­Extensive experience of the management:
The promoters, Mr. Shirpal Sanghvi has over 35 years’ experience as an FMCG distributor in Tamil Nadu region, while Mr. Amit Agarwal has extensive experience in managing manufacturing operations. Mr. Sidharth Mehta contributes strong expertise in finance. The collective experience of the promoters coupled with their deep understanding of market dynamics aided in significant growth of JGFL’s revenue over the past three years, which grown at a compound annual growth rate (CAGR) of ~26 percent. Acuite expects, the extensive experience of the management wil benefit the business and financial risk profile of JGFL over the medium term.

Stable growth in operations:
JGFL registered revenue of Rs.763.37 Cr. in FY2025 against Rs.629.83 Cr. registered in FY2024, driven by higher capacity utilization and improved realizations. During H1FY2026, the company registered revenue of Rs.381.28 Cr. against Rs.375.68 Cr. registered during H1FY2025 and expected to register revenue in the range of Rs.780—790 Cr. for FY2026. The steady growth in revenue is due to increase in capacity utilization and stable demand for the products. The company is primarily engaged in pulses processing, which offers limited value addition, albeit higher than trading activities. The operating profit margin remained stable at 5.48 percent in FY2025 against 5.34 percent in FY2024, while PAT margin improved marginally to 2.89 percent from 2.40 percent over the same period. During H1FY2026, the company registered operating profit margin of 5.33 percent, and it is expected to remain in the similar level in the near-term. Acuite believes, the operating performance of the company would improve steadily over the near term with expected improvement in capacity utilization.

Efficient working capital operations:
JGFL’s working capital operations are efficiently managed as reflected through the gross current (GCA) of 75 days in FY2025 against 74 days in FY2024. The company has diversified procurement network, sourcing raw materials from multiple players which mitigates supplier concentration risk. Although the raw material i.e chickpeas a seasonal crop, they are available throughout the year due to storage and processing, ensures steady supply in the market. This helped in maintaining a lean inventory of raw materials at 30-40 days over the past three years. JGFL extends a credit period of 30-60 days to its customers and pays the suppliers upfront which helps for discounts, resulting lower creditor days. The company’s fund based working capital limits were reduced to Rs.45.00 Cr from Rs.65.00 Cr, leading to a higher average utilization of around 89 percent over the past 12 months ending December 2025. Acuite expects the working capital management to remain efficient over the medium term on account of the lean inventory levels and limited credit period.

Healthy financial risk profile:
JGFL’s financial risk profile is healthy marked by healthy net worth, low gearing and healthy debt protection metrics. The net worth of the company increased to Rs.167.33 Cr. as on March 31, 2025 from Rs.80.22 Cr. as on March 31, 2024, due to accretion of profits along with increase in paid up share capital by Rs.6.04 Cr. and securities premium reserve by Rs.67.71 Cr. on account of proceeds from initial public offer (IPO) issued during FY2025. The total debt (comprising Rs.18.59 Cr. on long-term debt, short-term debt of Rs.47.70 Cr. and current maturities of Rs.4.59 Cr.) decreased to Rs.70.88 Cr. as on March 31, 2025 from Rs.96.21 Cr. as on march 31, 2024. The improved networth position and declined debt levels resulted in improvement in gearing level to 0.42 times as on March 31, 2025 from 1.20 times as on March 31, 2024. Total outside liabilities to tangible net worth (TOL/TNW) also improved marginally to 0.52 times as on March 31, 2025 against 1.40 times as on March 31, 2024. The debt protection metrics stood healthy with DSCR and ICR of 2.27 times and 4.48 times respectively as on March 31, 2025. Debt to EBITDA also improved to 1.69 times as on March 31, 2025 against 2.86 times. Acuite believes that the financial risk profile of the company wil remain healthy owing to healthy networth position and expected reduction in debt levels.

­Thin profit margins exposed to volatility in input prices
JGFL's operating profit margins have remained in the range of 4.5-5.5 over the past four years. As the company is primarily engaged in grain processing, which has limited value addition, thereby resulting in thin profit margins. The company's profitability is further constrained by the presence in intense industry competition, which restricts pricing power. Although revenue levels have been improving steadily, the limited margins translates into modest cash accruals, thereby limiting financial flexibility. Acuite believes, that any sustained improvement in the operating margins will be a key rating monitorable.

Agro climatic risk and government regulations
The company remains exposed to agro-climatic risks, as the availability, quality and pricing of key agri-based raw materials are inherently dependent on unpredictable factors such as monsoons, temperature variations and seasonal fluctuations. Any adverse climatic conditions can directly impact raw material procurement and cost structures. Additionally, the industry is subject to stringent government regulations related to food safety, procurement, storage and pricing controls. Changes in policy frameworks, imposition of stock limits or restrictions on movement and trade of agricultural commodities could materially influence profitability.