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| Product | Quantum (Rs. Cr) | Long Term Rating | Short Term Rating |
| Bank Loan Ratings | 157.09 | ACUITE A- | Stable | Reaffirmed | - |
| Bank Loan Ratings | 27.91 | Not Applicable | Withdrawn | - |
| Bank Loan Ratings | 10.35 | - | ACUITE A2+ | Reaffirmed |
| Total Outstanding | 167.44 | - | - |
| Total Withdrawn | 27.91 | - | - |
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Rating Rationale |
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Acuite has reaffirmed its long-term rating of 'ACUITE A-' (read as ACUITE A minus) and short-term rating of 'ACUITE A2+' (read as ACUITE A two plus) on Rs.167.44 Cr. bank facilities of GRG Global Textiles Limited (GGTL). The outlook is 'Stable'.
Acuite has also withdrawn long-term rating on the Rs.27.91 Cr. bank facilities of GRG Global Textiles Limited (GGTL) without assigning any rating as these are proposed facilities. The withdrawal of ratings is as per the Acuite's policy on withdrawal of rating as applicable to the respective facility / instrument. The rating is being withdrawn on account of request received from the company. Rationale for rating reaffirmation: The reaffirmation of rating continues to draw comfort from the steady business risk profile along with the experience of its promoters. Further, the rating also draws comfort from the long-term supply agreement with Welspun Living Limited (WLL) which ensures stable revenue and low demand risk. The rating further considers the efficient working capital management along with moderate financial risk profile and adequate liquidity position. The above-mentioned strengths were partially constrained by the limited operational track record, high customer concentration risk and GGTL's growth linked to WLL's performance in home textile segment. However, this risk is partially mitigated as GGTL is diversifying its customer base, as mutually agreed with WLL to allow sales of more than 10% to third-party clients. |
| About the Company |
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GRG Global Textiles Limited (GGTL) was incorporated in October, 2020. GGTL is engaged in manufacturing of Greige fabric for Bed Sheets and two-for-one (TFO) yarn and has established its manufacturing facility in Anjar, Gujarat. Which has installed capacity to produce 13054 MT P.A of TFO yarn and 26.46 million Meters of Fabric. The company directors are Mr. Alok Kumar Tripathi, Mr. Deepak Jain, Mr. Arvind Kumar Tuteja, Mr. Shashi Kant Goenka and Mr. Samta Goenka.
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| Unsupported Rating |
| Not Applicable |
| Analytical Approach |
| Acuité has considered the standalone business and financial risk profile of GGTL to arrive at this rating. |
| Key Rating Drivers |
| Strengths |
| Experienced Promoters albeit limited operational track record
GRG Global Textiles Limited (GGTL) is a part of the GRG group which is incorporated in the year 2020. GRG Group is promoted by Mr. Shashikant Goenka and Mrs. Samta Goenka. The promoters have more than two decades of experience in the textiles industry. Acuité believes that GGTL draws strength from the experience and competence of the experienced management. Strong Counter Party Welspun Living Limited (WLL), a flagship textile company of Welspun Group, is presently concentrating in manufacturing of cotton-based products viz. Terry Towels, Bed Sheets, Pillow Covers, Top of the Bed, Bath Rugs etc. With global reach of more than 60 countries, the company is the largest exporter of home textile products from India. The company has excellent relationship with the likes of Wal-Mart, JC Penney, Shopko, Calvin Klein etc. to which it has been a regular supplier. GGTL's performance is directly linked with the product demand for WLL' products as the company has long-term agreement with WLL for purchase of its 90 percent production. Steady scale of operations and profitability margins The company witnessed steady scale of operations marked by revenue of Rs. 554.36 Cr. in FY25 as compared to Rs. 521.05 Cr. in FY24. Further, the company booked revenue of Rs. 286.33 Cr. in H1FY26 due to healthy orders from WLL and third-party customers. The operating profit margin stood range bound atbound at 6.32 percent in FY25 as compared to 6.41percent in FY24. Further, the PAT margin stood at 1.12 percent in FY25 as against 1.84 percent in FY24. Acuite expects GGTPL to sustain its performance over the medium term, supported by its supply agreement with Welspun and mutually agreed terms that permit sales to reputed third-party consumers. This flexibility enables GGTPL to diversify its customer base, thereby mitigating dependency risk on WLL. Efficient working capital operations: The working capital operations of GGTPL are efficiently managed as evident from the gross current asset (GCA) days of 56 days in FY25 as compared to 78 days in FY24. The company receives batch wise orders from WLL and maintains inventory required for next 30 days. The payment terms customers, especially with WLL was provided for 30 days, which is as per the terms of supply agreement with WLL, resulting less than 30 days debtors. The company has receivable days of 12 days in FY25 as compared to 15 days in FY24. The company does not maintain any fund-based working capital limits and has utilized approximately 80% of its sanctioned non-fund-based limits during the previous month. Acuite expects, the lower receivable period and inventory holding period with stretched payables period will help GGTPL to maintain its working capital operations efficient. |
| Weaknesses |
| Moderate financial risk profile
