Press Release

Press Release

September 25, 2026

NETWORK CLOTHING COMPANY PRIVATE LIMITED
Rating Reaffirmed

Product	Quantum (Rs. Cr) (SEBI)	Quantum (Rs. Cr) (Other FSR)	Long Term Rating	Short Term Rating	Regulated By
Bank Loan Ratings	0.00	47.50	ACUITE BBB \| Stable \| Reaffirmed	-	RBI
Bank Loan Ratings	0.00	40.50	-	ACUITE A3+ \| Reaffirmed	RBI
Total Outstanding	0.00	88.00	-	-	-
Total Withdrawn	0.00	0.00	-	-	-

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) and short-term rating of ‘ACUITE A3+’ (read as ACUITE A Three Plus) on the Rs. 88.00 Cr. bank facilities of Network Clothing Company Private Limited (NCCPL). The outlook is revised from 'Negative' to 'Stable'.

Rationale for rating Reaffirmation and revision in outlook to Stable
The revision in outlook from ‘Negative’ to ‘Stable’ is on the back of recovery of profitability in FY26 to an extent and comfortable financial risk profile with low gearing, moderate coverage indicators and absence of debt funded capex plans. The rating reaffirmation reflects the moderation in revenues while recovering profitability in FY26 which is expected to continue in FY2027. The rating also factors in the experienced management team, established track record of operations, and diversified presence across domestic and export markets along with moderate financial risk profile and adequate liquidity position. However, the rating remains constrained by the working capital-intensive nature of operations, customer and supplier concentration risks, susceptibility of profitability to volatility in raw material prices, exposure to foreign exchange fluctuations, and intense competition in the textile and apparel industry.

About the Company

Incorporated in 1999 and headquartered in Tamil Nadu, Network Clothing Company Private Limited (NCCPL) is engaged in the manufacture of knitted garments catering to men, women, and children. The company operates eight manufacturing units across Tamil Nadu, comprising seven units in Tiruppur and one unit in Erode. The company exports nearly ~45 percent of its production to international markets, including Sweden, France, the United Kingdom, Ireland, Australia, and the UAE. NCCPL also markets women's hosiery products under its flagship brand, “Twin Birds.” The current directors of the company are Mr. Murugasamy Ravi, and Mr. Ravi Arvind.

Unsupported Rating

Not Applicable

Analytical Approach

Acuite has considered the standalone business and financial risk profiles of Network Clothing Company Private Limited (NCCPL) to arrive at this rating.

Key Rating Drivers

Strengths

Experienced Management and Established Track Record
NCCPL benefits from the extensive experience of its promoters, who have been associated with the garment manufacturing industry for over two decades. The company has established a stable operational track record since its incorporation in 1999 and is supported by an experienced management team. Acuite believes that the company's experienced management and established market presence will continue to support its business risk profile over the medium term.

Improvement in operating profitability despite moderation in revenue
The company's operating income moderated to Rs. 266.57 crore in FY26 from Rs. 312.24 crore in FY25 and Rs. 284.63 Cr. in FY2024, primarily due to a decline in both export and domestic garment sales. The company reported revenue of Rs. 127.54 crore during 5MFY27, registering a growth of approximately 10 per cent over Rs.115.99 crore in 5MFY26. Despite the moderation in revenue, the company reported an improvement in operating profitability, with EBITDA increasing to Rs. 16.08 crore in FY26 from Rs. 15.41 crore in FY25, however moderated over FY24. Consequently, the EBITDA margin improved to 6.03 per cent in FY26 from 4.94 per cent in FY25 and 9.53 per cent in FY24. The improvement in operating performance was primarily supported by lower raw material consumption, favourable inventory movements and rationalisation of operating expenses. The profitability improved with PAT increasing to Rs. 4.69 crore in FY26 from Rs. 4.28 crore in FY25. Resultantly, the PAT margin improved to 1.76 per cent in FY26 from 1.37 per cent in FY25, aided by higher operating profitability and lower finance costs. The company reported improvement in profitability during (Apr-Jul) 4MFY27, with EBITDA margin of 7.86 percent and PAT margin of 3.64 percent, supported by efficient cost management and stable operating performance. Acuite believes that company's improved profitability over FY2025 despite lower revenues reflects its ability to manage costs efficiently; however, sustenance of the enhanced margin profile and improvement in the scale of operations will remain key rating monitorable.

