Press Release March 20, 2025 EASTERN POLYCRAFT INDUSTRIES LIMITED Rating Reaffirmed

Product	Quantum (Rs. Cr)	Long Term Rating	Short Term Rating
Bank Loan Ratings	57.50	ACUITE BBB- | Stable | Reaffirmed	-
Bank Loan Ratings	32.50	-	ACUITE A3 | Reaffirmed
Total Outstanding	90.00	-	-
Total Withdrawn	0.00	-	-

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’. Rationale for rating reaffirmation The rating reaffirmation considers the moderation in scale of operations albeit improvement in profitability. The rating also factors in the experienced management and the reputed client base of the company. These strengths are, however, offset by the moderate financial risk profile, working capital intensive nature of operations and the competitive industry.

About the Company

Incorporated in 1997, Eastern Polycraft Industries Limited (EPIL) is engaged in the 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). EPIL, is in the process of setting up a new plant at Kharagpur, West Bengal which is expected to commence operations in April 2025.

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, having more than four decades of experience 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 private players, Indian Oil Corporation Limited (IOCL) and Bharat Petroleum Corporation Limited (BPCL), Haldia Petrochemicals Limited (HPCL), Asian Paints Ltd to name a few. Acuité believes the healthy client relationships and the experienced management will continue to benefit the company going forward. Moderation in the operating revenues albeit improvement in profitability The scale of operations of the company moderated to Rs.198.45 Cr. in FY2024 from Rs.216.51 Cr. in FY2023 on account of lower realizations. The company achieved revenues of Rs.185 Cr. in 10MFY2025 which is expected to further moderate the scale. The company is adding a new plant at Kharagpur, West Bengal which is expected to augment the scale of operations to an extent. The operating margins however improved to 9.54 per cent in FY2024 from 7.71 per cent in FY2023. The PAT margin, stood at 1.72 per cent in FY2024 as against 1.38 per cent in FY2023. Acuité believes that, the company's scale of operations is expected to improve over the medium term owing to the ongoing capex plans.

Weaknesses

Moderately intensive working capital operations The company has moderately intensive working capital operations marked by Gross Current Asset (GCA) of 148 days in FY2024 as compared to 149 days in FY2023. The GCA days remained stable on account of similar inventory period as well as the debtor cycle. The inventory days stood at 85 days as on 31st March, 2024 as compared to 80 days as on 31st March, 2023. The debtor period stood at 58 days as on March 31, 2024 as compared to 59 days as on March 31, 2023. The creditor days stood at 98 days as on 31st March 2024 as compared to 100 days as on 31st March 2023. The fund-based limit remained highly utilized at 94.73 per cent over the five months ended January 2024. Acuité believes that the company's operations would remain working capital intensive on account of higher inventory holding period.  Moderate financial risk profile The company’s financial risk profile remained moderate marked by modest capital structure and debt protection metrics. The tangible net worth of the company increased to Rs.37.75 Cr. as on 31st March, 2024 from Rs.34.33 Cr. as on 31st March, 2023. Gearing of the company improved to 1.61 times as on 31st March, 2024 from 1.65 times as on 31st March, 2023. The Total outside Liabilities/Tangible Net Worth (TOL/TNW) stood at 2.71 times as on 31st March, 2024 as compared to 3.07 times as on 31st March, 2023. However, the debt protection metrics of the company is moderate, marked by Interest Coverage Ratio at 2.07 times and Debt Service coverage ratio at 1.20 times as on 31st March, 2024. The Net Cash Accruals/Total Debt (NCA/TD) stood low at 0.14 times as on 31st March, 2024. The company is undergoing a capex plan to set up a new plant in Kharagpur which is expected to commence operations in April 2025. The total cost is around Rs. 24.00 Cr. which is to be financed by term loan of Rs. 15.00 Cr. and rest by internal accruals. Acuité believes that the financial risk profile of the company expected to remain moderate on the back of debt funded  capex plan. Exposure to competitive space EPIL operates in a competitive and fragmented industry with several players engaged in the moulded plastic products industry in organized and unorganized sector. Thus, the company faces pricing pressure from other competitors which limits its bargaining power.

Rating Sensitivities

Growth in the scale of operations while improving profitability margins. Deterioration in financial risk profile owing to higher than expected debt funded capex. Elongation in working capital cycle.

Liquidity Position

Adequate

The company’s adequate liquidity position is marked by net cash accruals Rs.8.57 Cr. in FY2024 as against long term debt repayment of Rs.7.39 Cr. over the same period. The current ratio stood moderate at 1.03 times as on 31st March, 2024 as against 1.08 times as on 31st March, 2023. The cash and bank balances stood at Rs.0.23 Cr. in FY2024 as against Rs. 0.17 Cr. in FY2023. The fund-based limit remained utilized at ~94.73 per cent over the five months ending January, 2024. Acuité believes that going forward the liquidity position of the company will remain adequate over the medium term due to the steady accruals.

