| Established track record of operations with experienced management
Headquartered in Maharashtra, RSL was incorporated in 2008 and has been operational for more than two decades. The group is promoted by Mr. Pashant Kisanlal Bhaiya, who brings more than 30 years of expertise in the edible oil industry through his work experience with MKB Foods Private Limited. The broad experience of the promoters has enabled them to expand its capacity and diversify its operations into corn-based oil processing and ethanol manufacturing.
Growing scale of operations through capacity expansion and business diversification
The revenue of the group improved significantly in FY2025 to Rs. 934.98 Cr. in FY2025 from Rs. 692.83 Cr. in FY2024 on account of increase in the sales volumes as well as realization price. The increase in sales volumes is on account of capacity expansion undertaken by the company at its plants in the previous years. However, the EBITDA margin moderated to 3.43 percent in FY2025 from 4.55 percent in FY2024 due to increase in the share of trading revenue where margins are lower as compared to manufacturing. Post commencement of operations of the ethanol plant & corn oil processing, the revenue and profitability of the group is expected to further improve over the medium term.
Moderate working capital operations
The moderately efficient working capital operations of the group are evident from gross current assets (GCA) of 67 days in FY2025 as against 74 days in FY2024. The GCA days are driven by inventory and debtor days which stood at 31 and 13 days respectively in FY2025. Further, the creditor days stood at 14 days in FY2025. However, the bank limit utilisation stood high 97.83% primarily due to the ongoing requirements at group capex.
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| Average financial risk profile
The financial risk profile of the group is marked average driven by moderate networth, high gearing and moderate debt protection indicators. At a consolidated level, while the gearing improved in FY2025 due to fund infusion by initial public offer (Rs 44.61 Cr. in April 2024) & preferential issue (Rs. 18.14 Cr. in February 2025), it continues to remain high at 1.64 times (2.13 times in FY2024) due to capex leverage. Further, the debt service coverage ratio remain moderate at 1.06 times, however, interest coverage ratio stood healthy at 4.09 times as on March 31, 2025.
The financial risk profile of the group is expected to improve post completion of capex but remain elevated due to high debt levels.
Implementation and stabilisation risks
The group is currently undertaking two capex projects; a corn oil processing unit and ethanol manufacturing unit with 6 MW power plant. The capex for the corn oil processing unit of ~30.43 Cr. was fully funded through equity infusion. On the other hand the capex for the ethanol manufacturing unit estimated at a cost of Rs. 256.06 Cr. is funded through long term debt of Rs. 145.12 Cr, unsecured loans of Rs. 11.50 Cr. and balance through promoter contribution. The corn oil unit is expected to commence operations from October 2025 onwards and ethanol unit is expected to commence operations from September 2025 onwards. Therefore, timely completion of capex without cost overruns and materialisation of the same will be a key rating sensitivity.
Inherent challenges of solvent extraction industry
The solvent extraction industry faces various challenges such as availability of adequate and quality raw material, volatility in realization prices and fluctuating demand. Rice bran is the major raw material for rice bran oil and deoiled rice bran cakes. The availability of rice bran is affected by several factors such as rice production, climatic conditions, government policies, etc. The quality of rice bran also plays a major role in the extraction process, as low quality of rice bran may affect the output quantity. Further, the demand and price for rice bran oil is sensitive to alternate edible oil prices and the prices of oil seeds. The prices of edible oil is also influenced by other factors such as government policies, climatic conditions, oil seed availability, global demand, etc.
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