Press Release

Experienced management and established presence in the industry
DTSL has an operational track record of over a decade in furnishing industry. It is promoted by Mr. Lalit Suthar and Mr. Shravan Laxmichand Suthar who possess over a decade of experience in this industry. They are supported by their team of experienced professionals in managing day to day operations of DTSL. The extensive experience of the promoter has enabled DTSL to establish a healthy relationship with its customers and suppliers. Acuité believes that DTSL will continue to benefit from its experienced management and established track record of operations.

Sustained growth in revenues while maintaining healthy profitability
The operating revenue of the company grew by approximately 50.58 per cent to Rs. 184.55 crore in FY26 from Rs. 122.56 crore in FY25 and Rs. 90.76 crore in FY24, driven by better realizations and an increase in overall sales volume. The EBITDA of the company stood at Rs. 24.57 crore in FY26 as against Rs. 14.00 crore in FY25. The operating profit margin remained range-bound at 13.31 per cent in FY26 as compared to 11.42 per cent in FY25 and 12.16 per cent in FY24. The improvement in EBITDA was supported by better product price realizations, particularly in high-margin categories, and higher foreign exchange gains, which contributed to overall profitability. The PAT margin improved to 6.85 per cent in FY26 from 6.12 per cent in FY25. Further, in Q1FY26, the company reported revenue of Rs. 58.93 crore as compared to Rs. 29.59 crore in Q1FY25. The EBITDA and PAT margins stood at 9.60 per cent and 4.67 per cent, respectively, in Q1 FY26 as compared to 11.55 per cent and 4.25 per cent respectively in Q1 FY25. Acuite believes that the company will sustain healthy revenue growth and profitability over the medium term, supported by improved sales volumes and better realizations.

Above-average financial risk profile marked by improving net worth, low gearing and healthy debt protection metrics
DTSL has an above-average financial risk profile, marked by a moderate but improving net worth, low gearing, and healthy debt protection metrics. The company’s net worth improved and stood at Rs. 116.51 crore as on March 31, 2026, as against Rs. 57.66 crore as on March 31, 2025, and Rs. 21.61 crore as on March 31, 2024. Post IPO, in FY26, the company completed a rights issue, resulting in an increase in share capital by Rs. 12.30 crore and securities premium by Rs. 36.91 crore. In Q1FY27, the company has raised new warrants of Rs. 49 crore, out of which 25% (12.5 Cr) has been received upfront and rest 75 per cent will be received exercise/conversion of the warrant into equity share, which would take place in FY28. The company’s gearing stood at 0.35 times as on March 31, 2026, as against 0.79 times as on March 31, 2025. The total debt stood at Rs. 40.40 crore as on March 31, 2026, compared to Rs. 45.84 crore as on March 31, 2025. The total debt comprised long-term debt of Rs. 4.13 crore, unsecured loans of Rs. 0.73 crore, short-term debt of Rs. 29.39 crore, and current maturities of long-term debt (CPLTD) of Rs. 6.15 crore. Debt/EBITDA improved to 1.65 times as on March 31, 2026, from 2.84 times as on March 31, 2025. TOL/TNW improved to 0.51 times as on March 31, 2026, as against 0.99 times as on March 31, 2025. Further, the debt protection metrics remained healthy, with the interest coverage ratio (ICR) improving to 5.41 times in FY26 from 4.32 times in FY25, while the debt service coverage ratio (DSCR) improved to 2.38 times in FY26 from 2.03 times in FY25.

Acuite believes that the financial risk profile of the company will continue to improve over the medium term, supported by steady accruals, equity infusion and absence of major debt funded capex.

Working capital-intensive operations
DTSL’s operations remained working capital intensive, with gross current assets (GCA) of 282 days in FY26 as against 270 days in FY25. Inventory days stood at 96 days in FY26 as compared to 168 days in FY25. The improvement in the inventory cycle reflects better inventory management and faster inventory turnover. However, the company offers a wide variety of colours, sizes, textures, and finishes to meet customer preferences and design requirements. Consequently, maintaining adequate stock across multiple SKUs results in relatively high inventory levels. Debtor days stood at 127 days in FY26 as against 104 days in FY25. The increase was primarily on account of higher sales booked during Q4 FY26. The company generally extends a credit period of up to 90 days to its customers. Creditor days stood at 23 days in FY26 as against 31 days in FY25, with company resorting to advance payments to suppliers for better margins. Further, the reliance on fund based and non-fund-based limits remained high at 96.56 per cent and 79.84 per cent, respectively, for the six-month period ended June 2026. Acuite believes that the working capital operations of the company are likely to remain intensive over the medium term, given the nature of the industry and high inventory holding requirements.

Susceptibility of profitability to volatility in raw material prices and forex risk in an highly competitive and fragmented industry
The company’s profitability remains vulnerable to fluctuations in raw material prices, as raw material costs account for ~ 75 per cent of total sales. Additionally, with exports contributing around 11 per cent to total sales while imports are ~5 per cent, the company is exposed to foreign exchange risk while nature hedging is available to an extent. In the absence of any hedging mechanisms, it remains susceptible to forex volatility, which can impact both revenue and profitability. Further, the highly competitive and fragmented nature of the industry limits pricing flexibility and may exert pressure on the company’s profitability.

Customer & supplier concentration risk
The company exhibits high supplier concentration, with the top 3 vendors contributing ~54 per cent of total purchases, and high customer concentration, with the; top 3 customers accounting for ~49 per cent of sales. While this reflects strong relationships and operational efficiency, it also exposes the company to potential disruption risks. However, the presence of suppliers and reputed credit-rated customers helps mitigate counterparty and continuity risks.