Moderate financial risk profile
The financial risk profile of the company remained moderate, marked by a modest net worth, comfortable leverage indicators and improving debt protection metrics. The company's net worth improved to Rs. 84.17 crore as on March 31, 2026 from Rs. 79.48 crore as on March 31, 2025, supported by accretion of profits to reserves. The total debt stood at Rs. 56.91 crore as on March 31, 2026 as against Rs. 57.18 crore as on March 31, 2025. The total debt includes Rs. 2.10 Cr. of long term debt, Rs. 52.41 Cr. of short term debt and Rs. 2.40 Cr. of current portion of long term debt as on March 31, 2026. The gearing (Debt to Equity) improved to 0.68 times in FY26 from 0.72 times in FY25. the Total Outside Liabilities/Tangible Net Worth (TOL/TNW) remained comfortable at 1.10 times as on March 31, 2026 and as on March 31, 2025. The debt protection metrics witnessed improvement, with the interest coverage ratio increasing to 3.16 times in FY26 from 2.42 times in FY25 and Debt service coverage ratio (DSCR) improving to 1.94 times from 1.92 times, respectively, on account of improved operating profitability and lower finance costs.The company has completed a capex of around Rs. 10.00 crores towards the construction of a 75,000 sq. ft. building. Going forward, it proposes to incur an additional Rs. 2.00 crores towards the replacement of semi-automated machinery with fully automated machinery in FY2027. The entire capex programme is expected to be funded through internal accruals, with no reliance on incremental bank borrowings. While the proposed capex is not expected to materially enhance revenue, it is anticipated to improve operational efficiency and productivity through process automation.
Acuite believes that the financial risk profile of the company is likely to remain moderate over the medium term.

Weaknesses

Intensive Working Capital Operations
The working capital management of the company is intensive in nature, marked by Gross Current Assets (GCA) of 170 days in FY26 as compared to 136 days in FY25. The elongation in the working capital cycle was primarily driven by higher inventory and receivables levels. The inventory days increased to 82 days in FY26 from 72 days in FY25 on account of maintenance of higher stock levels to ensure timely execution of orders and meet customer delivery requirements. Further, debtor days increased to 36 days in FY26 from 29 days in FY25. The creditor days also increased to 106 days in FY26 from 85 days in FY25, providing partial support to the company's working capital requirements. The average utilisation of the fund-based working capital limits remained high at ~99.25 percent during the six months ended August 2026. Acuite believes that the working capital operations of the company are likely to remain intensive over the medium term due to its nature of business.

Highly fragmented and competitive industry
The knitted garment industry in India is highly fragmented and competitive, marked by the presence of a large number of organised and unorganised players. The company is exposed to intense competition from both domestic players as well as the established players in the overseas market. The shifts in consumption patterns can also have an adverse impact on the operations of the company.

Susceptibility of margins to raw material price fluctuation risk and forex risk
The profitability of the company is susceptible to fluctuations in the prices of raw materials - cotton yarn and other consumables. The prices of cotton are highly dependent on agro-climatic conditions. The company’s ability to avoid any significant deterioration in profitability levels amid volatility in prices of its key inputs will remain a key rating sensitivity in medium term.

