| Extensive experience of the promoters coupled with a diversified product profile
The Tenty Group has been in the plastic packaging segment for more than four decades. The group has its own units in West Bengal and Assam, respectively. Over the years, the extensive experience of the promoters has helped the group build a healthy reputation and long standing relationships with its reputed clientele, including Linc Pen and Plastics Ltd., Haldiram Bhujiwala Ltd., Orient Electric Ltd, Emami Limited, RSH Global & Dabur. The promoters’ experience of over four decades, their strong understanding of local market dynamics, and healthy relations with suppliers and customers should continue to support the business. The group has a diversified product profile that includes a plastic pen and its spare parts, fan and fan parts, various types of packaging products, and varied-size containers, cups, and bottles made of 100 percent food-grade materials. The products find application in various end-user industries, such as the education sector, food and beverage sectors, FMCG, etc. The group's reputed customer base and diversified product profile de-risk the business risk to a large extent. Acuite believes that the experienced management of the promoters and its diversified product profile will continue to support the business risk profile of the group.
Improvement in scale of operation albeit decline in profitability
The scale of operations of the group improved with revenues stood at Rs.845.55 crores in FY2025 as against Rs.690.86 crores in FY2024 and Rs.768.67 crores in FY2023. The stable operating turnover in the last two years is due to stable capacity utilisation is observed across the products of the group. The group is also into trading and manufacturing of electric goods and appliances. Further, the group has reported turnover of Rs.435 crores in 8MFY2026 and expects to achieve turnover of Rs.900-925 crores in FY2026. The operating margin of the group moderated and stood at 8.09 per cent in FY2025 as against 9.83 per cent in FY2024. This moderation in the margins is on the account of the fluctuations in the raw material prices during the year, however the margins are expected to improve in near to medium terms on account of expected improvement in realisations across the product segments. The group incurred loss at PAT level with negative PAT Margin at (1.42) percent in FY2025 as against 2.61 percent in FY2024. The decline in PAT margins for the group in FY2025 and FY2024 was primarily due to higher amortization (12M in FY25 and 6M in FY24) of intangible assets (Polar Brand Marketing Rights), the management amortized these assets as a conservative measure which has adversely impacted reported profitability. Further this amortization will not be done further in FY2026 and FY2027, thus improving profitability.
Moderate financial risk profile
The group’s financial risk profile remained moderate marked by healthy net worth base, moderate gearing and protection metrics. Total net-worth stood at Rs.319.21 crores in FY2025 as against Rs.333.64 crores in FY2024 the decline is due to losses incurred by the group, while the tangible net worth of the group stood at Rs.80.12 crores as on March 31, 2025 as against Rs.67.97 crores as on March 31, 2024 and Rs.125.11 crores as on March 31, 2023. Further, Acuite has considered Quasi equity to the tune of Rs.142.07 crores as on March 31, 2025 as part of net worth as these loans are subordinated to bank debt. The intangible assets stood at Rs.239.09 crores as on March 31, 2025 and Rs.265.77 crores as on March 31, 2024 which primarily includes computer software, ERP software, trade mark and marketing rights. Gearing (debt to equity) of the group stood at 2.70 times as on March 31, 2025 as compared to 2.19 times as on March 31, 2024. The total debt stood at Rs.216.49 crores as on March 31, 2025 which consists of Rs.31.38 crores of long term debt, Short term debt of Rs.161.88 crores, USL from promoters & directors of Rs.5.49 crores and CPLTD of Rs.17.73 crores. The promoters have extended financial support to the group, via unsecured loans to cover working capital requirement and debt obligations. Debt/EBITDA of the group moderated and stood at 2.73 times as on March 31, 2025 as against 1.94 times as on March 31,2024. The Total outside Liabilities/Tangible Net Worth (TOL/TNW) stood high at 8.10 times as on March 31, 2025 as against 6.65 times as on March 31, 2023. The debt protection metrics of the group is moderate marked by Interest Coverage Ratio (ICR) at 1.65 times as on March 31, 2025 and Debt Service Coverage Ratio (DSCR) at 1.18 times as on March 31, 2025. Net Cash Accruals/Total Debt (NCA/TD) stood low at 0.12 times as on March 31, 2025. Further, Tenty Limited has recently signed the term sheet for equity infusion of Rs.100 crores which will improve the net-worth in near to medium terms. Acuité believe, the financial risk profile of the group wil improve on account of steady cash accruals, expected equity infusion and absence of debt funded CAPEX planned over the medium term.
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| Working capital-intensive nature of operations
The working capital operations of the group remained intensive in nature marked by high Gross Current Assets (GCA) of 267 days in FY2025 as against 226 days in FY2024. The high GCA days are on account of stretched receivables of the group which stood at 196 days in FY2025 as against 189 days in FY2024, due to the seasonal nature of fan and coolers, the revenue for these products is relatively higher during Q4 of the financial year and due to the peak season in fan components and cooler sales in Q4, the group is saddled with high debtor days leading to high working capital intensity during the financial year end. Further, the stretch in the debtor levels is majorly observed in the Polar Elektric which sel fans and fan components and standard debtor days range from 120-150 days. Further, the creditor days of the group has increased to 214 days in FY2025 as against 178 days in FY2024 and the inventory days of the group stood at 69 days in FY2025 as against 30 days in FY2024. However, the limit utilization remained moderate at 81 per cent and non-fund-based limits utilization at 80 per cent for last 6 months ended November 2025. Acuite believes that the working capital operations of the company would remain intensive in near to medium term due to the elongated debtors.
Susceptibility of profitability to volatility in the raw material prices
The prices of the raw materials are impacted by global demand and linked to global crude oil prices, making them highly volatile. The major raw materials for Tenty’s products are plastic granules derived from crude oil, making them highly volatile. The fluctuation in prices is generaly passed on to the customers, albeit with a lag. The group’s margins are susceptible to the rise in material costs owing to a time lag in the pass-through of price hikes to the customers, although the regular price revision mitigates the risk to an extent.
Intense competition in the packaging industry
The plastic packaging industry is highly fragmented and the consequent intense competition from various players may continue to constrain scalability, pricing power and profitability. The Indian flexible packaging industry is highly fragmented on account of the low capital intensity, low entry barriers and easy availability of raw materials. High competition put pressure on margins thereby reducing bargaining powers with customers for players such as Tenty group. Further, raw material used in packaging is plastic granules the prices of which are fluctuating having direct impact on operating margins. Acuité believes that the ability of the group to pass on such adverse impact to its customers remain a key sensitivity factor.
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