­Acuite has considered the consolidated financial and business risk profile of GAL including its subsidiaries. The consolidation is in view of common promoter group, significant financial and operational linkages between the entities.

­E­stablished track record and experienced management
GAL was formally established in 1997 by Mr. Vipul Parekh and Mrs. Kaksha Parekh, who bring in more than two decades of experience in the flavour and fragrance sector. They are ably supported by Mr. Yash Parekh who joined the business in 2011 and has expanded the company’s presence in international markets, contributing to the increased export orders. The group has a diversified global customer base across multiple markets.
Acuite believes that, the promoters' experience in industry, will continue to drive the business over the medium term.

Healthy financial risk profile 
The financial risk profile of the group has remained healthy despite moderation in the operating performance in FY2026. The networth stood at Rs. 449.64 Cr. on March 31, 2026, post infusion of equity through IPO proceeds. These proceeds were utilized for partial prepayment of long term debt and working capital limits. The gearing improved and stood low at 0.34 times on March 31, 2026 from 0.79 times on March 31, 2025. The TOL/TNW levels also remain low at 0.41 times on March 31, 2026. The Debt-EBITDA levels, however increased to 3.65 times in FY2026 from 2.49 times in FY2025. 
The financial risk profile is expected to improve over the medium term on account of no further debt funded capex plans.

­Moderation in the operating performance
The operating revenue of the group declined to Rs. 366.47 Cr. in FY2026 from Rs. 503.95 Cr. in FY2025. The operating performance was affected due to imposition of US tariffs, revision in GST rates, which had affected the overall sales volumes. Further, increase in the material costs led to moderation in the profitability margins. Also, due to the ongoing West Asia crisis prices of raw materials for the newly established phenol division have increased significantly, thereby leading to operational challenges in the same. However, despite moderation, the EBITDA margin stood healthy at 11.12 percent in FY2026. Going forward, improvement in the overall operating performance with increase in volumes of existing business and timely ramp up of operations in the new manufacturing facility will be a key monitorable.

Intensive working capital cycle
The working capital cycle of the group remains intensive, with high GCA (gross current assets) of 355 days in FY2026 as against 248 days in FY2025. These are majorly driven by the high inventory levels, which stood at 262 days in FY2026, up from 146 days in FY2025, majorly due to stock up for the new manufacturing facility. Post commencement of operations in the new manufacturing facility, the inventory levels are expected to moderate. Further, debtor days stood improved at 76 days in FY2026 as against 104 days in FY2025. On the other hand, the creditor days stood 25 in FY2026 as against 22 days in FY2025.

Profitability susceptible to volatility in raw material prices and foreign exchange fluctuation risk
The group's operating profitability is exposed to volatility in prices of key raw materials— notably mint, eucalyptus, clove—sourced both domestically and from suppliers in countries such as Indonesia and Madagascar and phenol being a petrochemical making it's prices highly volatile to changes in crude prices. Further, its export sales to markets including the USA, Germany and Brazil create foreign-exchange risk that can affect realized margins. However, this exposure is partly offset by a natural hedge from import–exports and the group also has a hedging mechanism in place.

• Improvement in operating performance with revenues reaching above Rs. 700-800 Cr at stable operating margins
• Improvement in working capital cycle

• Further deterioration in the operating performance with net cash accruals falling below Rs 40 Cr    
• Increase in debt levels leading to deterioration of the financial risk profile