Rating Sensitivities

Potential triggers (individual or collective) for an upward rating action:

Increase in operating performance with revenues surpassing ~Rs. 500.00 Cr. along with improvement in the profitability margins.
Improvement in working capital cycle
Improvement in financial risk profile

Potential triggers (individual or collective) for a downward rating action:

Significant decline in revenues and profitability with net cash accruals falling below Rs. 8.00 Cr
Elongation in working capital cycle or increased reliance on working capital borrowings exerting pressure on liquidity
Deterioration in financial risk profile due to unexpected borrowings

Liquidity Position

Adequate

The company’s liquidity position remained adequate marked by sufficient net cash accruals of Rs. 9.58 Cr. in FY2026 as against Rs. 2.40 Cr. repayment obligations. is the company is expected to generate cash accrual in the range of Rs. 15.00 – Rs. 18.00 Cr. as against maturing repayment obligations in the range of Rs. 2.00 Cr- Rs. 2.40 Cr. over the medium term. The cash and bank balances of the company stood at Rs. 2.17 Cr. as on March 31, 2026. The current ratio stood comfortable at 1.41 times as on March 31, 2026. The working capital management of the company is intensive in nature marked by Gross Current Assets (GCA) of 170 days as on 31st March 2026, further, the reliance on working capital limits remained high with average utilisation of fund-based limits at ~ 99.25 percent over the last six months ending August 2026. Going ahead, liquidity position of the company is expected to remain adequate on account of steady accruals against its repayment obligation.

Outlook

Stable

Other Factors affecting Rating

None

Key Financials

Particulars	Unit	FY 26 (Actual)	FY 25 (Actual)
Operating Income	Rs. Cr.	266.57	312.24
PAT	Rs. Cr.	4.69	4.28
PAT Margin	(%)	1.76	1.37
Total Debt/Tangible Net Worth	Times	0.68	0.72
PBDIT/Interest	Times	3.16	2.42

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
27 Jun 2025	PC/PCFC	Short Term	9.00	ACUITE A3+ (Reaffirmed)
	FBN/FBP/FBD/PSFC/FBE	Short Term	5.00	ACUITE A3+ (Reaffirmed)
	PC/PCFC	Short Term	25.00	ACUITE A3+ (Reaffirmed)
	Bank Guarantee (BLR)	Short Term	0.50	ACUITE A3+ (Reaffirmed)
	Post Shipment Credit	Short Term	1.00	ACUITE A3+ (Reaffirmed)
	Cash Credit	Long Term	13.00	ACUITE BBB \| Negative (Reaffirmed)
	Term Loan	Long Term	6.89	ACUITE BBB \| Negative (Reaffirmed)
	Proposed Long Term Bank Facility	Long Term	27.61	ACUITE BBB \| Negative (Reaffirmed)
29 Mar 2024	PC/PCFC	Short Term	26.00	ACUITE A3+ (Upgraded from ACUITE A3)
	PC/PCFC	Short Term	16.50	ACUITE A3+ (Upgraded from ACUITE A3)
	Bank Guarantee (BLR)	Short Term	0.50	ACUITE A3+ (Upgraded from ACUITE A3)
	Cash Credit	Long Term	13.00	ACUITE BBB \| Stable (Upgraded from ACUITE BBB- \| Stable)
	Proposed Long Term Bank Facility	Long Term	24.20	ACUITE BBB \| Stable (Upgraded from ACUITE BBB- \| Stable)
	Term Loan	Long Term	7.80	ACUITE BBB \| Stable (Upgraded from ACUITE BBB- \| Stable)
20 Jan 2023	PC/PCFC	Short Term	29.00	ACUITE A3 (Reaffirmed)
	PC/PCFC	Short Term	16.50	ACUITE A3 (Reaffirmed)
	Bank Guarantee (BLR)	Short Term	0.50	ACUITE A3 (Reaffirmed)
	Letter of Credit	Short Term	3.50	ACUITE A3 (Reaffirmed)
	Cash Credit	Long Term	15.00	ACUITE BBB- \| Stable (Reaffirmed)
	Proposed Long Term Bank Facility	Long Term	12.50	ACUITE BBB- \| Stable (Reaffirmed)
	Term Loan	Long Term	11.00	ACUITE BBB- \| Stable (Reaffirmed)

