Press Release

Press Release

February 07, 2025

MAHIKA PACKAGING INDIA LIMITED
Rating Reaffirmed and Withdrawn

Product	Quantum (Rs. Cr)	Long Term Rating	Short Term Rating
Bank Loan Ratings	36.46	ACUITE C \| Reaffirmed & Withdrawn	-
Bank Loan Ratings	6.36	Not Applicable \| Withdrawn	-
Total Outstanding	0.00	-	-
Total Withdrawn	42.82	-	-

Rating Rationale

Acuite has reaffirmed and withdrawn its long-term rating of ‘ACUITE C' (read as ACUITE C) on the Rs. 36.46 crore bank facilities of Mahika Packaging India Limited (MPIL). The rating is being withdrawn on account of request received from the company and NOC (No Objection Certificate) received from the banker.
Acuite has also withdrawn the long-term facilities of Rs. 6.36 crore without assigning any rating as it is a proposed facility of Mahika Packaging India Limited (MPIL). The rating is being withdrawn on account of request received from the company.

The withdrawal is in accordance with Acuite's policy on withdrawal of rating as applicable to the respective facility/instrument.

Rational for rating
The rating reaffirmation is on account of delays observed in the servicing of debt obligations which have been reported in credit information bureau report of the company in the recent past.

About the Company

Incorporated in 2005, Mumbai based Mahika Packaging India Limited (MPIL) is engaged in manufacturing of custom plastic packaging solutions across different market sectors including personal care, healthcare, chemical and household product markets Mahika Packaging India Limited current product portfolio includes dispensing caps and closures, plastic bottles, co-extruded tubes, laminated tubes, self-adhesive labels and shrink sleeves that are designed to cater to specific needs and demands of different industries. Mahika Packaging India Limited has its manufacturing facilities are located in Daman and Vapi the company has its presence in domestic as well as international markets such as Australia, the U.S.A, the Middle East, South Africa, and Turkey to name a few. The current director of company is Mr. Amit Sushil Gupta, Mr. Tapan Kumar Banerjee, Mrs. Gunjan Parun Mehra, Mr. Sushil Brijlal Gupta and Mr. Sumit Sushil Gupta.

Unsupported Rating

Not Applicable

Analytical Approach

Acuité has considered the standalone view of the business and financial risk profile of MPIL to arrive at the rating.

Key Rating Drivers

Strengths

Experienced Management with established track record of operations
The promoter, Mr. Sushil Gupta has an extensive experience in the packaging industry for more than two decades. The other members of the family including his two sons Mr. Amit Gupta and Mr. Sunil Gupta are also engaged in the business. The extensive experience of the promoters and established presence in the industry has helped the company to generate healthy relations with various customers and suppliers in the domestic market as well as international market. MPIL caters to a reputed client base including Dabur India, Castrol India, Unilever, Patanjali Ayurved, Torrent Pharmaceuticals, Ipca Laboratories, Abbott Laboratories in India to name a few. In the international market, the company has its presence in Australia, the USA, the Middle East, South Africa, and Turkey to name a few. Its portfolio of international clients consists of Walmart, Walgreens, CVS Pharmacy to name a few.

Moderate financial risk profile
MPIL has a moderate financial risk profile marked by moderate net worth, moderate gearing and moderate debt protection metrics. MPIL’s net worth stood marginally improved to Rs. 59.92 crore as of March 31, 2024 against Rs. 53.03 crore as of March 31, 2023, on account of accretion of profits to reserves. The company’s gearing stood marginally improved at 0.67 times as on March 31,2024 as against 0.82 times as on March 31, 2023, on account of decrease in the long term debt availed by the company. The company’s total debt as on March 31,2024 stood at Rs. 40.35 crore as compared to Rs. 43.54 crore as on March 31, 2023; comprising of long-term debt of Rs. 10.24 crore, short-term debt of Rs. 19.53 crore and maturing debt obligation of Rs. 10.58 crore. The interest coverage ratio of the company stood at 3.96 times in FY24 against 2.99 times in FY23. DSCR stood at 1.56 times in FY2024 against 3.34 times in FY2023.