GGTPL’s financial risk profile is moderate, marked by moderate net worth, moderate gearing and above average debt protection metrics. The company’s net worth stood at Rs. 86.08 Cr as on March 31, 2025, against Rs. 79.66 Cr. as on March 31, 2024 due to accretion of profits to reserves during the period. The gearing (debt to equity) and total outside liabilities to tangible net worth (TOL/TNW) stood at 1.95 times and 2.54 times as on March 31, 2025 respectively, against 2.38 times and 3.59 times respectively as on March 31, 2024. The improvement in leverage indicators is due to reduction in total debt levels to Rs. 167.64 Cr as on March 31, 2025 from Rs. 189.69 Cr as on March 31, 2024. The debt protection metrics stood above average with debt service coverage ratio (DSCR) and interest coverage ratio (ICR) of 1.22 times and 5.70 times respectively as on March 31, 2025. Debt to EBITDA improved to 4.67 times as on March 31, 2025 from 5.56 times as on March 31, 2024. Acuite believes that the financial risk profile of the company will improve over the medium term due to no major debt funded capex. High customer concentration risk GGTL’s growth linked to the performance of WLL, GGTL will remain exposed to the high customer concentration risk in its revenue profile as majority of the revenue will be from WLL through the off-take agreement signed. GGTL has signed an off-take agreement for 90 percent of its production to WLL for their captive consumption. GGTL is entitled to sell 10 percent of its production to any third party. In the event, WLL does not place the order or place short order and if GGTL fails to sell it in the open market within 15 days, then WLL will be liable to pay for such unsold quantity of Products at the prevailing Market Price plus 12 percent simple interest for the period of delay. Acuité believes that GGTL will remain exposed to high customer concentration risk over the long run post SCOD as any uncertain event/lower demand in WLL’s end products might result in direct impact on GGTL’s scale and profitability. Howbeit, this risk is to the extent offset by factors such as products being general in nature, offtake agreement of GGTL stating open sale to other customers in case WLL not to procure the committed offtake and WLL being a healthy cash profit generating company and is a market leader in home textile, exhibiting low demand risk. GGTL’s growth remains closely linked to WLL’s performance in the home textile segment, exposing it to high customer concentration risk as the company has signed an off-take agreement for 90 percent of its production with WLL. GGTL can sell 10% of its output to third parties, and in case WLL fails to procure the committed quantity, it is liable to pay for unsold products at market price plus 12% simple interest for the delay. Acuité believes this risk persists over the long term post-SCOD, as any uncertainty or lower demand for WLL’s end products could directly impact GGTL’s scale and profitability. However, this risk is partially mitigated by factors such as the general nature of GGTL’s products, WLL’s strong market position and healthy cash flows, and the flexibility to sell in the open market if WLL does not procure. Additionally, amid lower US demand following tariff hikes, WLL’s procurement has declined, prompting GGTL to diversify its customer base by securing orders from reputed third-party clients like Alok Industries, Arvind Limited, and Indo Count Industries. As mutually agreed with WLL, GGTL can now sell more than 10% of its production to external customers, providing greater flexibility and reducing dependency risk. |
| Rating Sensitivities |
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Sustain improvement in revenue and profitability margins
Any deterioration in the financial risk profile Changes in Working capital management |
| Liquidity Position |
| Adequate |
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GGTPL’s liquidity position is adequate as reflected in sufficient net cash accruals against the repayment obligations. The company registered NCA’s of Rs.28.37 Cr as on March 31, 2025, against the debt obligation of Rs.22.20 Cr. for the same period. However, presence of DSRA reserve equivalent to one quarter’s principal & interest obligations will provide comfort towards liquidity. Additionally, the efficient working capital operations along with unencumbered cash and bank balances of Rs.1.96 Cr. as on March 31, 2025 which will further support the liquidity position of the company. The current ratio stood at 1.30 times as on March 31, 2025. Acuite believes that the liquidity position of the company will remain adequate over the medium term on account of sufficient cash accruals against repayment obligations and efficient working capital operations.
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| Outlook: Stable |
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| Other Factors affecting Rating |
| None |
| Particulars | Unit | FY 25 (Actual) | FY 24 (Actual) |
| Operating Income | Rs. Cr. | 554.36 | 521.05 |
| PAT | Rs. Cr. | 6.23 | 9.58 |
| PAT Margin | (%) | 1.12 | 1.84 |
| Total Debt/Tangible Net Worth | Times | 1.95 | 2.38 |
| PBDIT/Interest | Times | 5.70 | 47.64 |
| Status of non-cooperation with previous CRA (if applicable) |
| Not applicable |
| Any other information |
| None |
| Applicable Criteria |
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• Default Recognition :- https://www.acuite.in/view-rating-criteria-52.htm • Manufacturing Entities: https://www.acuite.in/view-rating-criteria-59.htm • Application Of Financial Ratios And Adjustments: https://www.acuite.in/view-rating-criteria-53.htm |
| Note on complexity levels of the rated instrument |
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