| Experience of promoters and established t rack record of operations
RWPL was incorporated in 2001 promoted by Mr. Lakshmanan Giri and his wife Mr. Subhagiri. The company has a competent management supported by a team of well qualified and experienced second line personnel. The promoters have presence in the textile industry for nearly two decades. This has helped in building healthy relationships with its suppliers and customers to ensure a steady raw material supply and repeat business. Further, RWPL is expected to enjoy the benefit of proximity to the cotton growing area along with the promoters’ experience and local presence is expected to aid in improving its business risk profile over the medium term.
Stable scale of operations with increasing profitability
The company continues to maintain a stable scale of operations over three years with operating income stood at Rs.249.05 crore in FY2025 from Rs.256.86 crore in FY2024, Rs 258.78 crore in FY2023. when the company operated at full utilisation of 192 air-jet looms, and subsequently witnessing a strong improvement in FY2026, with operating income estimated at around Rs.322.00 crore, driven by higher sales volumes following the commissioning of additional capacity of 114 air-Jet looms. Operating profitability has improved with EBITDA increasing from Rs.25.73 crore (10.02%) in FY2024 to Rs.30.52 crore (12.25%) in FY2025 supported by substantial power-cost savings from captive renewable energy. While PAT remained stable at Rs.8.55 crore (3.43%) in FY2025 from Rs.8.46 crore (3.29%) due to higher depreciation and finance costs, it improved meaningfully an estimated Rs.13.72 crore (4.26%) in FY2026 as the benefits of expanded capacity and operating leverage materialised. Acuite believes that RWIPL’s revenue profile will remain stable to improving over the medium term, supported by incremental capacity addition, steady order inflows, and continued renewable power benefits, although profitability will remain susceptible to volatility in raw material prices inherent to the textile industry.
Moderate Financial risk profile
The company’s financial risk profile is moderate, supported by improving net worth base, strong debt-protection metrics and moderate gearing levels. The company’s net worth increased to Rs.89.07 crore as on March 31, 2025, from Rs.78.22 crore as on March 31, 2024, driven by profit accretion and infusion of equity capital. However, total debt increased to Rs116.57 crore in FY2025 (including long-term debt of Rs. 62.65 crore, short-term debt of Rs 38.88 crore and CPLTD of Rs.15.04 crore) from Rs.63.23 crore in FY2024, primarily on account of capex and increasing debt funded working capital requirements. Consequently, gearing moderated to 1.31x in FY2025 from 0.81x in FY2024, while TOL/TNW increased to 1.79x from 1.21x over the same period. Debt protection metrics remain healthy with interest coverage ratio (ICR) stood at 4.02x in FY2025 from 4.67x in FY2024 and debt service coverage ratio (DSCR) stood at 1.74x in FY2025 from 1.61x in FY2024. The Total Outside Liabilities to Tangible Net Worth (TOL/TNW) ratio stood at 1.79x in FY2025 from 1.21x in FY2024. however, Debt to EBITDA stood at 3.80x in FY2025 from 2.44x in FY2024, reflecting the higher debt base, although profitability improved with EBITDA of Rs.30.53 crore in FY25 from Rs.25.73 crore in FY2024. Further, RWIPL is incurring debt-funded capex in FY27 for the addition of 48 air-jet looms and 3 MW solar capacity to enhance its production capability and reduce long-term power costs. Acuite believes the financial profile will remain moderate over the medium term, backed by stable cash flows and efficiency gains post-commissioning of the new capacities.
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| Intensive working capital operations
The company’s operations remained working-capital intensive, reflected in Gross Current Assets (GCA) of 175 days in FY2025, as against 131 days in FY2024. The elongation was primarily driven by an increase in receivables and inventory holding. Inventory holding increased mainly due to accumulation of finished goods pending dispatch towards year-end. Accordingly, debtor days increased to 111 days in FY2025 from 94 days in FY2024, while inventory days rose to 38 days in FY2025 from 16 days in FY2024. The creditor days increasing to 60 days in FY2025 from 42 days in FY2024. Consequently, the working capital cycle elongated to 89 days in FY2025 from 68 days in FY2024. Fund-based bank-limit utilisation remained high, averaging ~80.31% over the 12 months ended March 2026, indicating continued reliance on bank borrowings to support operations. Acuité expects RWIPL’s working-capital intensity to remain elevated over the medium term, given the nature of the weaving business, with improvement dependent on disciplined inventory management and sustained recovery of long-pending receivable.
Susceptibility of the margins to volatility in raw material prices:
The RWPL’s profit margins are susceptible to fluctuations in the prices of raw materials, which affects sales realisations. Any adverse movement in the price of key raw materials, such as yarn, could have an adverse impact on the RWPL’s margins, as it may not be able to pass on the price hike to its customers owing to stiff competition. Operating margins of cotton spinners are susceptible to changes in cotton prices, which are highly volatile and commoditised product. Any abrupt change in cotton prices due to supply-demand scenario, carry-over stocks in the overseas market, and government regulations of changes in minimum support price (MSP) can lead to distortion in market prices and affect the profitability of players across the cotton value chain, including spinners.
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