Note:- For activities or ratings of instruments falling under the purview of Financial Sector Regulators other than SEBI, the grievance / dispute redressal mechanisms and investor protection mechanisms provided by SEBI shall not be available.
Rating Rationale
Acuité has reaffirmed its long-term rating of ‘ACUITE BBB-' (read as ACUITE triple B minus) and short-term rating of ‘ACUITE A3' (read as ACUITE A three) on the Rs.89.00 crore bank facilities of Lakshmi Float Glass Limited (LFGL). The outlook is revised from ‘Negative’ to ‘Stable'.
Rationale for Rating Reaffirmation and change in outlook
The revision of outlook considers the sustenance of profitability margins despite moderation in revenues along with moderate improvement in financial risk profile which is expected to strengthen due to absence of any major debt. The rating reaffirmation considers the moderate financial risk profile and adequate liquidity position. The rating also draws support from an established operational track record of the company and experienced management. However, the rating remained constrained on account of working capital-intensive operations and presence in a highly fragmented and competitive nature of industry.
About the Company
Lakshmi Float Glass Limited (LFGL), promoted by the Delhi-based Gupta family, was established as a partnership firm, Lakshmi Traders, in 1970, and was reconstituted as a private limited company in 1992, and later as a closely held public limited company. The company is engaged in trading of float glass. Its operations are managed by third generation entrepreneur, Mr. Amit Gupta, and his uncle Mr. Lakshmi Norain Agarwal.
Unsupported Rating
Not Applicable
Analytical Approach
Acuité has considered the standalone financial and business risk profile of LFGL to arrive at the rating.
Key Rating Drivers
Strengths
Experienced management
LFGL was incorporated in 1970, and the company is currently managed by Ashok Kumar Gupta and Mr L.N. Aggarwal who have experience of over four decades in the glass and glassware industry. Extensive experience has enabled the company to forge healthy relationships with customers and suppliers. LFGL has wide customer base and is the sole distributor for Asahi India Glass Ltd (AIGL) in North India. Further, the experience of the top management and second level management, company has been able to expand its business pan India. Acuité believes that LFGL will continue to benefit from its experienced management and established relationships with customers and suppliers.
Moderation in scale of operations albeit sustained profitability margins
LFGL’s operating income declined to Rs. 277.53 crore in FY25 from Rs. 323.98 crore in FY24, primarily due to reduction in the selling prices of its product. Further, the company has reported revenue of approximately Rs. 270 crores in FY26, reflecting the continued pressure from lower product prices. Going forward, LFGL’s topline is expected to grow by around 15% in FY27, mainly driven by an anticipated improvement in selling prices. The operating profit margin of the company marginally improved and stood at 4.36 percent in FY25 as against 4.28 percent in FY24. Further, the net profit margin of the company improved and stood at 2.86 percent in FY25 as against 1.42 percent in FY24. Acuite believes, going forward, with the expected recovery in product prices, the Company’s revenues are anticipated to improve, supporting business stability over the medium term.
Moderate financial risk profile The Company has moderate financial risk profile marked by moderate net worth, coverage indicators and low gearing. The Total Tangible net worth improved and stood at Rs. 81.68 Cr. as on 31st March 2025 as against Rs. 73.79 Cr. as on 31st March 2024 on account of accretion of profit to reserves. The company has also made significant investments in related parties in the form of loans and advances, aggregating Rs. 86.25 crore as of March 31, 2025. The company follows conservative leverage policy marked by its low gearing (Debt to Equity ratio) that stood at 0.84 times as on 31st March 2025 as against 0.80 times as on 31st March 2024. The total outstanding debt of the company is Rs. 68.66 crore as on 31 March 2025 which consists of long-term bank borrowings of Rs. 13.28 crore, short-term working capital limit of Rs. 49.57 crore, current maturities of long-term Debt Rs 5.80 crore. Interest coverage ratio (ICR) improved and stood comfortable at 2.95 times for FY25 as against 2.27 times in FY24. Further, the Debt Service coverage ratio (DSCR) also improved and stood at 1.28 times for FY25 as against 0.67 times in FY24. Total outside liabilities to total net worth (TOL/TNW) stood similar at 1.28 times for FY25 and FY24. Debt-EBITA also improved and stood at 3.93 times as on 31st March 2025 as against 4.57 times as on 31st March 2024. The Net Cash Accruals to Total debt stood at 0.12 times as on FY25 and 0.09 times for FY24. Acuite believes that going forward the financial risk profile of the company is expected to improve and remain comfortable in medium term owing to reduction in total debt and sufficient net cash accruals.