Weaknesses

Instances of delays in servicing of debt obligations
Instances of delays in the servicing of bank debt obligations have been reported in credit information bureau report of the company in the recent past.

Moderate operating performance albeit decline in revenues
The revenue of the company stood lower at Rs. 83.08 crore in FY24 compared to revenue of Rs. 121.97 crore in FY23. The revenue of the company decreased in FY24 due to lower price realization of input materials largely related to the petroleum products. In H1FY2025, the company has achieved a revenue of Rs.47.26 crore. However, the operating profit margin of the company stood improved at 33.35 percent in FY24 compared against 14.36 percent in FY23. The absolute operating profit of the company improved and stood at Rs. 27.71 crore in FY24 as compared to Rs. 17.52 crore in FY23, on account of lower raw material costs incurred by the company. The PAT margin of the company stood at 7.31 percent in FY24 compared to 7.67 percent in FY23.

Working capital intensive nature of operations
The working capital operations of the company are intensive marked by GCA days of 220 days in FY2024 against 129 days in FY2023 due to an increase in inventory days. Inventory days stood at 197 days in FY2024 against 89 days in FY2023 due to the company keeping sufficient stock in hand so that it can be readily available for production and dispatch. The average inventory holding period for the company is around 130 to 135 days. The debtor days stood at 74 days in FY24 against 36 days for FY23. The average credit period allowed to the customers is around 60-90 days. The creditor days of the company stood at 133 days for FY24 as against 36 days for FY23. The average credit period allowed by the suppliers is around 60-90 days. The average bank limit utilisation for 06 months period ended October 2024 stood at ~96.75 per cent for the fund-based limits.

Rating Sensitivities

Not Applicable

Liquidity Position

Poor

The company’s liquidity position is poor marked by recent instances of delays in meeting repayment obligations as reflected in the credit information bureau report.

Outlook: Not Applicable

Other Factors affecting Rating

None

Key Financials

Particulars	Unit	FY 24 (Actual)	FY 23 (Actual)
Operating Income	Rs. Cr.	83.08	121.97
PAT	Rs. Cr.	6.07	9.36
PAT Margin	(%)	7.31	7.67
Total Debt/Tangible Net Worth	Times	0.67	0.82
PBDIT/Interest	Times	3.96	2.99

Status of non-cooperation with previous CRA (if applicable)

Not Applicable

Any other information

None

Applicable Criteria

• Default Recognition :- https://www.acuite.in/view-rating-criteria-52.htm
• Manufacturing Entities: https://www.acuite.in/view-rating-criteria-59.htm
• Application Of Financial Ratios And Adjustments: https://www.acuite.in/view-rating-criteria-53.htm

Note on complexity levels of the rated instrument

In order to inform the investors about complexity of instruments, Acuité has categorized such instruments in three levels: Simple, Complex and Highly Complex. Acuite’s categorisation of the instruments across the three categories is based on factors like variability of the returns to the investors, uncertainty in cash flow patterns, number of counterparties and general understanding of the instrument by the market. It has to be understood that complexity is different from credit risk and even an instrument categorized as 'Simple' can carry high levels of risk. For more details, please refer Rating Criteria “Complexity Level Of Financial Instruments” on www.acuite.in.

