| Experienced promoters and longstanding relationship with reputed customers
G B group has been able to establish a long and healthy relationship with its customers and suppliers owing to the promoter’s rich experience and the long track record of operations of over 4 decades. The group serves a diverse range of industries, such as automotive, industrial, oil and gas, aviation, food and beverages, chemicals, defence, engineering, and technology. The major demand comes from the automobile industry.
The group maintains a global presence mainly in USA and Germany that constituted 50% of its export revenue. Additionally, during the year, G B Gummi LLP added one export customer from UAE. In FY2026 (Prov.), the group's export revenue was ~ Rs. 19.09 Crore, representing its global presence and associated with healthy margins. Acuite believes the group will be benefitted from promoters experience and diversified geographical presence with broad product portfolio.
Healthy scale of operations
The group's operating income increased by ~16% to Rs. 202.94 crore in FY2026 (Prov.) from Rs. 175.10 crore in FY2025, supported by healthy demand from end-user industries, particularly the automobile segment, along with a steady order book providing revenue visibility. Despite the growth in revenues, the scale of operations remains modest, which continues to constrain the group's business risk profile to an extent.
Profitability witnessed a notable improvement during the year, with operating margins increasing to 15.42% in FY2026 (Prov.) from 11.14% in FY2025, driven by favourable product mix and cost control measures. The group's profitability is expected to receive further support from lower power costs, supported by the 1.60 MW windmill operated by G B Rubber Products. The group plans to utilise the entire power generated for captive consumption from September 2026 onwards and expects to reduce dependence on electricity procured from the MSEB grid at commercial tariff rates and result in annual cost savings of ~Rs. 2 crores. Additionally, G B Gummi LLP's manufacturing facility enjoys strategic proximity to major ports and airports, facilitating efficient logistics and supporting its export operations.
The group's PAT margin increased to 8.65% in FY2026 (Prov.) from 5.40% in FY2025. Consequently, ROCE stood at 28.52% in FY2026 (Prov.) as against 16.06% in FY2025. Going forward, Acuite believes the group is likely to witness steady growth in its scale of operations over the near to medium term, aided by enhanced capacities, power savings, and continued demand from its key end-user industries.
Moderate Financial Risk profile
The group’s financial risk profile remains moderate marked by increase in networth, gearing below unity and comfortable debt protection metrics. The tangible net worth of the group stood at Rs.90.67 Cr as on March 31, 2026(Prov.) as against Rs.68.46 Cr as on March 31, 2025, due to accretion of reserves. Any sizeable partner withdrawals, particularly those routed towards investments in sister concerns, will remain a key monitorable. The gearing stood below unity at 0.15 times in FY26 (Prov.) as against 0.30 times in FY25. The debt protection metrics remained comfortable marked by interest coverage ratio (ICR) of 14.13 times and debt service coverage ratio (DSCR) of 7.93 times for as on March 31, 2026 (Prov.). Further, the net cash accruals to total debt (NCA/TD) stood at 1.75 times and Total Outside Liabilities/Tangible Net Worth (TOL/TNW) stood at 0.48 times as on March 31, 2026 (Prov.). Going forward, the financial risk profile of the group is expected to remain on similar levels supported by comfortable capital structure even despite having a capex plan.
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| Intensive working capital cycle
The working capital cycle of the group remains intensive marked by Gross Current Assets (GCA) of 147 days as on 31st March 2026 (Prov.) as against 144 days as on 31st March 2025. The inventory days of the group stood at 48 days as on 31st March 2026 (Prov.) as against 44 days as on 31st March 2025, primarily due to higher stocking of raw rubber to mitigate potential global supply chain disruptions and ensure uninterrupted supplies to export customers, considering the approximately three-week production cycle.
Further, the debtor days of the group stood at 76 days as on 31st March 2026 (Prov.) as against 84 days as on 31st March 2025. The group generally extends credit of around 60 days to its customers. However, in the case of inter-group transactions, G B Gummi LLP extends a credit period of 60-90 days to G B Rubber Products.
Against this, the group has creditors which stood at 77 days as on March 31, 2026 (Prov.) as against 103 days as on March 31, 2025. Acuite believes that the working capital cycle of the group will remain on similar levels over the medium term.
Susceptibility of profitability to fluctuations in raw material prices
Operating margins of the group are susceptible to changes in rubber and carbon black prices, which are highly volatile in nature. Any abrupt change in raw material prices can lead to distortion in market prices and affect the profitability of players. However, the risk is mitigated to an extent on the back of repeat orders and relationships with its customers over a long period of time.
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