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
Acuité has reaffirmed the long-term rating of ‘ACUITE BBB-’ (read as ACUITE triple B minus) and the short-term rating of ‘ACUITE A3’ (read as ACUITE A three) on the Rs.90.00 Cr. bank facilities of Eastern Polycraft Industries Limited (EPIL). The outlook remains ‘Stable’.
Further, Acuité has assigned the long-term rating of ‘ACUITE BBB-’ (read as ACUITE triple B minus) and the short-term rating of ‘ACUITE A3’ (read as ACUITE A three) on the Rs.9.47 Cr. bank facilities of Eastern Polycraft Industries Limited (EPIL). The outlook is ‘Stable’.
Rationale for rating The rating reaffirmation considers stable operating performance supported by commencement of the new manufacturing facility in FY2026. The rating also draws support from experienced management, long operational track record and moderate financial risk profile. However, the rating remains constrained by the working capital-intensive nature of operations and susceptibility of profitability to volatility in raw material prices, forex risk in an intensely competitive industry.
About the Company
Incorporated in 1997, Eastern Polycraft Industries Limited (EPIL) is engaged in manufacturing of plastic moulded container products through injection & blow moulding which are primarily used in the lubricants, edible oil, paint and fertilizer industry. The company is managed by Mr. K. C. Padia, Mr. Vijay Padia and Mr. Ajay Padia. EPIL has four units, two in West Bengal (Bhadreswar and Uluberia) and two in Rajasthan (Bhiwadi).
Unsupported Rating
Not Applicable
Analytical Approach
Acuité has taken a standalone view of the business and financial risk profile of EPIL to arrive at the rating.
Key Rating Drivers
Strengths
Experienced management and long operational track record EPIL is managed by Mr. K. C. Padia, Mr. Vijay Padia and Mr. Ajay Padia who possesses an experience of more than four decades in the industry. The company has a long track record of operations of over two decades and has established healthy relationships with the reputed PSUs and client. Acuite believes, the company would benefit from its established operational track record and experienced management to maintain long standing relationship with reputed clientele. Stable operating performance The revenues of the company improved and stood at Rs.216.15 Cr. in FY2026 (prov.) from Rs.195.07 Cr. in FY2025. The improvement is due to commissioning of a new manufacturing facility at Kharagpur (the manufacturing unit started its operations in August FY25) The operating margin improved to 11.62 per cent in FY2026 (prov.) from 9.82 per cent in FY2025. The improvement is due to decline in the raw material costs, selling expenses and other manufacturing costs. The PAT margin stood at 2.07 per cent in FY2026 (prov.) as against 1.76 per cent in FY2025. Acuité believes that the operating performance of the company would improve steadily on the back of enhanced capacities.
Weaknesses
Moderate financial risk profile The company’s financial risk profile is moderate marked by modest net worth, gearing and comfortable debt protection metrics. The tangible net worth of the company increased to Rs.45.64 Cr. as on 31st March 2026 (prov.) from Rs.41.17 Cr. as on 31st March 2025. The improvement in tangible net worth is on account of accretion of profits. Gearing of the company improved to 1.62 times as on 31st March 2026 (prov.) from 1.86 times as on 31st March 2025. The Total outside Liabilities/Tangible Net Worth (TOL/TNW) stood at 2.94 times as on 31st March 2026 (prov.) as compared to 3.05 times as on 31st March 2025. However, the debt protection metrics of the company remained comfortable marked by Interest Coverage Ratio (ICR) and Debt Service Coverage Ratio (DSCR) stood at 2.14 times and 1.36 times as on 31st March 2026 (prov.) as compared to 2.15 times and 1.10 times as on 31st March 2025 respectively. The Net Cash Accruals/Total Debt (NCA/TD) stood low at 0.17 times as on 31st March 2026 (prov.) and 0.12 times as on 31st March, 2025. Acuite believes the financial risk profile of the company would remain moderate on account of modest net worth base and absence of major debt funded capex plan.
