Press Release July 06, 2026 ETHICS PROSPERITY PRIVATE LIMITED Rating Assigned

Product	Quantum (Rs. Cr) (SEBI)	Quantum (Rs. Cr) (Other FSR)	Long Term Rating	Short Term Rating	Regulated By
Bank Loan Ratings	0.00	17.00	ACUITE BBB | Stable | Assigned	-	RBI
Total Outstanding	0.00	17.00	-	-	-
Total Withdrawn	0.00	0.00	-	-	-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 assigned its long-term rating of ‘ACUITÉ BBB' (read as ACUITE Triple B ) on the Rs. 17.00 Cr. bank facilities of Ethics Prosperity Private Limited (EPPL). The outlook is ‘Stable’. Rationale for Rating The rating assigned reflects the extensive experience of the promoters and management team in providing supply chain solutions across industries, along with the Ethics group’s established operational track record. The rating further draws support from the steady growth in operating scale with healthy profitability which is expected to sustain on the back of long-term contracts with customers and healthy financial risk profile marked by low gearing and strong debt protection metrics. However, these strengths are partially offset by moderately intensive working capital operations, customer concentration risk and exposure to contract renewal risk amidst tender based operations.

About Company

­­­Incorporated in 2020, Ethics Prosperity Private Limited (EPPL) is Surat based company engaged in Warehousing, Logistics & Distribution business.The  The board of directors consists of Mr. Bipinbhai Ishwarbhai Kevadiya, Mr. Rajendrakumar Vallabhbhai Asodaria, Mr. Chiragbhai Trikambhai Lakhani & Mr. Rohit V Pansara.

About the Group

­­­Ethics Group of Companies (EGC) Ethics group of companies (EGC) is the promoter and holding company. Established in FY2010 and headquartered in Surat, Gujarat, the group has diversified operations across supply chain management, warehousing, logistics, technology solutions and distribution services. Over the years the group has developed a pan- india logistics network with over 1 million sq.ft of warehousing infrastructure and service coverage across more than 19000 pin codes. Ethics Innovations Private Limited (EIPL) Incorporated in 2017 and based in Gujarat, Ethics Innovation Private Limited (EIPL) was established as a special purpose vehicle (SPV) for undertaking the Pradhan Mantri Bhartiya Janaushadhi Praiyojana (PMBJP) project implemented by the Pharmaceuticals & Medical Devices Bureau of India (PMBI) contract and operates under a back-to-back arrangement with Ethics Prosperity Private Limited(EPPL), which undertakes the operational execution of the project, including warehousing, logistics, inventory management and supply chain activities. The current directors of EIPL are Mr. Bipinbhai Ishwarbhai Kevadiya and Mr. Chiragbhai Trikambhai Lakhani.

Unsupported Rating

­­­­­­Not Applicable­

Analytical Approach

Extent of Consolidation

•Full Consolidation

Rationale for Consolidation or Parent / Group / Govt. Support

­­­Acuite has consolidated the standalone business and financial risk profile of Ethics Prosperity Private Limited (EPPL) and Ethics Innovation Private Limited (EIPL) (together referred to as “Ethics Group” or “EG”) to arrive at the rating. The consolidation is on account of common management and significant operational linkages between the entities.

Key Rating Drivers

Strengths

­­Established operational track record of the group and experienced management The EGC has been operating in the supply chain, warehousing and logistics segment for more than a decade through other entities in the group. The operations of the group are managed by Mr. Bipinbhai Kevadiya, Mr. Rajendrakumar Asodaria, Mr. Chiragbhai Lakhani and Mr. Rohit Pansara, who have experience in the logistics and supply chain industry. Over the years, the group has developed a pan-india warehousing and logistics network and provides integrated supply chain warehousing, fulfilment and distribution services across the pharmaceutical, healthcare, FMCG and retail sectors. In addition to its warehousing and supply chain management business, the group has expanded its presence in the distribution segment by leveraging its existing warehousing and retail network. The customer base includes PMBI (Jan Aushadhi), Zota healthcare, Haryana Agro Industries Corporation Limited (HAICL), Meesho, Himalaya Wellness and Varun Beverages, among others. Acuité believes that the group’s operational track record and management experience support its business profile and customer relationships. Steady growth in operating performance expected to sustain on the back of long term contracts with customers On a consolidated basis, Ethics Group (EG) reported revenue of Rs. 231.62 Cr. in FY26(Prov.) (FY25: Rs. 194.42 Cr.).The growth was driven by higher business volumes in the warehousing and integrated supply chain management segment, along with increased contribution from the distribution business. The group continues to derive the majority of its revenue from warehousing and supply chain management services, while the distribution segment has scaled up over the last two years, which is expected to continue further. EBITDA stood at Rs. 52.42 Cr. in FY26(Prov.) (FY25: Rs. 60.68 Cr.; FY24: Rs. 3.65 Cr.) while EBITDA margins stood at 22.63% in FY26(Prov.) (FY25: Rs. 31.21%). The improvement in FY25 profitability was primarily attributable to the recognition of settlement income of Rs. 36.97 Cr. arising from the resolution of the dispute between PMBI and EIPL, wherein differential service charges pertaining to FY23, FY24 and part of FY25 were recognised during FY25. PAT stood at Rs. 36.53 Cr. in FY26(Prov.) (FY25: Rs. 40.73 Cr.). The group has long term contracts of ~ 10 years with key customers such as PMBI (Jan Aushadhi), Zota healthcare, Haryana Agro Industries Corporation Limited (HAICL) and few others. Thus, the growth is expected to sustain in revenues although some moderation is likely to be observed in profitability margins due to expansion of distribution business. Acuité believes that the group’s ability to sustain growth in its core warehousing and supply chain management operations, while scaling up the distribution business, will remain a key monitorable. Healthy financial risk profile EG’s financial risk profile is healthy, marked by low gearing, moderate net worth and strong debt protection metrics. The net worth of the company stood at Rs. 82.96 Cr. as on March 31, 2026(Prov.) (As on March 31, 2025: Rs. 45.23 Cr.), primarily driven by retention of profits. The gearing (debt-to-equity) is low at 0.15 times as on March 31, 2026(Prov.) (March 31, 2025: 0.48 times). Debt protection indicators are strong, with the interest coverage ratio (ICR) at 41.38 times in FY26(Prov.) (FY25: 32.47 times) and the debt service coverage ratio (DSCR) improved to 31.86 times in FY26(Prov.) (FY25: 25.29 times). The net cash accruals to total debt (NCA/TD) ratio stood at 3.07 times in FY26(Prov.) (FY25: 2.11 times). The Debt-to-EBITDA ratio is low at 0.24 times in FY26(Prov.) (FY25: 0.35 times). Acuité believes, that the group’s financial risk profile is expected to remain healthy over the medium term, supported by low leverage and comfortable debt protection metrics.­

