Press Release August 03, 2026 BHAGWATI LACTO FOODS PRIVATE LIMITED Rating Assigned and Upgraded

Product	Quantum (Rs. Cr) (SEBI)	Quantum (Rs. Cr) (Other FSR)	Long Term Rating	Short Term Rating	Regulated By
Bank Loan Ratings	0.00	10.00	ACUITE A- | Stable | Assigned	-	RBI
Bank Loan Ratings	0.00	65.00	ACUITE A- | Stable | Upgraded	-	RBI
Total Outstanding	0.00	75.00	-	-	-
Total Withdrawn	0.00	0.00	-	-	-

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

­­Acuite has upgraded its long-term rating to 'ACUITE A-' (read as ACUITE A minus) from 'ACUITE BBB' (read as ACUITE triple B) on the Rs.65.00 Cr. bank facilities of Bhagwati Lacto Foods Private Limited (BLFPL). The Outlook is 'Stable'. ­Acuite has assigned its long-term rating of 'ACUITE A-' (read as ACUITE A minus) on the Rs.10.00 Cr. bank facilities of Bhagwati Lacto Foods Private Limited (BLFPL). The Outlook is 'Stable'. Rationale for rating The rating reflects the significant improvement in the Bhagwati Group’s business risk profile, marked by strong growth in scale of operations and profitability. The group’s operating income increased by 34.56% to Rs. 3,373.78 Cr. in FY26 (prov.) from Rs. 2,507.21 Cr. in FY25, driven by higher sales volumes and the commencement of rice milling operations in Bhagwati Agrochem Private Limited (BAPL). The group’s operating margin also improved to 9.10% in FY26 (prov.) from 5.77% in FY25, supported by a favorable cost structure and operational efficiencies at its Madhya Pradesh facility. The upgrade further factors in the group’s moderate financial risk profile, characterized by a healthy net worth, moderate gearing, and adequate debt protection metrics, along with an adequate liquidity position supported by healthy cash accruals. Acuite also takes cognizance of the group's ongoing capex for the oil refinery and flour mill plant in BAPL, which are at an advanced stage of completion and are expected to strengthen revenue growth, profitability, and value-chain integration over the medium term. The rating continues to be constrained by the group’s intensive working capital requirements, as reflected in the increase in Gross Current Assets (GCA) days to 234 days as on March 31, 2026 (prov.) from 179 days as on March 31, 2025, primarily due to higher receivables arising from increased sales during the latter part of the fiscal year. The rating is also constrained by the group's exposure to agro-climatic risks and volatility in paddy prices, which can impact raw material availability, procurement costs, and profitability.

About the Company

­­Firozpur based Bhagwati Lacto Foods Private Limited was incorporated in 2009. The company is engaged in the processing of paddy to produce basmati rice. The company sells basmati rice under the brand names ‘GARIMAA’ and ‘KASTURRIKA’ in Punjab, Delhi, Haryana etc. Manufacturing Facilities located in Vill. Rukna Mungla, Faridkot Road, Ferozepur Distt, Punjab 152001. Mr. Rahul Mittal and Ms. Sanjana Mittal are the present directors of the company.

About the Group

­­Bhagwati Agrochem Private Limited  Madhya Pradesh based Bhagwati Agrochem Private Limited is a private limited company incorporated in 2021 with an objective to carry on the business of food processing, rice shelling, wheat flour, solvent extraction and oil refinery. Bhagwati Agrochem Private Limited is a group company of established Bhagwati Group of Punjab, who is already in the business of food processing industry for the last three decades. Mr. Sushil Mittal and Mr. Sameer Mittal are the present directors of the company. Bhagwati Industrial Group Limited (Erstwhile Bhagwati Lacto Vegetarian Exports Private Limited) Punjab based Bhagwati Industrial Group Limited (Erstwhile Bhagwati Lacto Vegetarian Exports Private Limited) is Incorporated in 2007, engaged in the processing of paddy since FY08. The company operates at its single manufacturing facility in Ferozepur, Punjab with an installed capacity of 55TPH (tonnes per hour). The company is primarily engaged in the export of Basmati rice to the Middle East, Canada, Australia, etc. Healthy Harvested Foods Private Limited  Gujarat based Healthy Harvested Foods Private Limited was incorporated in 2020. The company is engaged in the grading, sorting and storage of rice. Prior to this it was engaged in trading of rice in FY22 since the commencement of its commercial operations in Q1FY24. The unit of the company is in close proximity to Kandla and Mundra port, Gujarat. Ms. Sushil Mittal and Mr. Sameer Mittal are the present directors of the company. SRSK Warehousing Private Limited Kachchh, Bhuj based SRSK Warehousing Private Limited is incorporated in 2023. The company is setting up business of Warehousing & Storage of food grains with reprocessing of semi-finished rice to produce export-worthy basmati rice etc. Ms. Sanjana Mittal and Mr. Rahul Mittal are the present directors of the company.

