Press Release March 05, 2025 INDOLINE INDUSTRIES PRIVATE LIMITED Rating Reaffirmed

Product	Quantum (Rs. Cr)	Long Term Rating	Short Term Rating
Bank Loan Ratings	13.50	ACUITE B | Stable | Reaffirmed	-
Bank Loan Ratings	11.50	-	ACUITE A4 | Reaffirmed
Total Outstanding	25.00	-	-
Total Withdrawn	0.00	-	-

Rating Rationale

­Acuite has reaffirmed its long-term rating of ‘ACUITE B’ (read as ACUITE B) and the short-term rating of ‘ACUITE A4’ (read as ACUITE A four) on the Rs.25.00 Cr. bank facilities of Indoline Industries Private Limited (IIPL). The outlook is ‘Stable’. Rationale for Reaffirmation The rating reaffirmation factors the slight improvement in scale of operations, marked by an operating income of Rs.96.29 Cr. in FY2024 as against Rs.88.70 Cr. in FY2023. The EBITDA margin and PAT margin of the company improved and stood at 4.03% and (0.92)% respectively in FY2024 as against (2.74)% and (5.73)% in FY2023. In addition, the financial risk profile of the company is below average as suggested by gearing ratio at 8.26 times as on 31st March 2024, interest coverage ratio and debt service coverage ratio, which stood at 1.94 times and 0.88 times respectively as on 31st March 2024 as against (1.10) times and (0.41) times respectively as on 31st March 2023. The rating derives comfort from the experienced management with over three decades of experience in the furniture industry. However, the rating is partly offset by intensive working capital operations of the company marked by high GCA days and highly competitive nature of the industry.

About the Company

Maharashtra-based, Indoline Industries Private Limited was incorporated in 1987. The company is engaged in manufacturing of all types of wooden furniture including modular kitchens, wardrobes, bedroom furniture, hotel and household furniture. The company also offers various finishes like laminate, acrylic, uv lacquer, pu lacquer, pvc membrane, veneer, solid wood and back painted glass etc. The company is promoted by Mr. Husain Sultan Ali Nensey, Mr. Saif Husain Nensey, Mrs. Nissa Husain Nensey and Mr. Adnan Latif Nensey. The manufacturing facility is located at Ambad, Nashik.

Unsupported Rating

­Not Applicable

Analytical Approach

­Acuité has taken a standalone view of the business and financial risk profile of IIPL to arrive at the rating.

Key Rating Drivers

Strengths

­Experienced management and established track record of operations The promoters, Mr. Husain Sultan Ali Nensey, Mr. Saif Husain Nensey, Mrs. Nissa Husain Nensey and Mr. Adnan Latif Nensey, have over three decades of experience in the said line of business. The extensive experience, coupled with long track record of operations, has enabled the company to forge healthy relationships with customers and suppliers. Acuité believes that the business is expected to benefit from its established presence and extensive experience of the promoters in the industry. Improved scale of operations The company reported operating revenue of Rs.96.29 Cr. in FY2024 as against Rs.88.70 Cr. in FY2023. The company witnessed improvement in the operating margin stood at 4.03 % in FY 2024 against (2.74) % in FY2023 and PAT margin which stood at (0.92) % in FY 2024 as against (5.73) % in FY2023. The improvement is on an account of execution of the order book. Further, the company has clocked an operating income of Rs.68.00 Cr. as on 31st January, 2025. The company is engaged in manufacturing of all types of wooden furniture including modular kitchens, hotel and household furniture along with various finishes like Laminate, Acrylic, UV and PU Lacquer, PVC Membrane, etc. and has orders in hand of Rs.13.46 Cr. as on 30th November, 2024. Going forward, the company is expecting the business risk profile to improve in medium term on the back of execution of the order book.

