| Experienced management and established relationship with customers
Established in 2011, the company has been operational for a decade. The key promoters, Mr. Sunil Garg & Mr. Mohit Agarwal have more than 2 decades of experience in the business. The long standing experience of the promoters and long track record of operations has helped them to establish comfortable relationships with key suppliers and reputed customers across the continents. The company exports tea to several countries, including Kazakhstan, Russia, the UAE, China, Iran, Saudi Arabia, and Germany. In the domestic market, it supplies tea to customers across regions such as Gujarat and Kolkata.Acuité derives comfort from the long experience of the management and believes this will benefit the company going forward, resulting in steady growth in the scale of operations.
Marginal moderation in Scale of operation albeit slight improvement in operating profitability:
The company's revenue declined marginally to Rs. 270.55 crore in FY26 from Rs. 281.12 crore in FY25, primarily due to lower demand in international markets and a decline in realizations. The export segment continued to be the major revenue contributor, accounting for around 79% of total revenue in FY26, while the domestic market contributed the remaining 21%, compared to a contribution of 93% and 7%, respectively, in FY25. This indicates the company's gradual diversification towards the domestic market, partially mitigating the impact of subdued demand in export markets. During 5MFY27, the company recorded a total operating Income of Rs. 121.50 crore as against Rs.141.78 crores in 5MFY26 and had an outstanding order book of approximately Rs. 90-95 crore as of August 2026, providing moderate revenue visibility for the near term. Performance has remained subdued due to increased logistics costs, resulting in delays in order deliveries. Although there is dip in revenue in 5MFY27; however realization has been improved. Despite the decline in revenue in FY26, the company's operating profitability remained largely steady, with the OPBDIT margin increasing to 3.94% in FY26 from 3.76% in FY25. The improvement was largely supported by higher foreign exchange gains, which increased to Rs. 7.64 crore in FY26 from Rs. 4.62 crore in FY25. Consequently, the company's profitability profile remained stable, with the PAT margin at 0.83% in FY26, broadly in line with 0.84% in FY25. However, the company does not have a formal hedging policy in place and therefore remains exposed to foreign exchange fluctuation risk.
|
| Average financial risk profile:
The financial risk profile of the Company marked average by modest net worth, improved gearing and average coverage indicators in FY 26. Total tangible net worth stood at Rs. 48.45 crore in FY 26 as compared to Rs.46.17 crore in FY 25 driven by accretions to reserves. Gearing has been improved to 1.56 times in FY 26 from 1.73 times in FY 26. Debt protection metrics stood average with Interest coverage ratio and Debt service coverage ratio stood at 1.45 times and 1.11 times in FY 26 as compared to 1.50 times and 0.89 times in FY 25. TOL/TNW and Debt/EBITDA stood at 2.09 times and 6.70 times in FY 26 as against 2.08 times and 7.27 times in FY 25. Acuite believes that financial risk profile is expected to remain average in the medium term.
Intensive Working Capital cycle:
The working capital cycle remains intensive of ATCPL marked by gross current asset days increased to 190 days in FY 26 from 172 days in FY 25 driven by increase in inventory days. Inventory days increased to 39 days in FY 26 from 22 days in FY 25 in line with their average inventory days of 40-45 days. Debtor days stood at 117 days in FY 26 as against 118 days in FY 25 , average collection cycle stood at 100-120 days. Other current assets marginally increased to Rs. 26.02 crore in FY 26 from Rs.25.27 crore in FY 25 which majorly includes Fixed Deposit-Lien marked(maturity upto 12 months) and advance to suppliers. Creditor days stood at 33 days in FY 26 as against 21 days in FY 25, and the average credit period with suppliers stood at 45 days. Acuite believes working capital management will remain intensive due to nature of their operation.
|