Unsupported Rating

­Not Applicable

Analytical Approach

Extent of Consolidation

•Full Consolidation

Rationale for Consolidation or Parent / Group / Govt. Support

­Acuite has considered consolidated business and financial risk profile of Bhagwati Lacto Foods Private Limited, Bhagwati Industrial Group Limited (Erstwhile ­Bhagwati Lacto Vegetarian Exports Private Limited), Healthy Harvested Foods Private Limited, Bhagwati Agrochem Private Limited and SRSK Warehousing Private Limited collectively referred to as a Bhagwati Group. The consolidation is mainly due to common management, same line of business and strong operational & financial linkages.

Key Rating Drivers

Strengths

­­Experienced Management and established track record of Bhagwati Group Bhagwati group was established in 1991 with a partnership firm namely M/s Bhagwati Rice Mills at Ferozepur, Punjab. Later, during the year 2007, after the opening of export market for Basmati Rice Bhagwati group had set up a new Modern Rice Mill In the name of Bhagwati Lacto Vegetarian Exports Private Limited (BLVEPL). The promoters of the group have vast experience in the food processing industry and along with that the group also has well established network of customers and suppliers. The group mainly manufactures for private labels, however some of revenue is generated from own brand such as Garimaa, Shah Mahal, Shah Begum, Ruhab and Kasturrika. Their experience has enabled the group in domestic market as well as healthy relationships with international market. Improvement in scale of operations The Bhagwati Group's operating income improved significantly by 34.56%, increasing from Rs. 2,507.21 Cr. in FY25 to Rs. 3,373.78 Cr. in FY26 (prov.). The growth in scale of operations was primarily driven by higher sales volumes across the group's businesses and the commencement of rice milling operations in Bhagwati Agrochem Private Limited (BAPL) from April 2025, which contributed meaningfully to the group's revenues. The group's operating profitability also strengthened, with the EBITDA margin improving to 9.10% in FY26 (prov.) from 5.77% in FY25. The improvement was mainly supported by the favorable cost structure of the Madhya Pradesh operations, characterized by lower procurement costs, reduced mandi-level statutory levies and lower labour costs compared to Punjab, resulting in enhanced operational efficiencies. Consequently, the group's PAT margin improved to 3.08% in FY2026 (Prov.) from 2.22% in FY2025. Acuite believes that the group's profitability is likely to remain at healthy levels over the medium term, supported by the stabilization of newly commissioned capacities, operational efficiencies from the rice milling business, and the expected commencement of the solvent extraction, refinery, and warehousing projects. Moderate financial risk profile The group's financial risk profile is marked by a healthy net worth, moderate capital structure, and adequate debt protection metrics. The tangible net worth improved to Rs. 678.70 Cr. as on March 31, 2026 (prov.) from Rs. 540.29 Cr. as on March 31, 2025, supported by the accretion of profits to reserves and infusion of funds by the promoters. The gearing level moderated and stood at 2.08 times as on March 31, 2026 (Prov.), compared to 1.83 times as on March 31, 2025, while the TOL/TNW increased to 3.27 times from 2.58 times over the same period. The moderation in capital structure was primarily on account of debt-funded capex undertaken by Bhagwati Agrochem Private Limited for setting up an integrated food processing facility in Madhya Pradesh and by SRSK Warehousing Private Limited for establishing rice reprocessing and warehousing facilities in Bhuj, Gujarat. Despite the ongoing expansion, the group's debt protection metrics remained adequate, with an ISCR of 2.95 times and DSCR of 2.46 times in FY26 (prov.). Acuite believes that the group's financial risk profile is expected to remain comfortable over the medium term, supported by healthy accrual generation, expected stabilization of the newly commissioned capacities, and gradual improvement in debt protection metrics upon commencement of full-scale operations of the ongoing projects.

Weaknesses

­­­­Intensive Working capital operations The group's working capital operations remain intensive, as reflected in the Gross Current Assets (GCA) days of 234 days as on March 31, 2026 (prov.), compared to 179 days as on March 31, 2025. The elongation in the working capital cycle was primarily driven by a significant increase in receivables, with debtor days rising to 138 days in FY26 (prov.) from 78 days in FY2025, largely on account of higher sales recorded during Q4 FY2026, resulting in elevated year-end receivables. Inventory levels remained relatively stable, with inventory days improving to 91 days in FY26 (prov.) from 97 days in FY25, while creditor days increased to 84 days from 49 days over the same period. Acuite believes that the group's working capital operations are likely to remain intensive over the medium term, given the nature and scale of its business operations; however, timely realization of receivables and efficient management of working capital will remain key monitorable. Exposure to agro-climatic and inventory risks The group's operations remain exposed to agro-climatic risks as paddy and pricing are significantly influenced by monsoon conditions. Further, the requirement to maintain substantial inventory levels for the basmati rice business exposes the group to inventory holding and price fluctuation risks.