Moderately intensive working capital operations The operations of the company remained working capital intensive reflected in high Gross Current Asset (GCA) days of 156 days in FY2026 (prov.) as compared to 168 days in FY2025. The GCA days improved moderately on account of improved debtor cycle to an extent. The inventory days stood at 103 days as on 31st March, 2026 (prov.) as compared to 102 days as on 31st March, 2025. The inventory cycle is of around 90 days. The debtor period stood at 52 days as on March 31, 2026 (prov.) as compared to 57 days as on March 31, 2025. The realization cycle of the company is around 45-60 days. The creditor days stood at 137 days as on 31st March 2026 (prov.) as compared to 120 days as on 31st March 2025. The domestic creditors are repaid within 30-45 days however the import LC backed creditors have a longer period for repayment of around 150 days. Acuite believes, the operations of the company would remain moderately working capital intensive due to its nature of business. Susceptibility of profitability to volatility in raw material prices and forex risk in an intensely competitive industry Profitability remains vulnerable to fluctuations in raw material prices, as the company’s key inputs are crude oil derivatives. Prices of polymer-based materials such as plastic resins generally move in line with crude oil prices and global petrochemical cycles. Since EPIL operates in a highly competitive and fragmented moulded plastic products industry, its ability to fully pass on higher input costs to customers is limited. This is especially challenging in contracts where price revisions are not immediate. As a result, any sharp rise in raw material prices can put pressure on operating margins, while delays in procurement or inventory management can further increase earnings volatility. Therefore, raw material price risk remains a key monitorable. The company imports 36.62 per cent of total purchases. Thereby exposed to foreign exchange fluctuation risk. For hedging the foreign exchange risk the company engages in forward contract at a particular exchange rate in advance and thereby avoiding the adverse rate movement. However, company remains vulnerable to adverse forex movements for its unhedged exposure.
Rating Sensitivities
Potential triggers (individual or collective) for an upward rating action:
Significant growth in revenues while maintaining healthy profitability
Improvement in working capital management with GCA below 120 days
Improvement in financial risk profile
Potential triggers (individual or collective) for a downward rating action:
Significant decline in revenues and profitability margins
Deterioration in financial risk profile due to unexpected borrowings leading to debt to equity of above 2.5 times.
Further, elongation in working capital cycle exerting pressure on liquidity
Liquidity Position
Adequate
The company’s liquidity position remains adequate, supported by net cash accruals of Rs.12.85 Cr. in FY2026 (prov.) against long-term debt repayments of Rs.6.30 Cr. during the same period. The NCA is expected to remain in the range of ~Rs. 12.83 Cr. to Rs. 16.70 Cr. for FY27-FY28 against the debt repayment obligation of ~Rs. 6.90 Cr. to Rs. 8.90 Cr. during the same period. The current ratio stood at a moderate 0.95 times as on March 31, 2026 (prov.), with cash and bank balances at Rs.0.70 Cr. The company’s operations remained moderately working capital intensive, as reflected in Gross Current Asset (GCA) of 156 days in FY2026 (prov.) as compared to 168 days in FY2025. Further, the utilisation of fund-based limits remained moderate at ~83.69 per cent, while non-fund-based utilisation also continued to be elevated at approximately 86.59 per cent over the six-month period ended May 2026.
Outlook: Stable
Other Factors affecting Rating
None
Particulars
Unit
FY 26 (Provisional)
FY 25 (Actual)
Operating Income
Rs. Cr.
216.15
195.07
PAT
Rs. Cr.
4.47
3.42
PAT Margin
(%)
2.07
1.76
Total Debt/Tangible Net Worth
Times
1.62
1.86
PBDIT/Interest
Times
2.14
2.15
Status of non-cooperation with previous CRA (if applicable)
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.
Contacts
List of instruments and names of regulators of the instruments
