Press Release January 10, 2025 QUARTERFOLD PRINTABILITIES PRIVATE LIMITED Rating Assigned

Product	Quantum (Rs. Cr)	Long Term Rating	Short Term Rating
Bank Loan Ratings	15.50	ACUITE BBB | Stable | Assigned	-
Bank Loan Ratings	49.50	-	ACUITE A3+ | Assigned
Total Outstanding	65.00	-	-
Total Withdrawn	0.00	-	-

Rating Rationale

Acuité has assigned 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 Rs.65.00 crore bank facilities of Quarterfold Printabilities Private Limited (QPPL). The outlook is ‘Stable’. Rationale for rating assigned. The rating assigned factors in the established track record of the company along with the extensive experience of the promoters and healthy growth in the revenue on y-o-y basis with improving margins. The rating further takes into account the healthy financial risk profile of the company. However, these strengths are partly offset by the intensive working capital operations. Additionally, the rating takes into account the geographical concentration and recoverability risk faced by the company, as a significant portion of its revenue is derived from African nations which hold low credit ratings.

About the Company

Started in 2014, Quarterfold Printabilities was a partnership firm based in Maharashtra which later in 2020 got converted to a private limited company. The company is engaged in providing printing and publication solutions for educational & corporate purposes majorly catering to African countries. The manufacturing unit of the company is located at Taloja MIDC, Navi Mumbai. The current directors of the company are Mr. Nilesh Jethanand Dhankani and Mrs. Charani Nilesh Dhankani.

Unsupported Rating

­Not Applicable

Analytical Approach

Acuité has considered the standalone business and financial risk profiles of Quarterfold Printabilities Private Limited to arrive at the rating.

Key Rating Drivers

Strengths

Established track record of operation with experienced management The company is owned and managed by Mr. Nilesh Dhankani, who is involved in this industry for more than two decades. The extensive experience of the promoters has benefited the company in achieving a CAGR of 91 percent over the last three years. QPPL is mainly engaged in the business of providing educational printing solutions for African countries. Its exports to various African countries like Ghana, Ivary Coast, Nigeria, Tanzania, Kenya, Uganda accounted for nearly 82% of its revenue in FY24 (95 % in FY23). Further, company also caters to domestic publishers for NCERT printing. Also, the company in FY25 has started diversifying its business into other international markets, including the UK, USA and Germany which will add to the company’s growth going ahead. Acuite believes that QPPL will continue to benefit from its established track record of operations and experience of its management. Significant growth in operating performance along with profitability The company reported a revenue of Rs. 292.18 crore in FY24, marking a significant increase from Rs. 177.44 crore in FY23 and Rs. 97.49 crore in FY22. This growth is attributable to the strong order inflows both from international and domestic publishers. The company's operating margins have also improved over the years, standing at 17.88 percent in FY24 as against 14.9 percent in FY23 on account of improving efficiency in operations and reduction in input cost. Further, the major raw material for the company is paper i.e. text paper and cover paper which constitute ~70 percent of raw materials cost for the company. The order contracts allows the company to pass on fluctuations in the cost of its main raw material, paper which ensures that the company's operating margins remain unaffected. The company in the current year have registered a revenue of Rs. 215 crore till November 30, 2024. Healthy Financial risk profile The financial risk profile of the company remained healthy marked by a healthy net worth, low gearing, and healthy debt protection metrics. The net worth of the company stood healthy at Rs. 100.79 Cr. as on March 31, 2024 as against Rs. 68.51 Cr. as on March 31, 2023. The increase in net worth is primarily due to the accretion of profits to the reserves. Further, Acuite has considered the interest free unsecured loans worth Rs.37.03 Crore infused by the promoters as quasi equity in line with terms of the debt facilities availed by the company. The gearing of the company increased to 0.25 times as on March 31, 2024 as against 0.10 times as on March 31, 2023 on account of increase in working capital borrowings. Furthermore, the company plans to increase its working capital limits going ahead to support its growing operations. The TOL/TNW stood at 0.98 times as on March 31, 2024 as against 0.79 times as on March 31, 2023. The debt protection metrics remained healthy with DSCR and Interest coverage ratio standing at 11.06 times and 16.18 times respectively as on 31st March 2024. Acuite believes that the financial risk profile of the company shall continue to remain healthy with growing operations and steady cash accruals.

