­Established track record of operations and experienced management
IDPL was incorporated in the year 1996, however, the business was started in the year 1981 under a proprietorship concern headed by Mr. Jayesh Dave. Currently, the company is managed by Mr. Jayesh Dave and Ms. Palak Dave, who have been engaged in the home furnishing industry for around three decades. The extensive experience of the promoters and established track record of operation has helped the company to maintain healthy relationships with its customer and suppliers.

Acuite believes that the company will continue to benefit from its experienced management and long track record of operations.

Average financial risk profile
Financial risk profile of IDPL is average marked by modest net worth, low gearing, and comfortable debt protection metrics. The net worth of the company stood at Rs.15.89 Cr. as on 31 March 2024 as against Rs.15.65 Cr. as on 31 March 2023. The gearing level of the company stood low at 0.81 times as on 31 March 2024 as against 0.82 times as on 31 March 2023. Interest Coverage Ratio (ICR) stood moderate at 2.25 times for FY2024 against 2.31 times for FY2023. Debt Service Coverage Ratio (DSCR) stood moderate at 1.36 times for FY2024 against 1.28 times for FY2023.

Acuité believes that the financial risk profile of the company is likely to remain moderate in the absence of major debt funded capital expenditure plan in near term.

Modest Scale of Operations
The operations of IDPL remained moderate with the revenue of Rs.23.98 Cr. in FY2024 as against Rs.16.96 Cr. in FY2023. Further, the company has achieved revenue of Rs.16.99 Cr in 8MFY2025.

Acuite believes that the scale of operations of the company would remain modest in the medium term.

Working Capital Intensive Operations
Working capital operation of the company remained intensive marked by Gross Current Asset (GCA) days at 335 days as on March 31, 2024, as against 430 days as on March 31, 2023. The inventory levels stood at 248 days in FY2024 when compared against 269 days in FY2023. The debtor days stood at 76 days in FY2024 as compared against 150 days in FY2023. The creditor days stood at 22 days in FY2024 as against 50 days in FY2023. The average utilization of the bank limits of the company stood moderate at ~70.80% for the last 06 months ending November 2024.

Acuite believes that the ability of the company to efficiently manage its working capital requirements will remain a key rating sensitivity.
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Susceptibility of profitability to volatility in raw material prices in a highly fragmented and competitive Industry
IDPL operates in a highly competitive and fragmented home textile industry wherein the product belongs to niche segment. Presence of several organized and unorganized players in the market limits the bargaining power of the company. However, long track record of operation and extensive experience of the promoters helps the company in mitigating the risk to an extent.

One of the key raw materials for IDPL is a grey fabric and transfer paper. The company also imports some of its raw materials from Germany. Due to fluctuating raw material prices the company purchases raw materials in bulk which benefits them with reduced cost However, the profitability margins remained susceptible to stiff competition and volatility in raw material prices which is evident in the declining operating margins which stood at 8.38 per cent in FY2024 as against 11.13 per cent in FY2023 and 12.16 per cent in FY2022.

Acuite believes, the ability of the company to improve its profitability margins amidst competitive industry would remain as a key rating sensitivity.