Press Release October 13, 2026 STARSHINE MANUFACTURING COMPANY LIMITED (ERSTWHILE STARSHINE MANUFACTURING COMPANY PRIVATE LIMITED) Rating Assigned

Product	Quantum (Rs. Cr) (SEBI)	Quantum (Rs. Cr) (Other FSR)	Long Term Rating	Short Term Rating	Regulated By
Bank Loan Ratings	0.00	90.00	ACUITE BBB- | Stable | Assigned	-	RBI
Total Outstanding	0.00	90.00	-	-	-
Total Withdrawn	0.00	0.00	-	-	-

Note:- For activities or ratings of instruments falling under the purview of Financial Sector Regulators other than SEBI, the grievance / dispute redressal mechanisms and investor protection mechanisms provided by SEBI shall not be available.

Rating Rationale

Acuité has assigned the long-term rating of ‘ACUITE BBB-’ (read as ACUITE triple B minus) on the Rs.90.00 crore bank facilities of Starshine Manufacturing Company Limited (SMCL). The Outlook is 'Stable'. Rationale for rating assigned The rating assigned factors in the established track record of operations and extensive experience of promoters in the chair manufacturing industry, with their association with the business dating back to 1964. Further, the rating also derives support from the company's healthy operating profitability, reflected in stable EBITDA margins despite a decline in revenue in FY26. Further, ongoing capacity expansion at the Murbad facility is expected to support revenue growth over the medium term. However, the above strengths are partially offset by company's moderate financial risk profile, marked by elevated debt levels and moderate debt protection metrics. The rating is also constrained by the intensive working capital nature of operations, as evidenced by the elongated gross current assets (GCA) cycle driven by high inventory and receivables levels, resulting in high reliance on working capital borrowings. Further, SMCL operates in a highly fragmented and competitive industry with the presence of several unorganized players, exposing the company to pricing pressures and limiting its ability to significantly improve margins.

About the Company

Incorporated in 2009, SMCL is engaged in the manufacturing of chairs and chair components, including mechanisms, bases, headrests, armrests, backrests and other essential components. SMCL operates its manufacturing facilities at Murbad, Maharashtra and Roorkee, Uttarakhand, and has developed capabilities to manufacture a majority of chair components in-house. The company's products are supplied across India through a network of depots, catering to a diversified customer base across the country. The company has currently undertaken a capex project at its Murbad facility to expand its product offerings through manufacturing of additional office, home furniture and fixtures. The current directors of the company are Mr. Irfan Ali Sayed, Mr. Furkanali Ahamedali Sayed, Mr. Gopalkrishna Baliga and Mr. Rahul Jeeut Sharma.

Unsupported Rating

­Not Applicable

Analytical Approach

Acuite has considered the standalone business and financial risk profile of SMCL to arrive at the rating.

Key Rating Drivers

Strengths

Established track record of operations and experienced promoter family SMCL benefits from the long track record of promoter family in the chair manufacturing industry, with their association with the business dating back to 1964. The company is led by directors named Mr. Irfan Ali Sayed and Mr. Furkan Ali Sayed, who have over 35 years and 30 years of experience, respectively, in the business. Over the years, the company has developed manufacturing capabilities across various chair components and established relationships with customers in the office furniture segment. The promoters' experience and understanding of the industry have supported the expansion of the company's product portfolio, customer base and manufacturing operations, and continue to support its business growth. Healthy operating margins The company's operating profitability has remained healthy over the last three years, despite moderation in revenue during FY26 (Prov.). The operating income declined to Rs.121.18 crore in FY26 (Prov.) from Rs.132.95 crore in FY25, primarily on account of operational disruptions during the year. Further, the scheduled commissioning and operationalisation of Phase II of the Murbad facility by Q3 FY27 is expected to support revenue growth over the medium term. Despite the decline in revenue, the company maintained its profitability margins, with EBITDA margins improving to 18.76% in FY26 (Prov.) from 18.18% in FY25 and 16.45% in FY24. The improvement in margins was supported by a favourable product mix and moderation in employee expenses. Consequently, the company's PAT margin remained stable at 8.67% in FY26 (Prov.) as compared to 8.31% in FY25 and 8.11% in FY24. The sustained profitability levels continue to support the company's cash accrual generation and debt servicing ability.

