/A4; DOWNGRADED AND ISSUER NOT CO-OPERATING.

Any other information

None

Applicable Criteria

• Default Recognition :- https://www.acuite.in/view-rating-criteria-52.htm
• Manufacturing Entities: https://www.acuite.in/view-rating-criteria-59.htm
• Application Of Financial Ratios And Adjustments: https://www.acuite.in/view-rating-criteria-53.htm

Note on complexity levels of the rated instrument

In order to inform the investors about complexity of instruments, Acuité has categorized such instruments in three levels: Simple, Complex and Highly Complex. Acuite’s categorisation of the instruments across the three categories is based on factors like variability of the returns to the investors, uncertainty in cash flow patterns, number of counterparties and general understanding of the instrument by the market. It has to be understood that complexity is different from credit risk and even an instrument categorized as 'Simple' can carry high levels of risk. For more details, please refer Rating Criteria “Complexity Level Of Financial Instruments” on www.acuite.in.

Rating History :

Not Applicable

Annexure - Details of instruments rated

Lender’s Name	ISIN	Facilities	Date Of Issuance	Coupon Rate	Maturity Date	Quantum (Rs. Cr.)	Complexity Level	Rating
Indian Bank	Not avl. / Not appl.	Cash Credit	Not avl. / Not appl.	Not avl. / Not appl.	Not avl. / Not appl.	50.00	Simple	ACUITE BB \| Stable \| Assigned
Indian Bank	Not avl. / Not appl.	Covid Emergency Line.	05 Jan 2022	Not avl. / Not appl.	15 Dec 2026	1.79	Simple	ACUITE BB \| Stable \| Assigned
Not Applicable	Not avl. / Not appl.	Proposed Long Term Bank Facility	Not avl. / Not appl.	Not avl. / Not appl.	Not avl. / Not appl.	2.21	Simple	ACUITE BB \| Stable \| Assigned

Contacts

Mohit Jain
Chief Analytical Officer - Rating Operations

Akshat Shah
Associate Analyst - Rating Operations

Contact details exclusively for investors and lenders

Mob: +91 8591310146
Email ID: analyticalsupport@acuite.in

About Acuité Ratings & Research

Acuité is a full-service Credit Rating Agency registered with the Securities & Exchange Board of India (SEBI). The company received RBI Accreditation as an External Credit Assessment Institution (ECAI) for Bank Loan Ratings under BASEL-II norms in the year 2012. Acuité has assigned ratings to various securities, debt instruments and bank facilities of entities spread across the country and across a wide cross section of industries. It has its Registered and Head Office in Kanjurmarg, Mumbai.

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