Annexure - Details of instruments rated

Lender’s Name	ISIN	Facilities	Listing Status	Regulated By	Date Of Issuance	Coupon Rate	Maturity Date	Quantum (Rs. Cr.)	Complexity Level	Rating
Union Bank of India	Not avl. / Not appl.	Bank Guarantee (BLR)	Unlisted	RBI	Not avl. / Not appl.	Not avl. / Not appl.	Not avl. / Not appl.	0.50	Simple	ACUITE A3+ \| Reaffirmed
Union Bank of India	Not avl. / Not appl.	Cash Credit	Unlisted	RBI	Not avl. / Not appl.	Not avl. / Not appl.	Not avl. / Not appl.	13.00	Simple	ACUITE BBB \| Stable \| Reaffirmed \| Negative to Stable
South Indian Bank	Not avl. / Not appl.	FBN/FBP/FBD/PSFC/FBE	Unlisted	RBI	Not avl. / Not appl.	Not avl. / Not appl.	Not avl. / Not appl.	5.00	Simple	ACUITE A3+ \| Reaffirmed
Union Bank of India	Not avl. / Not appl.	PC/PCFC	Unlisted	RBI	Not avl. / Not appl.	Not avl. / Not appl.	Not avl. / Not appl.	25.00	Simple	ACUITE A3+ \| Reaffirmed
South Indian Bank	Not avl. / Not appl.	PC/PCFC	Unlisted	RBI	Not avl. / Not appl.	Not avl. / Not appl.	Not avl. / Not appl.	9.00	Simple	ACUITE A3+ \| Reaffirmed
Union Bank of India	Not avl. / Not appl.	Post Shipment Credit	Unlisted	RBI	Not avl. / Not appl.	Not avl. / Not appl.	Not avl. / Not appl.	1.00	Simple	ACUITE A3+ \| Reaffirmed
Not Applicable	Not avl. / Not appl.	Proposed Long Term Bank Facility	Unlisted	RBI	Not avl. / Not appl.	Not avl. / Not appl.	Not avl. / Not appl.	31.25	Simple	ACUITE BBB \| Stable \| Reaffirmed \| Negative to Stable
Union Bank of India	Not avl. / Not appl.	Term Loan	Unlisted	RBI	29 Sep 2022	Not avl. / Not appl.	25 Oct 2029	3.25	Simple	ACUITE BBB \| Stable \| Reaffirmed \| Negative to Stable

Contacts

Mohit Jain
Chief Analytical Officer - Rating Operations

Ritika Lalwani
Analyst - Rating Operations

Contact details exclusively for investors and lenders

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

List of instruments and names of regulators of the instruments

As required by SEBI Circular (SEBI/HO/DDHS/DDHS-PoD-2/I/4685/2026) dated February 10, 2026, a list of activities or instruments falling under the purview of various Financial Sector Regulators (FSRs), along with the names of respective FSRs, is being disclosed below:
A. Rating Activity:

