Established track record of operations and experienced management
With commencement of operations from 2015, the firm has a established a significant track record of operations in the industry. Further, the company has a constant focus of expansion as witnessed by the commencement of the new UP plant in FY2025 and plans of installation of additional machinery in both the plants over the near term. The partners of the firm also possess a decade long experience in the aforementioned industry which has eventually helped them to maintain healthy relationships with its customers and suppliers.

Modest scale of operations
The company has a modest scale of operations thought the revenue increased by 25.16 per cent in FY25 (Provisionals) and stood at Rs.37.19 crore against Rs.29.72 crore in FY2024 and Rs.30.59 crore in FY2023. This growth in majorly on account of starting the additional unit in UP. Further, the EBITDA margin moderated to 11.54 per cent in FY2025 (Prov.) as against 12.07 per cent in FY2024 owing to increase in raw material cost. Further, the revenue for 2MFY2026 stands at Rs.6.37 crore (Rs.4.6 crore from Pune unit & Rs.1.77 crore from UP unit).
Acuite believes that the operating performance shall improve on the increasing demand and efficiency of operations.

­Moderate financial risk profile
The financial risk profile of the firm is moderate marked by low net worth, high gearing and moderate debt protection metrics. The tangible net worth of the firm stood low at Rs.6.56 crore in FY2025 (Prov.) as against Rs.4.33 crore in FY2024. While the debt levels increased marginally in FY2025, the improved networth led to improvement in gearing to 2.29 times in FY2025 (Prov.) as against 2.84 times in FY2024. Further, the debt protection metrics remained moderate with interest coverage ratio (ICR) of 2.82 times in FY2025 (Prov.) as against 2.76 times in FY2024 and debt service coverage ratio (DSCR) of 2.82 times in FY2025 (Prov.) as against 2.76 times in FY2024. Further the firm has planned for installing one additional machinery both in Pune and in UP at a total cost of Rs.1.50 crore in the near term. The funding for the same would be done through availing term loan of ~ 70 per cent and rest through internal accruals. Acuite believes, the financial risk profile would remain moderate on the back of low net worth base. 

Working capital intensive operations 
The operations of the firm are working capital intensive in nature marked by high Gross current asset (GCA) of 143 days in FY2025 (Prov.) as against 180 days in FY2024. This is mainly on account of high receivable days which stood at 64 days for FY2025 (Prov.) as against 59 days for FY2024. The inventory levels of the firm also stood moderate at 48 days in FY2025 (Prov.). Further, the creditor days of the firm stood low at 19 days for FY2025 (Prov.) as against 22 days for FY2024 leading to high reliance on working capital funding from lenders. The company has a working capital intensive nature of operations also led to high reliance on working capital funding from lenders. The average bank limit utilization by the firm is 99.08 per cent in last eight months ended March 2025. Acuite believes, the operations of the firm would remain working capital intensive on the back of elongated collections. 

Susceptibility of profitability to volatility in raw material prices in a highly fragmented and competitive textile industry
Savvy Industries (SI) operates in a highly fragmented and commoditised industry which is characterised by intense competition due to several players in the organised and unorganised sector, which limits the pricing power of the players in the industry. Furthermore, the industry is characterised by having low bargaining power for smaller players limiting margins. Moreover, the profitability remained susceptible to volatility in raw material prices which constitute ~ 60 per cent in as per cent of total sales.