Extensive experience of the management in the readymade garments industry 
GKW was established as a partnership firm in 1992 by Mr. V. Rajendran along with his brother Mr. V. Gnana Sivamoorthy, who possess more than 3  decades of experience in the readymade garments industry. The firm currently exports around 90 percent of its products to four countries, viz. United Kingdom, Sweden, Ireland, France. The extensive experience of the promoters in the aforementioned industry has helped the firm to established long-term relationships with its customers and suppliers. Acuité believes that GKW will continue to benefit from the promoters' established presence in the readymade garments industry and its improving business risk profile over the medium-term.

Average financial risk profile 
The average financial risk profile is marked by improving net worth, decrease in gearing along with moderate debt protection metrics. The tangible net worth stood at Rs.23.59 Cr. in FY25 (Prov.) as against Rs.17.43 Cr. in FY24. The gearing stood at 1.65 times in FY25 (Prov.) as against 2.29 times in FY24. It is expected to weaken slightly due to debt funded capex plan. The interest coverage ratio stood at 3.18 times in FY25 (Prov.) as against 2.52 times in FY24. The debt service coverage ratio stood at 1.78 times in FY25 (Prov.) & same in FY24. TOL/TNW stood at 2.62 times in FY25(Prov.) as compared to 4.49 times in FY24. Acuite believes the financial risk profile is expected to remain at similar levels with some expected moderation in capital structure and debt protection metrices over the medium term.

Improving Scale of Operations 
GKW has reported an operating income of Rs.189.26 Cr. in FY25 (Prov.) as against Rs.112.26 Cr. in FY24. The top line has experienced increase driven by the increased execution of orderbook. The firm has Rs.69.88 Cr. order in hand as on September2025. The EBITDA margin stood at 6.25 percent in FY25 (Prov.) as compared to 8.19 percent in FY24. The decrease in margin is a result of increase in price of yarn and other production costs, and the management was not able to pass the same on its customers. The PAT margin stood at 3.97 percent in FY25 (Prov.) as against 4.50 percent in FY24.  The ROCE levels stood at 19.14 % in FY2025 (Prov.) as against 18.30 % in FY2024.  Acuite believes the scale of operation will improve backed by continuous order being received and its timely execution over the medium term.

Working capital intensive operations 
The operations of the firm are intensive marked by GCA (Gross Current Asset) days at 147 days in FY25 (Prov.) as against 283 days in FY24. The inventory days stood at 37 days in FY25 (Prov.) as compared to 102 days in FY24. The debtor days stood at 56 days in FY25 (Prov.) as against 86 days in FY24 the other current assets include Rs.29.79 Cr. The creditor days stood at 82 days in FY25 (Prov.) as against 282 days in FY24, FY24 reflecting a one-time year end phenomenon. Acuité believes that the working capital cycle will continue to remain in similar range over the medium term.

Susceptibility of profit margins to the volatility in the foreign exchange 
GKW continues to earn significant portion of revenue from exports, hence, its margins remain exposed to volatility in foreign exchange rate. However, the risk is partially mitigating due to hedging policies adopted by the firm through booking forward contract at the time of the confirmation of the orders thereby mitigating the risk to a large extent. Nevertheless, the foreign exchange fluctuation risk continues to persist due to timing differences.