Long track record of operations and experienced management 
STIL has an operational track record of nearly four decades. It was originally incorporated in 1965 and was subsequently taken over by the Kolkata-based Kajaria family in 2011. The promoters have more than three decades of experience in the manufacturing and marketing of jute and related products. Post-acquisition, the promoters established a Jute Park at Shaktigarh (Burdwan district, West Bengal) under a Public-Private Partnership (PPP) model, which became operational in September 2014. STIL is currently managed by Mr. Srivatsa Kajaria, representing the fourth generation of the Kajaria family, who brings forward the legacy and domain expertise of the group. Acuite believes that the company’s long operational track record, coupled with the extensive experience of the promoters in the jute industry, will continue to support strong relationships with key customers and suppliers.

Steady growth in revenues albeit thin profit margins
STIL’s operating income marginally improved to Rs. 769.85 crore in FY25 from Rs. 758.86 crore in FY24, driven by improved demand and better sales realizations. In 9MFY26, the company reported revenues of Rs. 806.88 crore, significantly higher than Rs. 517.02 crore in 9MFY25, mainly on account of further improvement in realizations and volume sales during the period. For FY26, the revenue is expected to increase to the range of Rs. 1,000–1,100 crore, supported by increased demand from government organizations. The company’s major customers include Telangana State Civil Supplies Corporation Limited, Rajasthan State Cooperative, Gujarat State Cooperative, among others. The operating margin marginally improved to 2.87 per cent in FY2025 from 2.82 per cent in FY2024 due to lower raw-material expenses. Further, the net profit margin remained thin at 0.74 per cent in FY2025 from 0.54 per cent in FY24. Acuite believes that the company’s ability to sustain its improved operating scale and sustain improvement in profitability margins will remain a key rating monitorable.

Moderate financial risk profile
The financial risk profile of the company remains moderate, supported by a comfortable net worth base, moderate gearing and adequate debt protection metrics. The net worth stood at Rs. 75.89 crore in FY25 as against Rs. 69.96 crore in FY24 on account of accretion of profits to reserves. The gearing, however, increased to 1.52 times as on March 31, 2025, compared to 0.80 times as on March 31, 2024, primarily due to higher short-term borrowings during FY25. The company’s total debt stood comparatively higher at Rs. 115.29 crore as of March 31, 2025, comprising Rs. 1.49 crore of long-term debt, Rs. 110.60 crore of short-term borrowings, Rs. 1.50 crore of unsecured loans from promoters, and Rs. 1.70 crore of long-term debt-repayment obligations. The debt-protection metrics remain comfortable, with the Interest Coverage Ratio (ICR) at 2.19 times in FY25 compared to 2.73 times in FY24. The debt Service Coverage Ratio (DSCR) stood at 1.34 times in FY25 as against 1.25 times in the previous year. The Debt-to-EBITDA ratio increased to 4.71 times in FY25 from 2.48 times in FY24, while the TOL/TNW ratio increased to 5.11 times in FY25 as against 4.45 times in FY24. Acuite believes that the company’s financial risk profile is expected to remain moderate over the medium term on the back of increased working capital requirements.

Moderately intensive working capital management
The working capital operations of the company remain moderately intensive, reflected in Gross Current Asset (GCA) days of 174 days in FY25 as against 139 days in FY24. The GCA days increased due to elevated inventory levels and receivable days. The debtor collection period increased to 27 days in FY25 from 15 days in FY24. The average collection cycle continues to remain in the range of 20–25 days. The inventory days stood at 87 days in FY25 compared to 71 days in FY24. Creditor days stood at 88 days in FY25 from 120 days in the previous year, consistent with the company’s average credit period of 60–90 days. Furthermore, the average utilisation of fund-based limits stood moderate at around 71 per cent over the six-month period ending January 2026, with utilisation levels easing from October 2025 following an enhancement in working capital limits by Rs. 50 crore. Acuite believes that the company’s working capital management will remain moderately intensive over the medium term, driven by its inventory-holding requirements and the nature of its operations.

Exposure to raw material volatility and regulatory risks in the Jute Sector
The company remains vulnerable to raw jute price volatility due to its seasonal and climate-dependent availability, which affects operating profitability. Additionally, the highly regulated jute sector exposes the company to policy-driven risks such as MSP-linked raw material costs and mandatory packaging norms under the JPMA Act. Any changes in these regulations or fluctuations in raw jute supply could impact costs and industry demand, keeping regulatory and raw material risks significant.