Weaknesses

Moderate financial risk profile While the company’s net worth improved in FY26 (Prov.) on account of accretion of profits to reserves, standing at Rs.48.07 crore as of March 31, 2026 (Prov.), compared to Rs.38.05 crore in FY25 and Rs.27.15 crore in FY24 (includes Rs 8 crore of unsecured loan treated as quasi equity), however, borrowings increased significantly to Rs.90.87 crores as of March 31, 2026 (Prov.), from Rs.77.9 crore in FY25, primarily due to higher utilization of working capital limits and debt availed for capexs. Further in the current year company has availed ECLGS loans amounting Rs.7.34 crore to support the working capital requirement. Debt protection metrics remained moderate, with the debt service coverage ratio at 1.47x in FY26 (Prov.) (1.64x in FY25) and the interest coverage ratio at 3.76x in FY26(Prov.) (3.71x in FY25). Debt-EBITDA was marked high at 3.99x as on March 31, 2026 (Prov.) (3.20x as on March 31, 2025). Intensive working capital nature of operations The company's working capital intensity remains high, as reflected by its Gross Current Asset (GCA) cycle of 254 days in FY26 (Prov.) as compared to 216 days in FY25. The working capital cycle is mainly driven by inventory and receivables, with inventory days increasing to 195 days in FY26 (Prov.) from 156 days in FY25, while debtor days increased to 83 days from 69 days during the same period. The higher inventory levels are primarily attributable to the company's change in its distribution model over the last two years. Earlier, the company supplied products through distributors; however, it has now established its own warehouses and depots across key cities and holds inventory on its books, resulting in higher inventory holdings. Further, the company maintains adequate raw material inventory to support its manufacturing operations. Receivables also remain elevated, as the company extends a credit period of up to 90 days to its customers. While the company continues to receive credit support from its suppliers, the creditor days declined to 91 days in FY26 (Prov.) from 166 days in FY25. The elongated working capital cycle, coupled with decline in supplier credit, has resulted in high reliance on working capital borrowings, with average fund-based limit utilisation remaining at 92.7% during the six months ended June 2026. Susceptibility to competitive pressures from unorganized players SMCL operates in an industry marked by the presence of a large number of unorganized players, resulting in significant pricing competition. The company's products are exposed to competitive pressures, particularly in standardized segments, where differentiation is limited. Consequently, the company's growth and profitability remain dependent on its ability to maintain product quality, manufacturing efficiency and customer relationships. Any aggressive pricing by competitors or loss of key customers may impact the company's revenues and profitability.

Rating Sensitivities

Potential triggers (individual or collective) for an upward rating action:

Growth in operating performance with timely capex completion leading to higher-than-expected generation of net cash accruals. Improvement in working capital intensity with reduction in GCA days below 150 days.

Potential triggers (individual or collective) for a downward rating action:

Any decline in operating margins resulting in fall in net cash accruals below Rs.12 crore. Significant increase in debt levels impacting the financial risk profile Any further elongation in working capital intensity

Liquidity Position

Adequate

The company's liquidity profile remains adequate, supported by generation of sufficient net cash accruals of Rs. 13.18 crore in FY26 (Prov.) against lower long-term debt repayments obligations of ~Rs.7 crore during the same period. Going forward also, net cash accruals are expected to remain sufficient in the range of Rs.17-23 crore over FY27-FY28, providing comfortable coverage against scheduled repayment obligations in range of Rs.8-10 crores. It maintained free cash and cash equivalents of Rs. 0.12 crore at the end of FY26 (Prov.). However, the company’s fund-based working capital limits remained highly utilized, with average utilization of 92.7% during the six-month period ended June 2026, reflecting the working capital-intensive nature of its operations. To support its growing scale of business and ease working capital pressures, the company availed ECLGS term loans aggregating to Rs.7.34 crore in the present financial year.

Outlook - Stable

­

Other Factors affecting Rating

­None

Key Financials

Particulars	Unit	FY 26 (Provisional)	FY 25 (Actual)
Operating Income	Rs. Cr.	121.18	132.95
PAT	Rs. Cr.	10.51	11.05
PAT Margin	(%)	8.67	8.31
Total Debt/Tangible Net Worth	Times	1.89	2.05
PBDIT/Interest	Times	3.76	3.71

Status of non-cooperation with previous CRA (if applicable)

­None

Any other information

­None

Applicable Criteria

• Default Recognition :- https://www.acuite.in/view-rating-criteria-52.htm • Manufacturing Entities: https://www.acuite.in/view-rating-criteria-59.htm • Application Of Financial Ratios And Adjustments: https://www.acuite.in/view-rating-criteria-53.htm

Note on complexity levels of the rated instrument

­In order to inform the investors about complexity of instruments, Acuité has categorized such instruments in three levels: Simple, Complex and Highly Complex. Acuite’s categorisation of the instruments across the three categories is based on factors like variability of the returns to the investors, uncertainty in cash flow patterns, number of counterparties and general understanding of the instrument by the market. It has to be understood that complexity is different from credit risk and even an instrument categorized as 'Simple' can carry high levels of risk. For more details, please refer Rating Criteria “Complexity Level Of Financial Instruments” on www.acuite.in.

Rating History :

­Not Applicable

Contacts

Mohit Jain Chief Analytical Officer - Rating Operations Parth Patel Senior Analyst - Rating Operations	Contact details exclusively for investors and lenders Mob: +91 8591310146 Email ID: analyticalsupport@acuite.in

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