­Acuite has consolidated the business and financial risk profiles of Karnataka Agro Chemicals (KAC), Multiplex Agricare Private Limited (MAPL) and Multiplex Bio-Tech Private Limited (MBPL), together referred to as the ‘Multiplex Group’ (MG). The consolidation is in view of the common management, strong operational and financial linkages among the entities.

­Promoters’ extensive experience and established track record in the fertilizer industry
Multiplex Group’ was set up in 1974 and currently Mr. Mahesh G Shetty manages the day-to-day operations of the group who has extensive experience of over five decades in the fertilizer industry which has led to understanding of the dynamics of the market and enabled to establish healthy relationships with its suppliers and customers to get repeated business. Acuite believes that the group will continue to benefit from its established track record and experience of promoters in this line of business.

Sound Business Risk Profile
The group has a wide distribution network across the country wherein it supplies its products through a network of 19 branches and 6000+ dealers with strong presence in Tamil Nadu, Telangana and Andhra Pradesh. The product portfolio of the group has more than 150 varieties thereby allowing high value addition and diversification. It manufactures a wide range of products~ from micronutrients to bio fertilizers and water-soluble fertilizers. The group’s ability to suitably modify its product mix in response to changes in market conditions partially mitigates the risks associated with cyclicality.

The revenue of the group improved to Rs.448.89 Cr in FY2025 (Prov.) as compared to Rs.379.40 Cr. in FY2024 and Rs.359.91 Cr in FY2023. The operating margin of the group increased to 15.17 percent in FY2025 (Prov.) as compared to 14.32 percent in FY2024 and 12.38 percent in FY2023. The improvement is driven by lower operating expenses in FY2025 (Prov.) as compared to the previous years. Likewise, the PAT margin stood at 7.78 percent in FY2025 (Prov.) as against 6.04 percent in FY2024 and 5.72 percent in FY2023. Moreover, the group has registered a revenue of Rs.175.98 Cr. till 30^th June, 2025. Acuite expects the scale of operations of the group to remain healthy in near to medium term backed by its strong diversity in clientele and product profile.

Moderate Financial Risk Profile
The financial risk profile of the group is marked by moderate net worth, gearing and comfortable debt protection metrics. The net worth of the group stood at Rs.102.85 Crore as on 31st March 2025 (Prov.) as against Rs.57.72 Crore as on 31st March 2024. The increase in the net worth is on account of accretion of profits into reserves along with capital contribution by MBPL in KAC in FY2025 (Prov.). Further, the total debt of the group stood at Rs.141.30 Crore as on 31st March 2025 (Prov.) against Rs.133.38 Crore as on 31st March 2024. The capital structure of the group is moderate marked by gearing ratio which stood at 1.37 times as on 31st March 2025 (Prov.) against 2.31 times as on 31st March 2024. Further, the coverage indicators improved reflected by interest coverage ratio and debt service coverage ratio which stood at 6.15 times and 2.13 times respectively as on 31st March 2025 (Prov.) against 4.53 times and 1.75 times respectively as on 31st March 2024. The TOL/TNW ratio of the group stood at 2.83 times as on 31st March 2025 (Prov.) against 5.03 times as on 31st March 2024 and DEBT-EBITDA stood at 2.00 times as on 31st March 2025 (Prov.) against 2.39 times as on 31st March 2024. Acuité expects that going forward the financial risk profile of the group will remain in similar range with no major debt-funded capex plans in near to medium term.

Moderately intensive Working Capital operations
The working capital operations of the group are moderately intensive marked by Gross Current Assets (GCA) of 152 days as on 31st March, 2025 (Prov.) as against 146 days as on 31st March, 2024. The high GCA days are mainly on account of inventory days of the group which stood at 97 days as on 31st March, 2025 (Prov.) as against 107 days as on 31st March, 2024. Further, the debtor days of the group stood at 33 days as on 31st March, 2025 (Prov.) as against 26 days as on 31st March, 2024 and the creditors stood at 175 days as on March 31, 2025 (Prov.) as against 255 days as on 31st March, 2024.  The group relies on its fund based bank lines to meet its working capital requirement which stood utilised at 82.58% in last six months ended June, 2025. Acuité expects that working capital operations of group will likely remain at the similar levels in near to medium term due to nature of operations.

­Vulnerability of profitability to agro-climatic conditions, regulatory risks and seasonality of the fertilizer business
The group’s sales and profitability remains susceptible to agro-climatic conditions, development of pest-resistant genetically modified seeds and regulatory risks inherent in the business. The agriculture sector in India remains vulnerable to the vagaries of monsoon as the area under irrigation remains low which exposes the fertilizer sector to volatility as well. The group faces intense competition from small, unorganised players, and has to compete with strong players in markets where it plans to expand its reach necessitates constant marketing and branding expenditure.