Benifitted from Experianced Management:
KTAI, established in 2013 by Mr. B. Prasad and other partners, benefits from the promoters’ strong agricultural background and over two decades of experience in the sector. Their local presence and strong customer network have supported revenue growth and business stability. Acuité believes that KTAI is well-positioned to leverage its proximity to paddy- growing regions and rice mundis, along with the promoters’ experience and network, to strengthen its business risk profile over the medium term.

Improvement in Operating Performance with variability in margin:
The firm reported revenue of Rs.38.38 crore in FY2025 compared toRs.36.85 crore in FY2024 with lower sales volumes in FY24 and FY25 due to the government’s export ban on non-basmati rice, which indirectly impacted revenue as the firm sells to local traders in Karnataka, Tamil Nadu, Gujarat, etc. Following the lifting of the ban in October 2024, demand has revived, enabling the firm to achieve Rs.36.89 crore revenue in the first eight months of FY2026, indicating healthy growth prospects. However, EBITDA margin declined to 4.94% in FY2025 from 5.31% in FY2024, primarily due to higher freight and fixed costs, while PAT margin remained stable at 0.48% in FY2025 against 0.47% in FY2024. Acuité believes that the firm’s operating performance will improve over the medium term; however, sustaining profitability, managing costs, and maintaining revenue growth will remain key monitorable.

Below Average Financial Risk Profile:
The firm’s financial risk profile remains below average, characterized by high gearing, moderate TOL/TNW, and below average debt protection metrics. Net worth improved marginally to Rs.6.60 crore in FY25 from Rs.6.39 crore in FY24, while total borrowings declined to Rs.13.22 crore in FY 25 from Rs.19.76 crore in FY 24 , leading to an improved gearing ratio of 2.00 times in FY 25 against 3.09 times in FY 24. Total debt structure of FY 25 comprises of USL of Rs. 1.96 crore from partners and related party, short term debt of Rs.11.04 crore and CPLTD of Rs. 0.21 crore. Debt protection indicators, though slightly better, continue to be below average with ICR at 1.43 times and DSCR at 0.94 times in FY25 compared to 1.41 times and 0.87 times in FY24. Despite improvement, leverage indicators such as TOL/TNW at 2.04 times and debt/EBITDA at 6.92 times remain high in FY 25, though better than FY24 levels of 3.12 times and 9.69 times respectively. Acuite believes the financial risk profile will strengthen gradually, supported by the absence of any debt-funded capex plans.

Intensive Working Capital Management with marginal improvement:
The firm’s working capital management is intensive however shown improvement, with GCA days reducing to 171 days in FY25 from 238 days in FY24, largely driven by a decline in inventory days to 134 days in FY 25 from 226 days in FY 24. Inventory levels remain high due to the seasonal nature of paddy procurement, as the company procures huge number of raw materials in the during November-December and March to May season. Secondly, as they deal in Sona masuri premium quality rice, they have to procure and keep in store the paddy for ageing, to demand premium pricing. Debtor days increased to 39 days in FY25 from 21 days in FY24, reflecting the average credit period of 45–60 days extended to customers, while creditor days stayed at just 1 days in both years since raw materials are procured i from farmers and local mandis on immediate payment basis. Acuite believes that the firm’s working capital intensity to persist at similar levels in the medium term, given the structural nature of its procurement and product requirements.