| Experienced promoters and established track record of the company
OCL has an established track record in the abrasives industry of over four decades with operations across fused aluminium oxide grains (including calcined products, monolithic), proppant, and power generation. In July 2015, OCL’s operations were acquired by Bombay Minerals Limited (BML, established in 1953) which is engaged in mining bauxite and manufacturing calcined bauxite. BML is a subsidiary of Ashapura Minechem Limited (AML), a part of the Ashapura Group, which is engaged in mineral processing and exporting bauxite and bentonite. Thus, the company derives benefit from the long-standing promoter experience in the industry. OCL’s day-to-day operations are managed by a team of qualified and experienced managers. Going forward, OCL is expected to benefit from the experience of its promotors and managers.
Improving scale of operations with steady profitability
The group’s revenue grew to Rs. 327.58 crore in FY2025 from Rs. 313.90 crore in FY2024, supported by healthy demand. For 9MFY2026, the group has achieved Rs. 309.88 crore and is targeting above Rs. 400 crores for FY2026. In FY2025, 40 per cent of revenue came from exports, and the company expects an equal contribution from exports and domestic markets going forward. OCL exports to Europe, Middle East, Africa, Asia and Australia. Operating profit margin moderated to 10.63 per cent in FY2025 from 11.76 per cent in FY2024, while PAT margin declined to 3.03 per cent from 6.06 per cent. The moderation in profitability was mainly on account of higher employee costs, depreciation, power and fuel charges, and interest expenses. Power cost increased due to high coal prices, prompting the company to shift fully to PGVCL-supplied power. FY2024 profitability was supported by a one-time exceptional gain of Rs. 4.06 crore. Interest cost in FY2025 increased due to a Rs. 26 crore unsecured loan at 11 per cent, taken for working capital and capex needs. For 9MFY26 the operating margin of the company stood around 11.00 – 12.00 per cent and PAT margin stood around 5.00 - 5.50 per cent further which is expected to improve in near to medium terms.
Acuite believes that with the CAPEX becoming operational, adequate orders in hand, and growth in the export segment, OCL’s revenue and profitability are expected to improve over the near to medium term.
Healthy Financial Risk Profile
The financial risk profile of the company stands healthy supported by healthy net worth, coverage indicators and low gearings. The tangible net worth of the company stood at Rs.282.88 crores in FY2025 as against Rs.275.59 crores in FY2024, the improvement in the net worth is on the account of accretion of profits into reserves. The debt coverage indicators also stood healthy with interest coverage ratio (ICR) and debt service coverage ratio (DSCR) of 4.43 times and 2.66 times respectively in FY2025 and 9.97 times and 6.17 times respectively in FY2024. Further the debt protection metrics are expected to improve significantly in near to medium terms on account of reducing debt and no major debt funded capex plan. The gearing (debt to equity) stood low at 0.25 times in FY2025 as against 0.21 times in FY2024. The Debt/EBITDA stood at 2.01 times in FY2025 as against 1.37 times in FY2024 and TOL/TNW stood at 0.48 times in FY2025. Going forward, OCL’s financial risk profile is expected to remain healthy, supported by its strong capital structure, healthy debt protection metrics, and prudent financial management.
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| Moderately intensive working capital nature of operations
The working capital operations of OCL stood moderately intensive on account of high gross current assets (GCA) of 256 days in FY2025 as against 261 days in FY2024, primarily driven by elevated inventory holding and moderate receivables. Inventory days continues to remain high at 145 days in FY2025 as against 139 days in FY2024. The debtor days stood moderate at 91 days in FY2025 as against 99 days in FY2024. The creditor days stood at 110 days in FY2025 as against 125 days in FY2024. However, the working capital limit utilisations remain low, at ~25.77 per cent over the six months ending January 2026 and the non-fund-based limits are completely utilised at 100 per cent over six months ending January 2026. Acuite believes, the working capital operations of the group would remain moderately intensive due to the nature of business.
Susceptibility of profitability to volatility in raw material prices and forex risk
OCL’s profitability remains exposed to volatility in key raw material prices such as pet coke and alumina, which form a major part of its cost structure. Any sharp rise in input prices may not be fully passed on to customers, thereby impacting margins. Further, with a portion of raw materials imported (~20 per cent) and rising export sales (in the range of 45-50 per cent), the company is also subject to foreign exchange fluctuations. Although natural hedging and hedging practices offer some cushion, profitability will remain vulnerable to these external price and currency movements.
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