Weaknesses

Stiff competition from peers The company faces immense competition from its peers due to its presence in a highly competitive and fragmented nature of industry. Below Average Financial Risk Profile The financial risk profile of the company is below average marked by net-worth of Rs.2.09 Crore as on 31st March 2024 as against Rs.2.58 Crore as on 31st March 2023. The decrease in the net-worth is on an account of continuous accumulated losses. Further, the total debt of the company stood at Rs.17.21 Crore as on 31st March 2024 as against Rs.18.76 Crore as on 31st March 2023. The capital structure of the company is marked by gearing ratio of the company which stood at 8.26 times as on 31st March 2024 as against 7.28 times as on 31st March 2023. Further, the coverage indicators of the company are reflected by interest coverage ratio and debt service coverage ratio, which improved and stood at 1.94 times and 0.88 times respectively as on 31st March 2024. The TOL/TNW ratio of the company stood at 28.27 times as on 31st March 2024 as against 21.72 times as on 31st March 2023 and DEBT-EBITDA of the company stood at 4.35 times as on 31st March 2024. Acuité believes that going forward the ability of the company to manage its financial risk profile will remain a key rating sensitivity. ­Intensive Working Capital Operations The working capital operations of the company are intensive marked by GCA days which stood at 176 days as on 31st March 2024 as compared to 183 days as on 31st March 2023. The debtor days of the company stood at 38 days as on 31st March 2024 as against 51 days as on 31st March 2023. Further, the inventory holding stood at 135 days as on 31st March 2024 against 121 days as on 31st March 2023 and the creditor days stood at 186 days as on 31st March 2024 as against 167 days as on 31st March 2023. In addition, the average fund based bank limit utilization of the company stood at 90.47% in last seven months ended October 2024. Acuité expects that the working capital operations of the company will remain at similar levels in near to medium term.

Rating Sensitivities

­Movement in revenue and profitability margins Movement of capital structure and debt protection metrices Working capital cycle

Liquidity Position

Stretched

The liquidity profile of the company is stretched marked by net cash accruals of Rs.0.69 Cr. as on 31st March 2024 as against the debt repayment obligation of Rs.1.06 Cr. over the same period. The gap in the repayment of debt obligation will be met by infusion of additional unsecured loans from the promoters to the tune of Rs.3.90 Cr. in FY2025. Going forward, the company is expected to generate net cash accruals under the range of Rs.1.50 Cr. to Rs.2.25 Cr. against the debt repayment obligations of up to Rs.0.28 Cr. over the same period. The current ratio of the company stood at 0.83 times as on 31st March 2024 as against 0.85 times as on 31st March 2023. Further, the cash and bank balance available with the company stood at Rs.0.05 Cr. as on 31st March 2024. Acuité believes that going forward, the ability of the company to manage its liquidity position will remain a key rating sensitivity.

Outlook: Stable

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Other Factors affecting Rating

­None

Key Financials

Particulars	Unit	FY 24 (Actual)	FY 23 (Actual)
Operating Income	Rs. Cr.	96.29	88.70
PAT	Rs. Cr.	(0.88)	(5.08)
PAT Margin	(%)	(0.92)	(5.73)
Total Debt/Tangible Net Worth	Times	8.26	7.28
PBDIT/Interest	Times	1.94	(1.10)

Status of non-cooperation with previous CRA (if applicable)

­Not Applicable

Interaction with Audit Committee anytime in the last 12 months (applicable for rated-listed / proposed to be listed debt securities being reviewed by Acuite)

Not applicable

Any other information

­None

Applicable Criteria

• 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

­In order to inform the investors about complexity of instruments, Acuité has categorized such instruments in three levels: Simple, Complex and Highly Complex. Acuite’s categorisation of the instruments across the three categories is based on factors like variability of the returns to the investors, uncertainty in cash flow patterns, number of counterparties and general understanding of the instrument by the market. It has to be understood that complexity is different from credit risk and even an instrument categorized as 'Simple' can carry high levels of risk. For more details, please refer Rating Criteria “Complexity Level Of Financial Instruments” on www.acuite.in.