Sr. No.	Instrument / activity Name	Regulator of the instrument
1	Listed/Proposed to be listed Bonds/Debentures/Preference Shares (all securities)	SEBI
2	Unlisted/Proposed to be unlisted Bonds/Debentures/ Preference share (all securities)	MCA
3	Listed PTCs / Securitisation Notes (originated by entities regulated by RBI)¹ ⁶	RBI
4	Listed PTCs / Securitisation Notes (originated by entities not regulated by RBI)¹	SEBI
5	Unlisted PTCs / Securitisation Notes (originated by entities regulated by RBI)¹	RBI
6	Listed Commercial Paper and NCDs with original maturity less than 1 year	RBI
7	Unlisted Commercial Paper and NCDs with original maturity less than 1 year	RBI
8	Loan Facilities (Fund/Non-Fund Based) from Bank / NBFCs/ NHB/ FIs ²	RBI
9	External Commercial Borrowings and other similar borrowings	RBI
10	Certificates of Deposit	RBI
11 a	Fixed Deposits raised by NBFCs, HFCs, FIs	RBI
11 b	Fixed Deposits raised by Banks ⁷	+
12	Fixed Deposits raised by corporates other than NBFCs, Banks, HFCs, FIs	MCA
13	Inter Corporate Deposits/Loans extended by Corporates	MCA
14	Borrowing programme ³	-
15	Issuer Ratings ⁴	-
16	Credit Ratings for Capital Protection Oriented Schemes (by Mutal Funds and AIFs)	SEBI
17	Credit quality ratings (CQRs) for Mutual Fund Schemes and Schemes of AIFs	SEBI
18	Listed Security Receipts ⁶	RBI
19	Unlisted Security Receipts	RBI
20	Independent Credit Evaluation (ICE)	RBI
21	Expected Loss Ratings (For Loan Facilities [Fund/Non-Fund based] from Banks/NBFCs/NHB/FIs) ⁷	+
22	Expected Loss Ratings (Listed / Proposed to be listed Bonds / Debentures / Preference Shares (all securities))	SEBI
23	Expected Loss Ratings (Unlisted / Proposed to be unlisted Bonds/ Debentures / Preference Shares (all securities))	MCA
24	Unlisted PTCs / Securitisation Notes (originated by entities not regulated by RBI) ¹	Investor-side Regulator such as IRDAI, PFRDA ⁵

¹Includes securitisation transactions involving assignee payout, acquirer's payout.

² Includes bank facilities such as liquidity facility, second loss facility that are part of securitisation transactions.
³The rated instrument may involve issuance of different instruments such as debt securities (listed or otherwise), bank loans, commercial paper (listed or otherwise), etc. The regulator of the instrument may accordingly be SEBI, RBI or MCA and can only be determined upon issuance. In Press Release(s) subsequent to issuance(s), Acuite shall separately capture the rated quantum details along with names of respective regulators.
⁴ There is no instrument being rated and hence, Regulator of the Instrument is not applicable. The rating scale and definitions are being followed as stipulated in SEBI Master Circular for CRAs.
⁵ These ratings were assigned during regulatory regime prior to the introduction of SEBI CRA Circular dated Feb 10, 2026 and accordingly, investor side regulators have been included.
⁶ By virtue of the instrument being listed, SEBI acts as the regulator for listing and related issues.
⁷ To be finalized following a discussion with the regulatory authorities.

B. Other activities:

Sr. No.	Activity Name	Regulator of the activity
1	Monitoring Agency	SEBI
2	Research activities, incidental to rating, such as research for Economy, Industries and Companies ⁸	Not applicable

⁸ permitted by SEBI vide SEBI Master Circular for CRAs.

Disclosure on instruments / activities and names of regulators:

A list of products/activities or ratings of instruments falling under the purview of various financial sector regulators (FSRs) along with the names of respective FSRs has also been duly disclosed by Acuite on its website. A link to the same has been provided below for ready reference:

https://acuite.in/Activities-and-Regulators.html

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.

Disclaimer: An Acuité rating does not constitute an audit of the rated entity and should not be treated as a recommendation or opinion that is intended to substitute for a financial adviser's or investor's independent assessment of whether to buy, sell or hold any security. Ratings assigned by Acuité are based on the data and information provided by the issuer and obtained from other reliable sources. Although reasonable care has been taken to ensure that the data and information is true, Acuité, in particular, makes no representation or warranty, expressed or implied with respect to the adequacy, accuracy or completeness of the information relied upon. Acuité is not responsible for any errors or omissions and especially states that it has no financial liability whatsoever for any direct, indirect or consequential loss of any kind, arising from the use of its ratings. Ratings assigned by Acuité are subject to a process of surveillance which may lead to a revision in ratings as and when the circumstances so warrant. Please visit our website (www.acuite.in) for the latest information on any instrument rated by Acuité. Please visit https://www.acuite.in/faqs.htm to refer FAQs on Credit Rating.

Note: None of the Directors on the Board of Acuité Ratings & Research Limited are members of any rating committee and therefore do not participate in discussions regarding the rating of any entity.