| Experienced management and long operational track record
The firm was established in 1993 and is engaged in edible oil refining. The partners of the firm are Mr. M. Kabilan, Mr. Murugesan Bharathan, and Mr. Joshy Varghese who are experienced professionals who have more than 3 decades of track record in the edible oil industry. The promoters' extensive industry experience has supported the firm's growth, capacity expansions, efficient procurement practices, and development of an established customer network across South India. Acuité believes that the management's industry experience and execution capabilities will continue to support the firm's growth prospects.
Steady growth in revenues coupled with improved profitability margins
The firm's operating income stood at Rs.305.30 Cr. in FY2026 (Prov.) as against Rs.293.44 Cr. in FY2025 and Rs.251.18 Cr. in FY2024, registering a growth of approximately 4.0 percent over FY2025 and a two-year CAGR of around 10.2 percent. The growth reflects sustained demand for edible oils coupled with the firm's established presence in its key markets. Profitability witnessed an improvement during FY2026(Prov). Absolute EBITDA increased to Rs.10.25 Cr. in FY2026(Prov.) from Rs.6.30 crore in FY2025 and Rs.4.09 crore in FY2024. Consequently, EBITDA margin improved to 3.36 percent in FY2026(Prov.) compared to 2.15 percent in FY2025 and 1.63 percent in FY2024. The improvement indicates better operating efficiencies, increased prices for refined oils, favourable procurement dynamics and improved absorption of fixed costs on a higher scale of operations. Acuité believes that, the sustenance of growth in revenues while maintaining its profitability margins will remain a key rating sensitivity.
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| Moderate financial risk profile
RR’s financial risk profile is moderate, marked by low net worth, high gearing and moderate debt protection metrics. The net worth of the firm stood at Rs.23.84 Cr, Rs.17.95 Cr. and Rs.10.96 Cr. as on March 31, 2026(Prov), 2025, 2024 respectively. The improvement in net worth is due to accretion of reserves and infusion of funds in FY2026(Prov) and in FY2025. Gearing of the firm is high though improved, which stood at 2.48 times as on March 31, 2026(Prov), against 3.13 times as on March 31, 2025, and 3.03 times as on March 31, 2024. Firm ’s debt protection metrics is moderate marked by– Interest coverage ratio and debt service coverage ratio stood at 2.18 times and 1.55 times as on March 31, 2026(Prov), respectively as against 1.50 times and 1.29 times as on March 31, 2025, and 1.67 times and 1.67 times as on March 31, 2024. TOL/TNW stood at 3.20 times as on March 31st, 2026(Prov.), against 4.07 times as on March 31st , 2025 and 3.72 times as on March 31st, 2024, respectively. The debt to EBITDA of the firm stood at 5.71 times in March 2026(Prov.) as against 8.78 times in FY2025 and 7.36 times in FY2024. Debt-EBITDA is higher on account of short-term debt of fund based utilizations, however it is improving over the last two years. Acuité believes that the financial risk profile would improve over the medium term due to no debt funded capex.
Moderately Intensive Working Capital Operations
The firm's working capital operations are moderately intensive in nature as reflected through Gross Current Asset (GCA) days of 118 days in FY2026(Prov) against 111 days in FY2025 and 73 days in FY2024. Inventory holding increased to 55 days in FY2026(Prov.) from 53 days in FY2025 and 34 days in FY2024. Given the nature of the edible oil business, inventory management assumes significance due to fluctuations in commodity prices and procurement patterns. The firm is required to maintain adequate inventory levels to ensure uninterrupted supply and mitigate volatility in raw material availability. Debtor days moderated to 60 days in FY2026(Prov.) from 55 days in FY2025 but remained higher than 38 days in FY2024, reflecting higher credit extended to customers to support revenue growth. Creditor days stood at 19 days in FY2026(Prov.) as against 22 days in FY2025. The fund based limits are utilized at 91 percent for fund based over the 12 months ended May 2026. Acuité believes working capital requirements are likely to remain sizeable over the medium term given inventory stocking requirements.
Presence in a highly competitive and fragmented edible oil industry
The edible oil industry is highly competitive and fragmented, with the presence of large integrated players as well as numerous regional and local manufacturers. Intense competition, coupled with volatility in raw material prices, restricts the ability of small and mid-sized players to fully pass on cost increases, thereby impacting profitability. However, increasing consumer preference for branded edible oils, growing health awareness, and the expansion of organized retail are expected to support growth prospects for established branded players in the industry.
Capital withdrawal risk associated with partnership firm
The firm is exposed to the risk of capital withdrawal considering its partnership constitution. Any significant withdrawal from the partner’s capital will have a negative bearing on the financial risk profile of the firm.
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