| Established track record of operations
SSPL has an established track record of over two decades in the shoes manufacturing industry, specializing in the premium footwear with a dominant presence in the export and domestic markets. The company is presently led by Mr. Kayum Dhanani, who has been actively involved in its day-to-day operations since its inception, which has also led to the SSPL’s association with the well-known international brands over the years.
Steady operating performance
The operating revenue of the company grew marginally in FY26 at Rs. 273.42 Cr. as compared to Rs. 264.96 Cr. in FY25. While the contribution from exports has declined to ~50 percent in FY26 from ~70 percent in FY25, however, the company has diversified into domestic leather segment post commencement of in-house tannery in April 2026 which contributed ~21 percent of revenue in FY26. Further, the company has clocked revenue of ~Rs. 151.90 Cr. in H1FY27 (Rs. 144.90 Cr. in H1FY6) and has outstanding order book of ~Rs. 57.60 Cr. as on July 31, 2026. Moreover, the operating margin of the company reflected marginal improvement to 15.30 percent in FY26 (14.66 percent in FY25), owing to reduction in marketing expense and improving operating efficiency owing to backward integration of tannery. However, overall performance has been lower than expectations. Going forward, growth momentum in the operating scale and sustenance of margins shall remain key rating monitorable.
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| Moderate financial risk profile
While the company’s net worth stood increased to Rs. 103.18 Cr. as on March 31, 2026 (Rs. 91.20 Cr. as on March 31, 2025) on account of accretion of profits to reserves, however, the total debt increased significantly to Rs. 188.36 Cr. as on March 31, 2026, from Rs. 125.21 Cr. as on March 31, 2025, owing to long-term working capital debt raised in the form of non-convertible debentures amounting to Rs. 70 Cr. in FY26 (having moratorium of 18 months, repayment to commence from June 2027). Therefore, the gearing (debt/equity) ratio moderated to 1.83 times as on March 31, 2026, from 1.37 times as on March 31, 2025. Debt protection metrics remained moderate, with debt service coverage ratio (DSCR) and interest coverage ratio (ICR) of 1.44 times and 2.03 times, respectively, in FY26. Further, debt-EBITDA remained elevated at 4.40 times in FY26 (3.76 times in FY25).
Going forward, the company’s financial risk profile is expected to remain broadly in similar levels, with steady cash accruals largely offset by the additional working capital term debt of Rs. 23.56 Cr. availed under the ECLGS 5.0 scheme in FY27.
Intensive working capital operations
The company’s working capital operations remained intensive, as reflected in high gross current asset (GCA) of 338 days in FY26 (281 days in FY25). The elevated GCA days is primarily driven by high inventory levels, which stood at 211 days in FY26 (208 days in FY25) owing to nature of business. Further, debtor days increased significantly to 127 days in FY26 from 85 days in FY25, mainly due to an extended credit period granted to a group entity wherein SSPL has sold significant inventory from their retail stores to this group company, with the outstanding amount expected to be recovered in FY27. However, creditor days moderated to 134 days in FY26 from 200 days in FY25, owing to the partial settlement of the long-standing outstanding payables. Moreover, the company continued to witness high dependence on bank borrowings, as reflected in the average fund-based limit utilisation of 94.95 percent during the twelve-month period ended July 2026. Going forward, any further stretch in the working capital operations shall remain key rating sensitivity.
Customer concentration along with presence in competitive industry
The company’s revenue is largely derived from one customer who accounted for ~42 percent of FY26 revenue (~62 percent in FY25) resulting in a customer concentration risk for the company. However, the risk is partly mitigated by the company's efforts to diversify its customer base through the addition of new clients. The company also operates in a highly competitive industry characterized by the presence of several established domestic and international players, alongside competition from unorganized participants in the domestic market. Accordingly, the company’s ability to maintain product quality, expand its product portfolio, and strengthen customer relationships remains critical to sustaining its competitive position and growth prospects.
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