Rating History

Date	Name of Instruments/Facilities	Term	Amount (Rs. Cr)	Rating/Outlook
28 Jun 2024	Cash Credit	Long Term	13.00	ACUITE C (Downgraded from ACUITE BB+)
	Cash Credit	Long Term	5.00	ACUITE C (Downgraded from ACUITE BB+)
	Term Loan	Long Term	8.16	ACUITE C (Downgraded from ACUITE BB+)
	Term Loan	Long Term	10.30	ACUITE C (Downgraded from ACUITE BB+)
	Proposed Long Term Bank Facility	Long Term	6.36	ACUITE C (Downgraded from ACUITE BB+)
19 Mar 2024	Cash Credit	Long Term	13.00	ACUITE BB+ (Downgraded & Issuer not co-operating* from ACUITE BBB- \| Stable)
	Term Loan	Long Term	6.33	ACUITE BB+ (Downgraded & Issuer not co-operating* from ACUITE BBB- \| Stable)
	Cash Credit	Long Term	5.00	ACUITE BB+ (Downgraded & Issuer not co-operating* from ACUITE BBB- \| Stable)
	Term Loan	Long Term	2.38	ACUITE BB+ (Downgraded & Issuer not co-operating* from ACUITE BBB- \| Stable)
	Term Loan	Long Term	5.78	ACUITE BB+ (Downgraded & Issuer not co-operating* from ACUITE BBB- \| Stable)
	Term Loan	Long Term	4.01	ACUITE BB+ (Downgraded & Issuer not co-operating* from ACUITE BBB- \| Stable)
	Term Loan	Long Term	6.29	ACUITE BB+ (Downgraded & Issuer not co-operating* from ACUITE BBB- \| Stable)
	Proposed Long Term Bank Facility	Long Term	0.03	ACUITE BB+ (Downgraded & Issuer not co-operating* from ACUITE BBB- \| Stable)
23 Dec 2022	Cash Credit	Long Term	13.00	ACUITE BBB- \| Stable (Reaffirmed)
	Term Loan	Long Term	6.33	ACUITE BBB- \| Stable (Reaffirmed)
	Cash Credit	Long Term	5.00	ACUITE BBB- \| Stable (Assigned)
	Term Loan	Long Term	2.38	ACUITE BBB- \| Stable (Reaffirmed)
	Term Loan	Long Term	5.78	ACUITE BBB- \| Stable (Assigned)
	Term Loan	Long Term	4.01	ACUITE BBB- \| Stable (Assigned)
	Term Loan	Long Term	6.29	ACUITE BBB- \| Stable (Reaffirmed)
	Proposed Long Term Bank Facility	Long Term	0.03	ACUITE BBB- \| Stable (Assigned)

Annexure - Details of instruments rated

Lender’s Name	ISIN	Facilities	Date Of Issuance	Coupon Rate	Maturity Date	Quantum (Rs. Cr.)	Complexity Level	Rating
Indian Bank	Not avl. / Not appl.	Cash Credit	Not avl. / Not appl.	Not avl. / Not appl.	Not avl. / Not appl.	13.00	Simple	ACUITE C \| Reaffirmed & Withdrawn
Indian Bank	Not avl. / Not appl.	Cash Credit	Not avl. / Not appl.	Not avl. / Not appl.	Not avl. / Not appl.	5.00	Simple	ACUITE C \| Reaffirmed & Withdrawn
Not Applicable	Not avl. / Not appl.	Proposed Long Term Bank Facility	Not avl. / Not appl.	Not avl. / Not appl.	Not avl. / Not appl.	6.36	Simple	Not Applicable\|Withdrawn
Indian Bank	Not avl. / Not appl.	Term Loan	28 Jul 2022	Not avl. / Not appl.	28 Jul 2029	8.16	Simple	ACUITE C \| Reaffirmed & Withdrawn
Indian Bank	Not avl. / Not appl.	Term Loan	28 Jul 2022	Not avl. / Not appl.	28 Jul 2029	10.30	Simple	ACUITE C \| Reaffirmed & Withdrawn

Contacts

Mohit Jain
Senior Vice President - Rating Operations

Dheeraj Salian
Associate Analyst - Rating Operations

Contact details exclusively for investors and lenders

Mob: +91 8591310146
Email ID: analyticalsupport@acuite.in

About Acuité Ratings & Research

Acuité is a full-service Credit Rating Agency registered with the Securities & Exchange Board of India (SEBI). The company received RBI Accreditation as an External Credit Assessment Institution (ECAI) for Bank Loan Ratings under BASEL-II norms in the year 2012. Acuité has assigned ratings to various securities, debt instruments and bank facilities of entities spread across the country and across a wide cross section of industries. It has its Registered and Head Office in Kanjurmarg, Mumbai.

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