Experienced management and established presence in the sea food industry
RIE has an operational track record of over a decade in seafood processing. It is promoted by Mr. Ch Prasada Rao, Mr. Ch Jagannadha Rao, Mr. Ch Durgamaleswarimr. Ch Anusha, Mr. Muhisin Kollivil Asharafe, Mr. Khader Mohammed Asharaf who possess over a decade of experience in the sea food industry. They are supported by its team of experienced professionals in managing day to day operations of RIE. The extensive experience of the promoter has enabled RIE to establish a healthy relationship with its customers and suppliers. Acuité believes that RIE will continue to benefit from its experienced management and established track record of operations.

Sustained profitability albeit subdued revenue performance
RIE reported a decline in its revenues which stood at Rs. 151.42 Cr. in FY2025 (prov.) as against Rs. 182.48 Cr. in FY2024 on account of decrease in the sale of its frozen fish in both domestic and export market during the year. The export sales contributed to the range of 60 - 90 per cent in FY2024 and FY2025, as firm receives repetitive orders from its customers. The major export countries are USA, China, Malaysia etc. The operating margin of the firm has improved and stood at 8.54 per cent in FY2025 (prov.) as against 6.94 per cent in FY2024. This improvement is majorly on account of passing on input cost to an extent along with various other power, administrative and selling & distribution expenses. The net profit margin of the company remained at similar range at 2.48 percent in FY2025 (Prov.) as against 2.49 per cent in FY2024 on account of marginally decrease in interest cost during the year. Acuite believes that the operating performance of the company would remain subdued over the medium term on account of subdued realisations and challenges in export market.

Moderate financial risk profile
Financial risk profile of RIE is moderate marked by moderate net worth, moderate gearing and debt protection metrics. The net worth of the firm stood improved at Rs. 44.50 Cr. as on 31 March, 2025 (prov.) as against Rs. 41.21 Cr. as on 31 March, 2024 on account of moderate accretion to reserves. The gearing (debt-equity) stood improved at 1.33 times as on 31 March, 2025 (prov.) as against 1.70 times as on 31 March, 2024 on account of decrease in long term bank borrowings during the same period. The total debt of Rs.59.30 Cr consists of Rs. 6.01 Cr. of long term debt, Rs. 45.93 Cr. of short-term debt, Rs.0.68 Cr. USL and Rs.6.67 Cr. of current maturities of long-term debt. The TOL/TNW improved and stood at 2.51 times as on 31 March 2025 (prov.) as against 2.72 times as on 31 March 2024. The Debt/EBITDA marginally declined and stood at 4.56 times as on 31 March 2025 (prov.) as against 5.38 times as on 31 March 2024. The debt protection metrics have improved in FY2025 (prov.) with interest coverage ratio (ICR) and debt service coverage ratio (DSCR) stood at similar range at 2.53 times and 1.01 times for FY2025 (prov.) as against 2.39 times and 0.67 times respectively for FY2024. The Net Cash Accruals to Total debt stood at of 0.11 times for FY2025 (prov.) and FY24. Acuite believes that the financial risk profile of the firm will remain moderate in the absence of any major debt funded capex plans.

Moderately intensive Working capital operations 
The operations of RIE are moderately working capital intensive marked by its Gross Current Assets (GCA) of 311 days for FY2025 (prov.) which stood moderately high as against 248 days for FY2024. This is due to inventory cycle of the firm which stood moderately high at 257 days in FY2025 (prov.) as against 194 days in FY2024 on account of increase in the amount of unsold inventory of finished goods lying with the firm in the form of frozen fish in order to readily meet the demand of customers in both domestic and exports market without any significant delays. The receivable days stood at 59 days in FY2025 (prov.) as against 54 days in FY2024 whereas the creditor days stood at 156 days in FY2025 (prov.) and 101 days in FY2024. The average bank limit utilization for 06 months period ended April 2025 stood high at ~91 percent for working capital facility. Acuite believes, the operations of the company would remain working capital intensive in the medium term on the back of high inventory days. 

High competition and risks inherent in the sea food industry
RIE operates in a highly competitive industry with the presence of many organized as well as unorganized players in India. In addition to this, the company remains vulnerable to the inherent risks in the seafood industry. These include susceptibility to diseases, climate changes, and adverse changes in policies among others.

Susceptibility of profitability to volatility in input prices and Forex Risk
RIE exports ~90 per cent of its products and hence it is susceptible to the fluctuations in foreign exchange fluctuation. The company hedges its risk through forward contracts to an extent of ~50 per cent of its exposure. The raw material prices are also highly volatile depending on its availability, and the company cannot pass on the price rise in entirety to its customers due to heavy competition. This keeps he margins exposed to market conditions.