­Experienced management and established track record of operation
KCCPL was established in 1978. The company is led by its Managing Director & CEO, Mr Hamish Shahani along with other directors which include Mr. Shreedhar Anehosur – Director and Chief Operating Officer and Mr. Stephan Maerz, representing Syntegon and also providing technical expertise. The company’s long track record of operation of more than four decades has helped in developing and maintaining healthy relations with its customers like Amneal group, Bharat Biotech, Cipla, Cadila Healthcare, Dr. Reddy’s Laboratories, Glenmark, Intas Pharmaceuticals, Sun Pharma, Sanofi & Serum Institute of India Ltd to name a few. It has also maintained a long-standing relationship with its vendors and suppliers.
Acuité believes that the company will continue to benefit from the management’s experience and its association with reputed clients to sustain its business risk profile in the near to medium term.

Healthy financial risk profile
The financial risk profile of the company is healthy, marked by improving networth, low gearing ratios and healthy debt protection metrics. The net worth of the company stood at Rs. 74.27 Cr. as on March 31, 2024, as against Rs. 69.07 Cr. as on March 31, 2023. This reduction in net worth is attributed to a dividend payment of ~ Rs. 18.78 Cr. made to shareholders. The total debt of the company stood at Rs. 22.14 Cr. as on March 31, 2024, as against Rs.14.71 Cr. as on March 31, 2023. The total debt of Rs. 22.14 Cr. as on March 31, 2024, consist of long-term debt of Rs. 1.27 Cr, short-term debt of Rs. 20.06 Cr. and maturing portion of long-term borrowings of Rs. 0.82 Cr. The gearing of the company stood low at 0.30 times as on March 31, 2024, as compared to 0.21 times as on March 31, 2023. The Debt- EBITDA of the company stood at 0.61 times as on March 31, 2024, as against 0.34 times as on March 31, 2023. The company has healthy debt protection metrics with Interest coverage ratio (ICR) and debt service coverage ratio (DSCR) of 27.02 times and 16.52 times respectively in FY2024 as against 31.30 times and 23.96 times respectively in the previous year.
Acuité believes that the financial risk profile of the company is expected to remain at the similar level over the medium term.

Moderation in operating performance in FY2024 albeit expected improvement in the near term
The company maintains a strong presence in both domestic and international market, with ~65% of its total revenue in FY2024 derived from international market. Its key export destinations include the USA, China, Germany, Thailand, Lebanon, Saudi Arabia, Malaysia, Vietnam, and Turkey. Domestically, the company operates in major metropolitan cities such as Mumbai, Pune, Delhi, Kolkata, Chennai and Hyderabad.
However, in FY2024, the company’s operating income declined to Rs. 165.00 Cr. from Rs. 176.29 Cr. in FY2023. This reduction in due to client postponing their machine procurement in the month of march due to project delays. In 11MFY25, the company reported revenue (excluding GST) of ~Rs. 147 Cr. Further, the company holds an order book worth Rs. 179.42 Cr. as on November 30, 2024. The operating margin for FY2024 declined to 18.62%, from 24.30% in FY2023, primarily due to increase in employee cost and legal and professional fees. Further, the Profit After Tax (PAT) margin decreased to 14.51% in FY2024 compared to 16.59% in FY2023.
Going ahead, the ability of the company to sustain improvement in the operating income and profitability margins will remain a key monitorable.

Intensive nature of working capital operations
The working capital operations of the company are intensive in nature, with GCA extending to 315 days in FY2024 as against 255 days in FY2023. This increase is driven mainly by increase in Indirect tax balances with tax authorities of Rs. 6.20 Cr. in FY2024 as against Rs. 4.24 Cr. in FY2023. The inventory holding period extended to 61 days on 31st March 2024 as compared to 53 days on 31st March 2023.The debtor days increased and stood at 182 days in FY2024, compared to 167 days in FY2023. The creditor days stood at 113 days in FY2024, as against 88 days in FY2023. Further, the reliance on working capital limits remained moderate with average utilisation of fund-based limits at ~74.77% over the past six months ending Feb 2025.
Going forward, Acuite believes the working capital operations of the company will remain intensive due to the nature of the business of the company.

Margins susceptible to raw material and foreign exchange fluctuation risk
The company’s major raw material being steel, its margins are susceptible to raw material price fluctuations. However, since the purchase of steel is spread over a period of time, the average pricing does help. Further, the company’s exports accounted for ~65 per cent of its revenues for FY2024. The exports are mainly to countries like USA, China, Germany, Thailand, Lebanon, Saudi Arabia, Malaysia, Vietnam, Turkey, hence having an earning mix of Dollars and Euros. Due to these transactions, the company’s margins are susceptible to foreign exchange fluctuation, though it gets covered by natural hedge.