Weaknesses
Working capital intensive operations
The working capital operations of the company is intensive marked by Gross Current Assets (GCA) at 137 days as on March 31, 2025, as compared to 169 days as on March 31, 2024. The debtor days stood high at 76 days in FY25 as compared to 60 days in FY24 and the inventory days stood at 24 days in FY25 as compared to 22 days in FY24. The creditor days stood at 49 days in FY24 as against 26 days in FY24. Fund based working capital limits are utilized at 86.03 per cent during the last five months ended March 2026. Acuite believes that the working capital operations of the company will remain around similar levels over the medium term owing to nature of operations.
Highly fragmented and competitive nature of industry
The glass and glassware industry is highly fragmented with several organized and unorganized players, thereby impacting the company's profitability. Acuité believes that high fragmentation and competition is likely to impact the profitability in the medium term.
Rating Sensitivities
Potential triggers (individual or collective) for an upward rating action:
Consistent growth in revenues by over 25 per cent along with improvement in profitability
Strengthening of liquidity metrics and financial risk profile supported by lower dependence on working capital borrowings
Potential triggers (individual or collective) for a downward rating action:
Deterioration in the company’s financial risk profile.
Any incremental investments in related parties without any significant increase in surplus, leading to stretched liquidity, or elongation of the working capital cycle.
Debt service coverage ratio (DSCR) below 1.10 time.
Liquidity Position
Adequate
The Company has adequate liquidity marked by adequate net cash accruals to its maturing debt obligations. The company generated cash accruals of Rs. 8.47 crore for FY25 as against obligations of Rs. 5.35 crores for the same period. Current Ratio stood at 1.14 times as on 31 March 2025. Fund based working capital limits are utilized at 86.03 per cent during the last five months ended March 2026. Cash and Bank Balances of company stood at Rs 0.45 crores as on 31 March 2025. Acuite believes that going forward the liquidity position of the company will remain adequate owing to steady cash accruals.
Outlook: Stable
Other Factors affecting Rating
None
Particulars
Unit
FY 25 (Actual)
FY 24 (Actual)
Operating Income
Rs. Cr.
277.53
323.98
PAT
Rs. Cr.
7.94
4.61
PAT Margin
(%)
2.86
1.42
Total Debt/Tangible Net Worth
Times
0.84
0.80
PBDIT/Interest
Times
2.95
2.27
Status of non-cooperation with previous CRA (if applicable)
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1.96
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ACUITE BBB- | Stable | Reaffirmed | Negative to Stable
Standard Chartered Bank
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ACUITE BBB- | Stable | Reaffirmed | Negative to Stable
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RBI
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05 Sep 2034
8.01
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ACUITE BBB- | Stable | Reaffirmed | Negative to Stable
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RBI
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Not avl. / Not appl.
05 Apr 2026
0.22
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ACUITE BBB- | Stable | Reaffirmed | Negative to Stable
Deutsche Bank
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Working Capital Term Loan
Unlisted
RBI
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Not avl. / Not appl.
05 Apr 2028
0.99
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ACUITE BBB- | Stable | Reaffirmed | Negative to Stable
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Unlisted
RBI
24 Dec 2020
Not avl. / Not appl.
06 Apr 2026
0.61
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ACUITE BBB- | Stable | Reaffirmed | Negative to Stable
Note:- For activities or ratings of instruments falling under the purview of Financial Sector Regulators other than SEBI, the grievance / dispute redressal mechanisms and investor protection mechanisms provided by SEBI shall not be available.
Contacts
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