­Experienced management and established track record of operations with reputed clientele
The Mumbai-based Oceanic Group was incorporated by Mr. Manoj Khetan and family. The promoters possess over three decades of experience in the trading business. The extensive experience of the promoters has helped the group to established strong ties with its suppliers and customers. The group caters to renowned cement manufacturing companies, including Ultratech Cement Ltd., Dalmia Cement Ltd., JK Cement Ltd., Ramco Cement Ltd., amongst others.

Acuité believes that the group will continue to benefit from its experienced management and established relationships with both customers as well as suppliers in the medium term.

Moderate financial risk profile
OG’s financial risk profile improved and overall stood moderate marked by moderate net worth, debt protection metrics and below unity gearing. The net worth stood improved to Rs. 84.66 Cr. as on March 31, 2025 (Prov.) against Rs.70.50 Cr. as on March 31, 2024 primarily on account of accretion of profits into reserves. The gearing also improved and stood below unity at 0.94 times as on March 31, 2025 (Prov.), against 1.23 times as on March 31, 2024. Further, owing to reduction in  working capital debt  the interest coverage ratio improved to 7.73 times in FY2025 (Prov.) against 4.65 times  FY2024 and debt service coverage ratio also improved to 5.60 times in FY2025 (Prov.) against 3.53 times in FY2024.

Going ahead, the financial risk profile of the company is expected to remain moderate over the medium term on account of steady operating performance and absence of debt funded capex plan over the medium term.

Efficient working capital management
OG maintains an efficient working capital cycle, with gross current asset days at 77 days in FY2025 (Prov.)  (86 days in FY2024), driven by debtor and inventory days of 23 days and 49 days, respectively. The group typically receives 90% of payments within 7 days of dispatch and the remaining 10% within 30 days. Earlier, OG used to make 100% advance payments to its suppliers. However, now they receive the credit period in the range of 15-20 days from the suppliers. Therefore, the average bank limit utilization of the group stood low at ~30.60% in the past six months ended March 2025.

Going ahead, the working capital operations of the group are expected to remain at the similar levels over the medium term.

­Declining trend in the topline albeit marginal improvement in the bottom line over the past three fiscal years
The group’s revenue declined over the last three years, falling to Rs.816.82 Cr. in FY2025 (Prov.) from Rs.965.99 Cr. in FY2024 and Rs.1,017.85 Cr. in FY2023. This moderation primarily stems from the discontinuation of customer-reimbursed transport charges and the absence of cement clinker and sulphur orders in FY2025. Despite this, margins have seen modest improvement, with PAT rising to 2.09% in FY2025 (Prov.) from 1.81% in FY2024 and 1.73% in FY2023, while operating margins remained stable between 3.0 - 3.5 %.

Going ahead, sustained growth in revenue while maintaining profitability margins will remain a key monitorable.

­Vulnerability of profitability owing to volatility in cement prices
The profitability margins of the group are susceptible to volatility in gypsum and clinker prices in the international market as the group imports 100 percent of its traded goods from Middle Eastern countries. Therefore, significant changes in prices of gypsum and clinkers may impact the margins of the group.

Susceptibility to cyclicality nature of industry and competitive nature of industry
The group engaged in trading business of gypsum, clinker and laterite to the top cement manufacturers of the country. The cement consumption is majorly dependent upon the economic activities taking place in and around the country. The end user industry being infrastructure and real state, any significant slowdown in these industries will impact the demand of cement and will impact the revenues of the group. Further, the firm competes with various players in the organized and unorganized segments in the gypsum trading industry, thus limiting the pricing power.