­Experienced management with an established track record of operations and a reputed clientele
PMIPL has an operational track record spanning more than four decades. The company was initially established as a proprietorship concern in 1978 by Dr. Champalal Desarda, who holds a doctorate in metallurgy. Further, the company was reconstituted as a private limited company in 1991 and is currently managed by his son, Mr. Shekhar Desarda (Chairman and MD), who possesses more than two decades of experience in the manufacturing of capital equipment, consumables, and spares for the pulp and paper industry. He is ably supported by a qualified team of senior management in managing the day-to-day operations of PMIPL. The extensive experience of the management has enabled PMIPL to establish a healthy relationship with its reputed clientele, like ITC Limited, JOEFL Paper Mills, West Coast Paper Mills, Astron Paper and Board Mill, JK Paper Limited, Tamil Nadu Newsprint and Papers Limited, and Century Paper & Board Mills Limited, amongst others. Acuité believes that PMIPL will continue to benefit from its experienced management, an established track record of operations and a reputed clientele.

Stable growth in operations:
The company has registered revenue of Rs.365.91 Cr. in FY2025 posting a growth of ~19.2 percent against Rs.306.80 Cr. in FY2024 and Rs.294.60 Cr. in FY2023. This growth in the company’s revenue over the years is primarily driven by increased order inflows, supported by the company’s strong market presence of over four decades in catering to pulp and paper industry across both domestic and exports markets. Additionally, during 7MFY2026 the company registered revenue of Rs.206.93 Cr. against Rs.169.45 Cr. during the previous year and expected to close the year with the revenue of Rs.430-440 Cr. The operating profit margins remained stable in the range of 12.74 percent in FY2025 against 12.52 percent in FY2024 and 14.76 percent in FY2023. Net profit margin declined to 7.53 percent in FY2025 as against 9.13 percent in FY2024 due to lower other income. Acuite, expects PMIPLs operating performance to improve steadily over the medium term on account of stable flow of orders.

Healthy financial risk profile:
PMIPL’s financial risk profile is healthy marked by healthy networth, low gearing and healthy debt protection metrics. The net worth of the company stood at Rs.216.62 Cr. as on March 31, 2025 compared to Rs.189.08 Cr. as on March 31, 2024. The improvement in networth is due to accretion of profits to reserves. However, the company has around Rs.32.75 Cr. of investments and advances of Rs.25.32 Cr. in its associate and subsidiary companies as on March 31, 2025. The total debt level of the company (comprising Rs.14.80 Cr. of long-term debt, Rs.27.08 Cr. of short-term debt and current maturities of long-term debt of Rs.5.49 Cr.) stood at Rs.47.37 Cr. as on March 31, 2025 against Rs.34.99 Cr. as on March 31, 2024. The gearing level and total outside liabilities to tangible networth (TOL/TNW) remained at 0.22 times and 0.79 times, respectively, as on March 31, 2025, compared to 0.19 times of gearing and 0.64 times of TOL/TNW as on March 31, 2024. The debt protection metrics remained healthy with interest coverage ratio (ICR) 16.75 tomes and debt service coverage ratio (DSCR) of 6.13 times as on March 31, 2025 against ICR of 22.56 times and DSCR of 9.80 times as on March 31, 2024. Debt to EBITDA remained at 0.93 times as on March 31, 2025, against 0.76 times as on March 31, 2024. Acuite believes that the financial risk profile of the company will remain healthy over the medium term due to its conservative leverage policy.

­Intensive working capital operations:
PMIPL’s working capital operations remained intensive, as reflected through the gross current asset (GCA) of 236 days in FY2025 as against 190 days in FY2024. The elongation in GCA days is primarily due to higher inventory levels and significant advances to suppliers. The company procured majority of the raw material during end of Q4FY2025 resulting in higher raw material inventory. Additionally, inventory includes the general store spares related to engineering spare parts segment leading to higher inventory days of 78 day in FY2025 as against 60 days in FY2024. The company has ~Rs.30 Cr. of advances given to suppliers as on March 31, 2025 which further elongating the GCA days. The debtors days remained at 76 days in FY2025 as against 75 days in FY2024. The creditor days were stretched to 70 days in FY2025 from 41 days in FY2024. Acuite expects the operations of the company to remain working capital intensive on account of the presence of extended advances to suppliers and stretched receivable period.

Margins are susceptible to raw material prices and foreign exchange fluctuation risk.
Steel, being the major raw material utilised by PMIPL, constitutes a major component of the overall cost structure of the company. With steel prices being volatile in nature, the company faces cost escalation risk in the absence of adequate hedging mechanisms and a price escalation clause in its contracts. Further, exports contribute 35-40 percent of the revenue for PMIPL; this poses a foreign exchange fluctuation risk to PMIPL in the absence of adequate hedging mechanisms, making the operating income and profitability margins volatile.