Weaknesses

Intensive Working capital operations The working capital operations of the company remains intensive marked by GCA days of 207 days in FY24 as against 206 days in FY23. This is majorly attributable to high debtor days which stood at 176 days in FY24 as against 148 days in FY23. On an average, the company offers a credit period of 130-140 days to its customers. However, for new customers the offer period is reduced to 60 days, and it is on advance basis in new markets like US, UK & Germany. Further, the inventory days decreased and stood at 27 days in FY24 as against 37 days in FY23. The creditors days stood at 111 days in FY24 as against 118 days in FY23. The company on an average gets a credit period of 90 days from paper suppliers. Acuite believes that working capital operations of the company may continue to remain intensive considering the nature of business. Geographical Concentration & Recoverability Risk QPPL is exposed to geographical concentration risk, as more than 75 to 80 percent of its sales comes from African nations which are prone to economical risk. Any imbalances in the economy of these countries shall harm the operations of QPPL. The company exports to African countries such as namely Ghana, Ivary Coast, Nigeria, Tanzania, Kenya, Uganda etc which hold low credit rating. Further, majority of the debtors of QPPL are on collection basis which may pose a recoverability risk. However, the long standing relationship with its customer and insurance cover on exports shall help the company to combat such risk. Also, the company naturally hedges the foreign currency risk against its paper imports and forex limits.  Acuite believes that going forward the geographical concentration will remain a key monitorable.

Rating Sensitivities

Growing scale of operations with sustainable margins. Improvement in the working capital operations. Reduction in the geographical concentration risk.

Liquidity Position

Adequate

The liquidity position of QPPL is adequate marked with net cash accruals (NCA) of Rs.35.99 crore in FY24 as against no major repayment obligations in the same year. Further, it is expected that company will generate NCA in range of Rs.45 to Rs.55 crore against the repayment obligations of less than Rs. 2 crore over the medium term. The current ratio of the company stood at 1.75 times in FY 2023-24. The average bank limit utilization for last 8 months November 2024 stood low at 41 percent on closing basis. Further the company is expected to enhance its working capital limits by Rs. 15-20 crore to  support the growth in its business operations. The company maintained cash and bank balance of Rs. 1.74 Crore as on March 31, 2024. Acuite believes that the liquidity position of the company will continue to remain adequate on account of steady cash accruals.

Outlook : Stable

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Other Factors affecting Rating

­None

Key Financials

Particulars	Unit	FY 24 (Actual)	FY 23 (Actual)
Operating Income	Rs. Cr.	292.18	177.44
PAT	Rs. Cr.	32.64	17.54
PAT Margin	(%)	11.17	9.89
Total Debt/Tangible Net Worth	Times	0.25	0.10
PBDIT/Interest	Times	16.18	21.85

Status of non-cooperation with previous CRA (if applicable)

­None

Any other information

­None

Applicable Criteria

• Default Recognition :- https://www.acuite.in/view-rating-criteria-52.htm • Rating Process and Timeline: https://www.acuite.in/view-rating-criteria-67.htm • Service Sector: https://www.acuite.in/view-rating-criteria-50.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 :

­Not Applicable

Annexure - Details of instruments rated

Lender’s Name ISIN Facilities Date Of Issuance Coupon Rate Maturity Date Quantum (Rs. Cr.) Complexity Level Rating Bank of Baroda Not avl. / Not appl. FBN/FBP/FBD/PSFC/FBE Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 17.00 Simple ACUITE A3+ | Assigned Kotak Mahindra Bank Not avl. / Not appl. FBN/FBP/FBD/PSFC/FBE Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 32.50 Simple ACUITE A3+ | Assigned Kotak Mahindra Bank Not avl. / Not appl. Inventory Funding Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 10.00 Simple ACUITE BBB | Stable | Assigned Bank of Baroda Not avl. / Not appl. Term Loan 03 Nov 2023 Not avl. / Not appl. 30 Jul 2027 4.73 Simple ACUITE BBB | Stable | Assigned Kotak Mahindra Bank Not avl. / Not appl. Term Loan 28 Aug 2024 Not avl. / Not appl. 05 Mar 2025 0.77 Simple ACUITE BBB | Stable | Assigned

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Contacts

Mohit Jain Senior Vice President - Rating Operations Parth Patel Lead Analyst - Rating Operations	Contact details exclusively for investors and lenders Mob: +91 8591310146 Email ID: analyticalsupport@acuite.in

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.