­Long standing experience of the promoters in the industry
The directors of BSL are Mr. Mahesh Kumar Agarwal, Mr. Deepak Kumar Agarwal, and Mr. Sharad Kumar Agarwal. Mr. Mahesh Kumar Agarwal, who has worked in the industry for over three decades, is in charge of overall management and strategic decision-making. As a result of its long-standing presence in the textile sector and its presence in the Bhilwara textile cluster, the company has developed strong ties with its customers and suppliers, as indicated by its position in a highly competitive market. 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.

Location advantage and entitlement to various incentives from the state government.
The units of the company are located at Bhilwara (Rajasthan) which is one of the largest textile clusters in India. BSPL’s presence in the textile manufacturing region results in benefits derived from low transportation and storage cost as well as easy availability of large number of customer base. The textile projects in India are incentivized by schemes launched by the central government and state governments.

Moderate financial risk profile
The financial risk profile of the company remained moderate, marked by a moderate net worth, average gearing, and average debt protection metrics. The tangible net worth stood at Rs. 105.57 crore in FY25 (Prov.) as against Rs. 69.85 crore in FY24. The increase in net worth is on account of profit accretion to reserves. The net worth also includes Rs. 28.26 crore of USL, which is subordinated to bank debt and will remain infused in the business for the duration of the bank facilities. The total debt of the company stood at Rs. 198.36 crore in FY25 (Prov.), comprising long-term debt of Rs. 129.86 crore, short-term debt of Rs. 43.29 crore, and maturing debt repayment obligations of Rs. 25.20 crore. The capital structure is average, with gearing (Debt to Equity) at 1.88 times in FY25 (Prov.) compared to 3.28 times in FY24. Furthermore, coverage indicators are comfortable, as reflected in the Interest Coverage Ratio (ICR) of 2.05 times in FY25 (Prov.) as against 4.21 times in FY24, and debt service coverage ratio (DSCR) of 1.13 times in FY25 (Prov.) compared to 1.54 times in FY24. Acuite believes that the financial risk profile of the company is expected to remain moderate due to the absence of major debt-funded capex and steady net cash accruals.

Decline in the profitability margins, albeit improvement in revenues
BSL recorded an operating income of Rs. 315.47 crore in FY25 (Prov.) compared to Rs. 144.83 crore in FY24. The growth was on account of full year of operations of added capacity which enabled the production of cotton yarn in addition to synthetic yarn. However, the EBITDA margins declined to 13.32 per cent in FY25 (Prov.) from 23.20 per cent in FY24 due to higher raw material costs incurred. The PAT margins also fell to 2.36 per cent in FY25 (Prov.) from 6.66 per cent in FY24 on account of increase in finance costs, which stood at Rs. 21.00 crore in FY25 (Prov.) compared to Rs. 8.20 crore in the previous year. The company achieved a turnover of Rs. 81.16 crore in Q1FY26. Acuite believes, the operating performance of the company would improve steadily in near to medium term on account of stabilisation of cost with improved capacity utilisation.

Moderately intensive working capital operations
The working capital operations of the company remained moderately intensive, as reflected by GCA days of 139 days as on 31st March 2025 (Prov.) compared to 247 days as on 31st March 2024. The improvement in GCA days is primarily due to lower inventory days compared to previous years. Further, inventory days stood at 98 days in FY25 (Prov.) against 222 days in FY24. Meanwhile, debtor days stood at 27 days in FY25 (Prov.) compared to 10 days in FY24. The average credit period allowed to customers is around 45 days. On the other hand, creditor days stood at 11 days in FY25 (Prov.), with the average credit period allowed by suppliers being around 10 days. The average utilisation of working capital facilities stood at approximately 40.96 per cent for the six months ended March 2025. Acuite believes that the working capital operations of the company will remain moderately intensive over the near to medium term. 

Susceptibility of operating margins to volatility in raw material prices
Polyester, viscose and cotton are the company's main raw materials. Since these raw materials are either derivatives of crude oil or agriculture-based product, their prices are highly volatile, and that they are constantly influenced by changes in crude oil prices as well as other factors such as government policies and agro climatic conditions. Acuité believes that BSL’s EBITDA margins would remain susceptible to raw material price volatility and high inventory holding levels over the medium term.