| Experienced management with long operational track record
Ken Enterprises Limited (KEL) (Erstwhile Ken Enterprises Private Limited), promoted by Mr. Nikunj Hariprasad Bagdiya, Mrs. Bina Hariprasad Bagdiya and Mr. Krishna Hariprasad Bagdiya, have over a decade of experience in the said line of business. The company is the second-generation textile manufacturing enterprise with 40 years of presence in Ichalkaranji, Maharashtra. It is the first weaving mill from Western Maharashtra. The company has international presence in 21 countries for the export of grey fabric (export accounts for ~30 to 35 percent of total sales). The company exports to USA, Kenya, South Korea, Bangladesh, Thailand, Vietnam, Turkey, Mexico and UAE to name a few. The experience of promoters coupled with long track record of operations has enabled the company to forge healthy relationships with customers and suppliers, which in turn has helped in growth of the business.
Augmentation of operating performance
The operating revenue of the group improved to Rs. 490.29 Cr. in FY2025 from Rs 407.39 Cr. in FY2024 as against Rs 372.29 Cr. in FY2023 aided by higher demand from the grey fabric segment and acquisition of new customer base. The operating profit margin improved and stood at 6.44 per cent in FY2025 as against 6.21 per cent in FY2024 and 3.75 per cent in FY2023. The PAT margins have marginally increased to 2.51 per cent in FY2025 as against 2.19 per cent as on FY2024 and 1.01 per cent in FY2023. Further, the revenue in Q1FY2026 improved and stood at Rs. 96.90 Cr. as against Rs.84.10 Cr. in Q1FY2025. The operating profit margin marginally improved and stood at 6.60 per cent in Q1FY2026 compared to 6.10 per cent in Q1FY2025. The PAT margins have improved in Q1FY2026 and stood at 2.60 per cent as compared to 1.73 per cent in Q1FY2025. Acuite believes, the operating performance of the group would improve steadily on the back of addition of new customer base.
Healthy financial risk profile
The group has healthy financial risk profile marked by healthy net worth, gearing and debt protection metrics. KEL’s net worth stood at Rs. 111.60 Cr. as on March 31, 2025 as against Rs. 44.85 Cr. as on March 31, 2024 on account of accretion of reserves and increase in share capital through IPO issue. The group’s gearing stood at 0.32 times as on March 31, 2025 as against 1.07 times as on 31 March, 2024 and 1.38 times as on March 31,2023. The company’s total debt as on March 31,2025 stood at Rs. 35.18 Cr. (comprising of long-term debt of Rs.0.77 Cr, short-term debt of Rs.31.61 Cr.) as against Rs. 47.84 Cr. March 31,2024 and Rs. 49.45 Cr. as on March 31, 2023. TOL/TNW stood at 1.65 times as on March 31, 2025 as against 4.40 times as on March 31, 2024. Interest coverage ratio (ICR) of the group stood at 2.07 times in FY2025 against 1.98 times in FY2024. DSCR stood at 1.37 times in FY2025 against 1.32 times in FY2024. Acuité believes that the financial risk profile of the group will improve on the back of infusion of fresh equity, steady accruals and no major debt funded capex plans.
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| Working capital intensive operations
The group has working capital intensive operations with average gross current assets (GCA) at 197 days during FY2025 as against 205 days in FY2024. Inventory days stood at 102 days in FY2025 against 108 days in FY2024. The group now is moving towards procuring raw material directly from spinning mills instead of traders and hence is required to procure and stock in bulk. The debtor days stood at 85 days in FY2025 against 96 days in FY2024. The average credit period allowed by the group to its customers upto 90 days. The creditor days stood at 135 days in FY2025 against 167 days in FY2024. Further, the reliance on fund based and non-fund-based limits stood moderate at ~87 per cent for last six months ended May 2025. Acuite believes that the working capital operations of the group will remain at similar levels over the medium term given the nature of the industry.
Susceptibility of profitability to volatility in raw material prices, forex risk in an intensely competitive and fragmented industry
Profit margins are highly susceptible to fluctuations in raw material prices, which are influenced by seasonal factors such as monsoon variations, leading to unpredictable cost structures. Additionally, the competitive landscape is intense due to low entry barriers and a fragmented industry structure, which results in significant pricing pressures from peers. This combination of volatile raw material costs and aggressive competition poses a continuous challenge to maintain stable profit margins for companies engaged in manufacturing. The group is exposed to forex risk as export contributes ~ 21 per cent in total sales, the group hedges its forex risk exposure, thus the risk is mitigated to an extent.
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