Weaknesses

­­­Moderately intensive working capital operations The group’s working capital operations are moderately intensive, with Gross Current Asset (GCA)  at 133 days in FY26 (Prov.) (FY25: 138 days). The elevated GCA days are primarily due to higher other current assets which includes advance to suppliers and TDS receivables. The debtor collection period stood at 54 days in FY26 (Prov.), (FY25: 49 days), broadly in line with the average collection cycle of 45–60 days. Inventory holding stood at 6 days in FY26 (Prov.), (FY25: 5 days). The creditor payment period stood at 79 days in FY26 (Prov.), (FY25: 112 days). Further, the average utilisation of consolidated fund-based limits remained high at around 92.58% over the 10 months ended March 2026. The group has now secured additional facilities of Rs.10 Cr. in cash credit and Rs.25 Cr. in TL (LAP) for general corporate purpose in EPPL which is expected to support the incremental working capital requirements. Acuité believes that the group's working capital cycle is likely to remain moderately intensive over the medium term. Customer Concentration risk The group’s customer profile remains concentrated, with PMBI (Jan Aushadi) contributing ~49 per cent of the revenue in FY26(Prov.). Further the top three customers, namely PMBI (Jan Aushadi), Zota healthcare Limited and Haryana Agro Industries Corporation Limited (HAICL), together accounted for ~70 per cent of the revenue during the year. Consequently, the group’s revenue and profitability remain susceptible to any adverse change in the business relationship, operating performance or procurement plans of these customers. However, the risk is partly mitigated by the long-term nature of the contracts and the established business relationships with its key customers and the addition of new customers across the warehousing, supply chain management and distribution segments. Acuité believes that the group’s ability to maintain relationships with its key customers while diversifying its customer base, while successfully transitioning into new business model will remain a key rating sensitivity. Exposure to contract renewal risk amidst tender based operations The group’s operations are dependent on the continuation and renewal of its key customer contracts, which form the basis of its revenue visibility. While most of the contracts are long-term in nature, any adverse change in contract terms, non-renewal or premature termination of key agreements could impact the group’s business operations and profitability. Further, a significant portion of the group’s revenue is derived from PMBI (Jan Aushadi) project,which is awarded through a tender based process. Accordingly, the group remains exposed to risks associated with renewal and re-award of the contract upon expiry. Any inability to secure renewal of key contracts or successfully bid for future tenders may impact the group's revenue profile and operating performance.

Rating Sensitivities

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

­ Significant improvement in scale of operations, while maintaining healthy profitability Improvement in working capital management, with GCA below 120 days consistently

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

­ Significant deterioration in revenue and profitability with EBITDA below 10 per cent Elongation in working capital cycle, with GCA above160 days, exerting pressure on liquidity Deterioration in financial risk profile, with TOL/TNW above 2.00 times

Liquidity Position

Adequate

­­­The groups’s liquidity position is adequate, supported by net cash accruals of Rs. 39.30 Cr. in FY26 (Prov.) against its NIL maturing debt obligations. Further, the company is expected to generate cash accruals in the range of Rs. 53.96 – 79.21 Cr., against repayment obligations of Rs. 0.67 – 4.31 Cr. over the medium term. Reliance on fund-based working capital limits is high, with an average utilisation of 92.58 per cent over the ten months ending March 2026. The cash and bank balance stood at Rs. 0.56 Cr. and the current ratio stood at 2.22 times as of March 31, 2026(Prov.). The recent enhancement in working capital limits of Rs. 10 Cr. in May 2026, is expected to further supported the overall liquidity position of the group. Acuité believes that the group’s liquidity position will remain adequate over the medium term on account of expected steady cash accruals.

Outlook: Stable

­

Other Factors affecting Rating

­­­­­None

Key Financials

Particulars	Unit	FY 26 (Provisional)	FY 25 (Actual)
Operating Income	Rs. Cr.	231.62	194.42
PAT	Rs. Cr.	36.53	40.73
PAT Margin	(%)	15.77	20.95
Total Debt/Tangible Net Worth	Times	0.15	0.48
PBDIT/Interest	Times	41.38	32.47

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

­­­None

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 • Service Sector: https://www.acuite.in/view-rating-criteria-50.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 :

­­­­­Not Applicable

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

­­­­ Sr. No Name of the company 1 Ethics Prosperity Private Limited 2 Ethics Innovations Private Limited

Contacts

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

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