ESG Factors Relevant for Rating

­­­T­he group is driven by the ambition to be a comprehensive ingredient provider across the entire food chain aspiring to lead in the industry. They recognizes that addressing environmental, social, and governance risks is vital for business sustainability. They are founded on principles of kindness, fairness, effectiveness, and efficiency. The group s respect for human rights as a core value and is committed to ensuring that our actions benefit the environment, society and nation. They are committed to continuously improving our ESG performance and are setting new targets for the future.

Rating Sensitivities

Potential triggers (individual or collective) for an upward rating action:

­Sustained growth in operating income by more than 40 percent, along with stable improvement in profitability margins. Improvement in capital structure, supported by lower reliance on external debt and better gearing levels. Successful stabilisation of solvent extraction plant being undertaken in Bhagwati Agrochem Pvt Ltd.

Potential triggers (individual or collective) for a downward rating action:

­Any large debt-funded capital expenditure adversely impacting the group's financial risk profile and liquidity position. Delays in the timely completion and stabilization of the ongoing capex projects. Decline in revenue by 20-25 percent, or any steep deterioration in profitability margins. Further elongation in the working capital cycle, leading to higher reliance on working capital borrowings.

Liquidity Position

Adequate

­The group's liquidity position is adequate, supported by healthy cash accruals and sufficient liquidity buffers. The group generated net cash accruals of Rs. 181.26 Cr. in FY26 (prov.) against debt repayment obligations of Rs. 11.41 Cr. during the same period and in FY27, the company is expected to generate net cash accruals in the range of Rs. 150-200 Cr. against the debt obligations of Rs. 45.64 Cr. for the same period. Further, the group's current ratio stood at 1.34 times as on March 31, 2026 (Prov.), while its cash and bank balances stood at Rs. 78.82 Cr. The average utilization of the group's fund-based working capital limits remained high at 89.57% during the six-month period ending May 2026. Acuite believes that the group's liquidity position is likely to remain adequate over the medium term, supported by healthy cash accrual generation and expected ramp-up in operations from the ongoing debt-funded capex projects.

Outlook: Stable

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Other Factors affecting Rating

­None

Key Financials

Particulars	Unit	FY 26 (Provisional)	FY 25 (Actual)
Operating Income	Rs. Cr.	3373.78	2507.21
PAT	Rs. Cr.	103.77	55.66
PAT Margin	(%)	3.08	2.22
Total Debt/Tangible Net Worth	Times	2.08	1.83
PBDIT/Interest	Times	2.95	2.64

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

­Not Applicable

Any Other Information

­None

Applicable Criteria

• Application Of Financial Ratios And Adjustments: https://www.acuite.in/view-rating-criteria-53.htm • Consolidation Of Companies: https://www.acuite.in/view-rating-criteria-60.htm • Default Recognition: https://www.acuite.in/view-rating-criteria-52.htm • Manufacturing Entities: https://www.acuite.in/view-rating-criteria-59.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

Date Name of Instruments/Facilities Term Amount (Rs. Cr) Rating/Outlook 03 Jul 2025 Cash Credit Long Term 15.00 ACUITE BBB | Stable (Reaffirmed) Cash Credit Long Term 32.25 ACUITE BBB | Stable (Reaffirmed) Term Loan Long Term 2.48 ACUITE BBB | Stable (Reaffirmed) Cash Credit Long Term 15.00 ACUITE BBB | Stable (Reaffirmed) Proposed Long Term Bank Facility Long Term 0.27 ACUITE BBB | Stable (Reaffirmed) 05 Jun 2025 Cash Credit Long Term 15.00 ACUITE BBB | Stable (Assigned) Proposed Long Term Bank Facility Long Term 0.27 ACUITE BBB | Stable (Assigned) Cash Credit Long Term 32.25 ACUITE BBB | Stable (Assigned) Term Loan Long Term 2.48 ACUITE BBB | Stable (Assigned) Cash Credit Long Term 15.00 ACUITE BBB | Stable (Assigned)

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*Annexure 2 - List of Entities (applicable for Consolidation or Parent / Group / Govt. Support)

­­­­ Sr. No. Company name 1 Bhagwati Lacto Foods Private Limited 2 Bhagwati Agrochem Private Limited 3 Bhagwati Industrial Group Limited (Erstwhile Bhagwati Lacto Vegetarian Exports Private Limited) 4 Healthy Harvested Foods Private Limited 5 SRSK Warehousing Private Limited

Contacts

Mohit Jain Chief Analytical Officer - Rating Operations Siddharth Garg Associate Analyst - Rating Operations	Contact details exclusively for investors and lenders Mob: +91 8591310146 Email ID: analyticalsupport@acuite.in

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