| Experienced management and established track record of operations
MOPL has an established operating presence of over two decades in the edible oil industry. The company is promoted by its directors, Mr. Manoj Murarka with nearly two decades of experience in the edible oil industry. The promoter's extensive experience has enabled MOPL to establish and maintain strong relationships with both customers and suppliers.
Acuité believes that MOPL will continue to benefit from established track record of operations and experience of management.
Improving scale of operations albeit moderation in profitability
The company has demonstrated a strong revenue growth of ~119 percent and stood at Rs. 248.33 Cr. in FY2025 against Rs.113.43 Cr. in FY2024. Further, the company reported an estimated revenue of Rs. 500 Cr. for FY2026. The improvement in turnover was primarily on account of higher volumes sold and better prize realizations during the year. The operating profit margin of the company declined marginally and stood at 2.07 percent in FY2025 as against 2.55 percent in FY2024. The decline in operating profitability margin is due to increase in raw material cost incurred during the year. The PAT margin stood at 0.94 percent in FY2025 against 0.78 percent in FY2024.
Acuite believes, the operating performance of the company would remain steady on the back of stable demand.
Efficient working capital operations:
The working capital operations of the company remained efficient, marked by improved Gross Current Assets (GCA) of 42 days in FY2025, as against 56 days in FY2024. The GCA days have improved, primarily driven by better receivables and the inventory cycle. The debtor days stood at 23 days as on March 31,2025 as against 29 days as on March 31, 2024. The company extends an average credit period of approximately 15 days to its customers, while maintaining an average inventory holding period of around 30 days. The inventory days stood at 7 days as on March 31, 2025, as against 14 days as on March 31, 2024. Further, the creditor days stood at 1 day as on March 31,2025 as against 1 day as on March 31, 2024.
Acuite believes, the working capital operations of the company would remain efficient in medium term on account of quicker collections.
|
| Moderate financial risk profile:
The financial risk profile of MOPL is moderate, characterized by low net worth, high gearing, and comfortable debt protection metrics. The company's tangible net worth stood to Rs. 11.68 Cr. as of March 31, 2025, as against Rs. 9.26 Cr. as of March 31, 2024, due to the accumulation of profits into reserves. Further, this tangible net worth also includes unsecured loans from directors amounting to Rs. 3.11 Cr., which have been treated as quasi equity since they are subordinated to bank debts. The total debt of the company stood at Rs. 22.02 Cr. as on March 31, 2025 comprising of Rs. 22.02 Cr. of short-term debt. The gearing (debt-equity) of the company stood at 1.89 times as on March 31, 2025, as against to 1.02 times as on March 31, 2024. The TOL/TNW of the company stood at 2.11 times as on March 31, 2025, as against 1.15 times as on March 31,2024. Further, the debt protection metrics of the company stood comfortable reflected by interest coverage ratio (ICR) stood at 2.85 times for FY2025 as against 1.89 times for FY2024 and debt service coverage ratio of 1.86 times for FY2025 as against 1.38 times for FY2024. The net cash accruals to total debt (NCA/TD) stood range bound at 0.11 times in FY2025 as compared to 0.11 times in the previous year.
Acuité believes that the company’s ability to mark sustained improvement in its financial risk profile will remain a key monitorable over the medium term.
Susceptible of profitability to volatility in raw material prices in an intensely competitive edible oil industry
Mustard seeds and other oilseeds such as groundnut and sunflower constitute the primary raw materials for MOPL. The availability and pricing of these inputs are influenced by multiple factors, including monsoon conditions, area under cultivation, and both domestic and international demand. Additionally, the company faces intense competition from unorganized players, which further limits its pricing flexibility. Exposure to these factors results in volatility in margins.
|