Outlook: Stable

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Other Factors affecting Rating

­None

Key Financials

Particulars	Unit	FY 24 (Actual)	FY 23 (Actual)
Operating Income	Rs. Cr.	198.45	216.51
PAT	Rs. Cr.	3.42	2.98
PAT Margin	(%)	1.72	1.38
Total Debt/Tangible Net Worth	Times	1.61	1.65
PBDIT/Interest	Times	2.07	2.14

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

­­Not Applicable

Interaction with Audit Committee anytime in the last 12 months (applicable for rated-listed / proposed to be listed debt securities being reviewed by Acuite)

Not applicable

Any other information

­None

Applicable Criteria

• Default Recognition :- https://www.acuite.in/view-rating-criteria-52.htm • Manufacturing Entities: https://www.acuite.in/view-rating-criteria-59.htm • Application Of Financial Ratios And Adjustments: https://www.acuite.in/view-rating-criteria-53.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 22 Dec 2023 Bank Guarantee (BLR) Short Term 8.00 ACUITE A3 (Reaffirmed) Letter of Credit Short Term 24.50 ACUITE A3 (Reaffirmed) Term Loan Long Term 20.50 ACUITE BBB- | Stable (Reaffirmed) Cash Credit Long Term 37.00 ACUITE BBB- | Stable (Reaffirmed) 10 Oct 2022 Bank Guarantee (BLR) Short Term 6.00 ACUITE A3 (Reaffirmed) Letter of Credit Short Term 28.50 ACUITE A3 (Reaffirmed) Term Loan Long Term 8.89 ACUITE BBB- | Stable (Reaffirmed) Covid Emergency Line. Long Term 9.33 ACUITE BBB- | Stable (Reaffirmed) Cash Credit Long Term 37.00 ACUITE BBB- | Stable (Reaffirmed) Proposed Long Term Bank Facility Long Term 0.28 ACUITE BBB- | Stable (Reaffirmed)

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Annexure - Details of instruments rated

Lender’s Name ISIN Facilities Date Of Issuance Coupon Rate Maturity Date Quantum (Rs. Cr.) Complexity Level Rating Bank of Baroda Not avl. / Not appl. Bank Guarantee (BLR) Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 8.00 Simple ACUITE A3 | Reaffirmed Bank of Baroda Not avl. / Not appl. Cash Credit Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 37.00 Simple ACUITE BBB- | Stable | Reaffirmed Bank of Baroda Not avl. / Not appl. Letter of Credit Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 24.50 Simple ACUITE A3 | Reaffirmed Not Applicable Not avl. / Not appl. Proposed Long Term Bank Facility Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 0.51 Simple ACUITE BBB- | Stable | Reaffirmed Bank of Baroda Not avl. / Not appl. Term Loan Not avl. / Not appl. Not avl. / Not appl. 30 Jun 2026 0.44 Simple ACUITE BBB- | Stable | Reaffirmed Bank of Baroda Not avl. / Not appl. Term Loan Not avl. / Not appl. Not avl. / Not appl. 30 Apr 2026 0.46 Simple ACUITE BBB- | Stable | Reaffirmed Bank of Baroda Not avl. / Not appl. Term Loan Not avl. / Not appl. Not avl. / Not appl. 30 Sep 2028 4.09 Simple ACUITE BBB- | Stable | Reaffirmed Bank of Baroda Not avl. / Not appl. Term Loan Not avl. / Not appl. Not avl. / Not appl. 30 Sep 2031 15.00 Simple ACUITE BBB- | Stable | Reaffirmed

Contacts

Mohit Jain Senior Vice President - Rating Operations Patel Sneh Associate Analyst - Rating Operations	Contact details exclusively for investors and lenders Mob: +91 8591310146 Email ID: analyticalsupport@acuite.in

About Acuité Ratings & Research

Acuité is a full-service Credit Rating Agency registered with the Securities & Exchange Board of India (SEBI). The company received RBI Accreditation as an External Credit Assessment Institution (ECAI) for Bank Loan Ratings under BASEL-II norms in the year 2012. Acuité has assigned ratings to various securities, debt instruments and bank facilities of entities spread across the country and across a wide cross section of industries. It has its Registered and Head Office in Kanjurmarg, Mumbai. Disclaimer: An Acuité rating does not constitute an audit of the rated entity and should not be treated as a recommendation or opinion that is intended to substitute for a financial adviser's or investor's independent assessment of whether to buy, sell or hold any security. Ratings assigned by Acuité are based on the data and information provided by the issuer and obtained from other reliable sources. Although reasonable care has been taken to ensure that the data and information is true, Acuité, in particular, makes no representation or warranty, expressed or implied with respect to the adequacy, accuracy or completeness of the information relied upon. Acuité is not responsible for any errors or omissions and especially states that it has no financial liability whatsoever for any direct, indirect or consequential loss of any kind, arising from the use of its ratings. Ratings assigned by Acuité are subject to a process of surveillance which may lead to a revision in ratings as and when the circumstances so warrant. Please visit our website (www.acuite.in) for the latest information on any instrument rated by Acuité. Please visit https://www.acuite.in/faqs.htm to refer FAQs on Credit Rating. Note: None of the Directors on the Board of Acuité Ratings & Research Limited are members of any rating committee and therefore do not participate in discussions regarding the rating of any entity.