Rating History

Date Name of Instruments/Facilities Term Amount (Rs. Cr) Rating/Outlook 15 Jul 2024 Letter of Credit Short Term 6.00 ACUITE A4 (Reaffirmed & Issuer not co-operating*) Bills Discounting Short Term 2.00 ACUITE A4 (Reaffirmed & Issuer not co-operating*) Working Capital Term Loan Long Term 0.86 ACUITE B (Downgraded & Issuer not co-operating* from ACUITE B+ | Stable) Working Capital Term Loan Long Term 0.64 ACUITE B (Downgraded & Issuer not co-operating* from ACUITE B+ | Stable) Working Capital Demand Loan (WCDL) Long Term 0.21 ACUITE B (Downgraded & Issuer not co-operating* from ACUITE B+ | Stable) Term Loan Long Term 1.07 ACUITE B (Downgraded & Issuer not co-operating* from ACUITE B+ | Stable) Cash Credit Long Term 8.00 ACUITE B (Downgraded & Issuer not co-operating* from ACUITE B+ | Stable) Proposed Long Term Bank Facility Long Term 6.22 ACUITE B (Downgraded & Issuer not co-operating* from ACUITE B+ | Stable) 25 Apr 2023 Letter of Credit Short Term 6.00 ACUITE A4 (Reaffirmed) Bills Discounting Short Term 2.00 ACUITE A4 (Reaffirmed) Working Capital Term Loan Long Term 0.86 ACUITE B+ | Stable (Reaffirmed) Working Capital Term Loan Long Term 0.64 ACUITE B+ | Stable (Reaffirmed) Working Capital Demand Loan (WCDL) Long Term 0.21 ACUITE B+ | Stable (Reaffirmed) Term Loan Long Term 1.07 ACUITE B+ | Stable (Reaffirmed) Cash Credit Long Term 8.00 ACUITE B+ | Stable (Reaffirmed) Proposed Long Term Bank Facility Long Term 6.22 ACUITE B+ | Stable (Reaffirmed) 25 Feb 2022 Bills Discounting Short Term 2.00 ACUITE A4 (Reaffirmed) Letter of Credit Short Term 3.25 ACUITE A4 (Reaffirmed) Term Loan Long Term 0.16 ACUITE B+ (Withdrawn) Proposed Long Term Bank Facility Long Term 12.59 ACUITE B+ | Stable (Reaffirmed) Working Capital Demand Loan (WCDL) Long Term 0.60 ACUITE B+ | Stable (Reaffirmed) Term Loan Long Term 1.69 ACUITE B+ | Stable (Reaffirmed) Term Loan Long Term 0.12 ACUITE B+ | Stable (Reaffirmed) Cash Credit Long Term 3.00 ACUITE B+ | Stable (Reaffirmed) Working Capital Term Loan Long Term 1.11 ACUITE B+ | Stable (Reaffirmed) Working Capital Term Loan Long Term 0.64 ACUITE B+ | Stable (Reaffirmed)

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Annexure - Details of instruments rated

Lender’s Name ISIN Facilities Date Of Issuance Coupon Rate Maturity Date Quantum (Rs. Cr.) Complexity Level Rating Indian Bank Not avl. / Not appl. Bank Guarantee (BLR) Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 0.50 Simple ACUITE A4 | Reaffirmed Indian Bank Not avl. / Not appl. Cash Credit Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 7.00 Simple ACUITE B | Stable | Reaffirmed Indian Bank Not avl. / Not appl. Letter of Credit Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 11.00 Simple ACUITE A4 | Reaffirmed Not Applicable Not avl. / Not appl. Proposed Long Term Bank Facility Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 5.09 Simple ACUITE B | Stable | Reaffirmed Indian Bank Not avl. / Not appl. Working Capital Demand Loan (WCDL) Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 0.46 Simple ACUITE B | Stable | Reaffirmed Indian Bank Not avl. / Not appl. Working Capital Term Loan 27 May 2021 Not avl. / Not appl. 26 May 2025 0.58 Simple ACUITE B | Stable | Reaffirmed Indian Bank Not avl. / Not appl. Working Capital Term Loan 31 Dec 2021 Not avl. / Not appl. 30 Dec 2026 0.37 Simple ACUITE B | Stable | Reaffirmed

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Contacts

Mohit Jain Senior Vice President - Rating Operations Archita Sharma Associate Analyst - Rating Operations	Contact details exclusively for investors and lenders Mob: +91 8591310146 Email ID: analyticalsupport@acuite.in

About Acuité Ratings & Research

Acuité is a full-service Credit Rating Agency registered with the Securities & Exchange Board of India (SEBI). The company received RBI Accreditation as an External Credit Assessment Institution (ECAI) for Bank Loan Ratings under BASEL-II norms in the year 2012. Acuité has assigned ratings to various securities, debt instruments and bank facilities of entities spread across the country and across a wide cross section of industries. It has its Registered and Head Office in Kanjurmarg, Mumbai. Disclaimer: An Acuité rating does not constitute an audit of the rated entity and should not be treated as a recommendation or opinion that is intended to substitute for a financial adviser's or investor's independent assessment of whether to buy, sell or hold any security. Ratings assigned by Acuité are based on the data and information provided by the issuer and obtained from other reliable sources. Although reasonable care has been taken to ensure that the data and information is true, Acuité, in particular, makes no representation or warranty, expressed or implied with respect to the adequacy, accuracy or completeness of the information relied upon. Acuité is not responsible for any errors or omissions and especially states that it has no financial liability whatsoever for any direct, indirect or consequential loss of any kind, arising from the use of its ratings. Ratings assigned by Acuité are subject to a process of surveillance which may lead to a revision in ratings as and when the circumstances so warrant. Please visit our website (www.acuite.in) for the latest information on any instrument rated by Acuité. Please visit https://www.acuite.in/faqs.htm to refer FAQs on Credit Rating. Note: None of the Directors on the Board of Acuité Ratings & Research Limited are members of any rating committee and therefore do not participate in discussions regarding the rating of any entity.