Established track record of operations supported by long-term association with reputed clientele
KVPL has a long presence for over three decades in the paper and paper products trading industry, aided by the experience of the promoter, Mr. Kashi Prasad Bajaj. The company has maintained long-term relationships with its customers, CDC Printers Private Limited, Sati Paper Traders, and The Calcutta Publishers, to name a few, and has established associations with suppliers like ITC Limited PSPD, Gold East Trading (Hongkong) Co. Ltd., and BAHL Papers Mills Ltd., thereby ensuring smooth flow of orders and execution. Acuité derives comfort from the company’s long-standing operations and clientele relationships.

Moderation in operating performance  
The revenues have moderated and stood at Rs. 393.44 Cr. in FY2025 (Prov.) as against Rs. 394.24 Cr. in FY2024. In Q1FY2026, the company has reported revenue of Rs. 88.60 Cr.  The Profitability margins stood stable since last two years with EBITDA margin at 5.35 per cent in FY2025 (Prov.) as against 5.40 per cent in FY2024. Net Profit margin has also stood comfortable at 2.90 per cent in FY2025 (Prov.) as against 2.85 per cent in FY2024. The improvement in PAT margins is mainly due to decrease in interest cost. Acuite believes that the operating performance of the company would remain steady on the back of stable business risk profile.

Heathy financial risk profile
The financial risk profile of the company is healthy with moderate net worth, healthy gearing and debt protection metrics. The net worth of the company stood at Rs.80.04 Cr. and Rs.68.69 Cr. as on March 31, 2025 (Prov.) and 2024 respectively.  The reason for improvement in the net worth is on account of accretion of reserves. The gearing of the company stood at 0.35 times as on March 31, 2025 (Prov.), against 0.36 times as on March 31, 2024. Debt protection metrics – Interest coverage ratio (ICR) and debt service coverage ratio (DSCR) stood at 4.34 times and 3.61 times as on March 31, 2025 (Prov.), respectively as against 4.17 times and 3.46 times as on March 31, 2024 respectively. The debt to EBITDA of the company stood at 1.31 times as on March 31, 2025 (Prov.), as against 1.16 times as on March 31, 2024. Acuite believes that, the financial risk profile of the company would remain healthy on the back of comfortable net worth base.

Moderately intensive working capital operations
Company’s working capital cycle is moderately intensive as reflected in its gross current asset (GCA) days at 98 days as on March 31, 2025 (Prov.), as against 90 days as on March 31, 2024. Inventory days stood at 30 days as on March 31, 2025 (Prov.), as against 23 days as on March 31, 2024. The debtor days stood at 68 days as on March 31, 2025 (Prov.), as against 61 days as on March 31, 2024. Customers are usually allowed credit of around 30 to 90 days depending on the length of relationship with them. Subsequently, the payable period stood at 17 days as on March 31, 2025 (Prov.), as against 15 days as on March 31, 2024, respectively.  Further, the average bank limit utilization in the last 6 months ended Jun 25 remained low at ~12 per cent. Acuite believes, the working capital operations of the company would remain moderately intensive on the back of elongated debtor days.  

Susceptibility of profitability to volatility in material prices and Forex Risk in an intensely competitive industry.
KVPL imports ~49 per cent of its products and hence it is susceptible to the fluctuations in foreign exchange fluctuation. The company currently does not hedge. The prices are also highly volatile depending on its availability, and the company cannot pass on the price rise in entirety to its customers due to heavy competition. This keeps the margins exposed to market conditions. The paper industry is highly competitive and fragmented marked by the presence of many organized and unorganized players in this industry, thus putting pressure on the profitability margins of the company. However, this risk is partially mitigated by company’s experienced management and long-standing relationships with its reputed clientele.