| Experienced promoters and Established market position
The group has a diversified presence across multiple leather and footwear segments, comprising finished leather, shoe uppers, finished footwear, textile garments, safety footwear, fashion footwear, and other leather products. The operations of the group are led by Mr. Mukhtarul Amin along with his family, who possess more than four decades of experience in the leather industry. The extensive experience of the promoters coupled with support from an experienced technical team has helped the group in establishing healthy relationships with its customers and suppliers. Acuité believes that the group will continue to benefit from its experienced management and established brand presence in the leather industry.
Improved revenue from operations
The revenue of the group stood at Rs. 679.20 Cr. in FY2026 as against Rs. 667.59 Cr. in FY2025 amidst a slowdown in the key export markets during the year. The improvement is supported by higher sales contribution from textile products coupled with improved price realization across key product categories. Additionally, the revenue performance reflects the group's established market position and diversified product offerings. Revenue from textile products improved to Rs. 85.63 Cr. in FY2026 from Rs. 72.81 Cr. in the previous year, while leather and leather products continued to dominate the revenue mix, contributing around 84 percent of the total sales. Going forward, the group's revenue profile is expected to benefit from improving demand conditions in key export markets and continued traction in its domestic footwear brands. However, Acuite notes that the ability of the group to sustain its topline in the near to medium term will remain a key monitorable factor.
Healthy Financial Risk Profile
The financial risk profile of the group is marked by healthy net worth, gearing below unity, and comfortable debt protection metrics. Tangible net worth of the group stood at Rs. 485.39 Cr. as on March 2026 from Rs. 470.81 Cr as on March 31, 2025 driven by accretion to reserves. The capital structure marked by gearing ratio stood at 0.37 times as on March 31, 2026 as against 0.45 times as on March 31, 2025. Further, the interest coverage ratio and debt service coverage ratio stood at 2.25 times and 0.78 times, respectively, as on March 31, 2026. Acuite notes while the DSCR at the consolidated level remained below unity, the standalone DSCR of Superhouse Limited stood above 1.1 times as on March 31, 2026. Moreover, Debt-EBITDA stood at 3.83 times in as on March 31, 2026 as against 4.16 times in as on March 31, 2025 and Total Outside Liabilities/Tangible Net Worth (TOL/TNW) stood at 0.76 times as on March 31, 2026 as against 0.80 times as on March 31, 2025. Acuite expects the financial risk profile of the group to remain in a similar range with no major debt-funded capex plans in the near to medium term.
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| Intensive Working Capital Operations
The working capital operations of the group are intensive, marked by Gross Current Assets (GCA) of 268 days as on 31st March 2026 owing to high inventory and receivable days. The inventory days stood at 146 days as on 31st March 2026 as against 154 days as on 31st March 2025 as the group maintains adequate inventory as and when required for order execution. Further, the debtor days stood at 94 days as on 31st March 2026 as against 92 days as on 31st March 2025, wherein the group extends moderate credit to its customers. Against this, the creditor days stood at 113 days as on 31st March 2026 as against 96 days as on 31st March 2025. Acuité expects working capital operations of the group to remain in a similar range in the near to medium term owing to the nature of operations.
Moderation in profitability margins despite improved revenue from operations
The operating margin of the group stood at 5.23% in FY2026 as compared to 5.32% in FY2025, despite improvement in the group's topline The marginal moderation was primarily on account of higher foreign exchange losses along with increase in operating expenses during the year. Net profitability, however, declined sharply, with PAT margin at 0.09% from 1.15% in FY2025 owing to the absence of exceptional income during FY2026, as compared to a one-time gain of Rs. 6.20 crore reported in the previous year from profit on the sale of land and building. Additionally, high depreciation and finance costs exerted pressure on the net profitability. Nonetheless, the pre-tax profitability before exceptional items improved, with the PBT margin increasing to 1.07% from 0.82% in FY2025. Acuite notes that the ability of the group to improve its profitability margins in the near to medium term will remain a key rating sensitivity.
Competition from organized and unorganized players and Foreign currency fluctuation risk
The group operates in the highly fragmented and competitive leather industry, characterized by the presence of numerous organized and unorganized players. The intense competition limits pricing flexibility and exerts pressure on operating margins. Further, given the significant contribution of export sales to its revenue profile, the group remains exposed to foreign exchange fluctuation risk. Acuite notes that the group hedges its export exposures, which may help to mitigate the impact of adverse exchange rate movements to a certain extent.
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