Experienced management and established track record of operations
FGTPL was incorporated in 1993 and has its presence in the industry for over two decades . Mr. Surinder Pal Singh has a vast experience of over 4 decades in engineering industry. The Directors, Mr. Gurdip Singh, Mr. Sarbjit Singh and Mr. Balbir Singh Dua also possess experience of more than three decades in this industry. Acuité believes that the company will benefit from its experienced management which helps the company maintain long standing relations with its customers and suppliers.?

Moderate Financial Risk Profile
FGTPL’s financial risk profile is comfortable marked by moderate net worth, comfortable gearing and average debt protection metrics. The net worth of the company stood at Rs. 20.52 Cr. as of March 31, 2024, against Rs. Rs. 19.09 Cr. as of March 31, 2023. The unsecured loans by Directors have been considered as a part of equity in the form of quasi equity as the same have been subordinated. The gearing of the company stood low at 0.47 times on March 31, 2024 as against 0.55 times as on March 31, 2023. The gearing has improved owing to repayments of  term loans. The interest coverage ratio stood  at 3.55 times during FY2024 against 3.65 times in FY2023. However, the DSCR stood relatively low at 0.87 times for FY2024 against 0.98 times in FY2023.  the directors have infused ~Rs. 5.61 Cr. in the form of unsecured loans during FY2024 to support repayments.

Acuite, believes that FGTPL would maintain a comfortable financial risk profile in the near to medium term owing to repayment of existing debt and absence of debt funded capex.

Stagnancy in operating performance
FGTPL reported revenue of Rs. 30.96 Cr. in FY2024 as against Rs. 29.58 Cr. in FY2023. The revenues remained subdued due to intense competition from Chinese products which are priced way too lower. Further, the market for this type of product being niche, it is difficult to maintain over the top prices and prices have to be placed competitively. In 11MFY25, FGTPL reported revenue of Rs. 31.03 Cr. and expected to close the year at Rs. 32 Cr. The company’s operating margins stood at 13.57 percent in FY2024 as against 15.39 percent in FY2023. The margins have been affected pertaining to higher Admin and employee related expenses. The PAT margins stood at 3.56 percent in FY2024 against 5.39 percent in FY2023 owing to finance costs.  Acuite believes, that FGTPL would maintain steady operating profile owing to challenging market scenarios.

Working Capital intensive operations 
FGTPL’s working capital cycle is intensive in nature marked by high GCA days. The GCA days improved although stood high at 164 days as on March 31, 2024 against 188 days as on March 31, 2023. The higher GCA is primarily dominated by higher Inventory days which have been at around 104 days for FY2024 and 115 days for FY2023. The debtor days as on March 31, 2024 have stood at 29 days against 37 days as on March 31, 2023. The company has tie-ups with around 500 distributors all over India who buy and sell further. The company’s dependency on working capital limits has been limited as reflected in the utilization of 88 per cent  for last 06 months ended February 2025.