| Established track record of operations and experienced management
JI has an operational track record of over five decades in manufacturing and processing of psyllium husk and powder. The group was established in 1972 by Late Mr. Jyotindra Modh and is currently managed by the second generation of the Modh family. The extensive experience of the management has helped the group in establishing long standing relations with its customers and suppliers thereby securing stable orderflow from clients.
Acuité believes that JI will continue to benefit from its experienced management and established track record of operations.
Growing operating performance
The revenue of the group improved to Rs. 334.96 Cr. in FY2024 from Rs. 284.34 Cr. in FY2023, with y-o-y growth of ~18 percent. In FY2024, the prices of psyllium seeds had increased significantly as there was shortage of the same due to unseasonal rains in some areas under cultivation. Therefore, while the volumes were affected due to low availability, the high realisations led to growth in the FY2024 revenue. The prices stabilised in FY2025 with ample availability; therefore, group recorded a revenue of Rs 366.51 Cr. till 11M FY2025. Further, the EBITDA margins improved to 4.09 percent in FY2024 from 2.65 percent in FY2023 due to decline in the overall selling costs of the group. Moreover, the EBITDA margin is expected to remain rangebound at around 4-5% owing to pass through of raw material volatility. The PAT margin however stood declined at 1.52 percent in FY2024 as against 1.96 percent in FY2023 due to increase in the finance cost of the group.
Going forward, growth in the scale of operations while maintaining profitability margins will be a key rating sensitivity.
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| Average financial risk profile
The financial risk profile of the group is average, with moderate networth, moderate gearing and average debt protection indictors. While the net worth improved to Rs. 26.11 Cr. on March 31, 2024 as against Rs. 23.35 Cr. on March 31, 2023, the substantial increase in the working capital debt levels of the group led to deterioration in the gearing to 2.81 times on March 31, 2024 from 2.14 times on March 31, 2023. The increased debt levels have also affected the Debt-EBITDA levels, which stood high at 5.18 times on March 31, 2024 as against 4.72 times on March 31, 2023. The debt protection indicators also moderated with interest coverage ratio (ICR) at 2.24 times in FY2024 as against 3.03 times in FY2023 and debt service coverage ratio (DSCR) at 1.92 times in FY2024 as against 2.85 times in FY2023. Further, in FY25 JIPL has availed debt of Rs 2.9 Cr. towards development of solar plant and equipment purchase.
The financial risk profile of the group is expected to remain on similar levels in the medium term on account of working capital limit utilization.
Intensive working capital operations
The operations of the group are working capital intensive with Gross Current Assets (GCA) of 93 days on March 31, 2024 as against 69 days on March 31, 2023 due to increase in the inventory days which stood at 59 days on March 31, 2024 as against 39 days on March 31, 2023. This increase in the inventory was on account of decline in the sales volume of JI, which led to inventory pile up. There was also an increase in the debtor days, which stood at 30 days on March 31, 2024 as against 24 days on March 31, 2023. The group’s majority procurement of raw materials and processing of the same is done during the peak period i.e April – July, therefore, the bank limit utilization during the same is on a higher side between 80 – 90 percent. Further, The bank limit utilization stood at 70.78 percent for the last six months ended February 2025. Going forward, restriction of further elongation in the working capital cycle will be a key rating sensitivity.
Susceptibility of operating performance to seed availability and volatility in the raw material prices
Psyllium seeds is the major raw material for the group. It being an agricultural produce, the availability and pricing of the same depends upon various factors such as monsoon during the year, area under cultivation, demand domestically and internationally along with various other factors. Any change in the monsoon/climate conditions may interrupt the supply of psyllium and also affect the prices of the seeds.
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