Press Release September 02, 2026 SWARAJ SUITING 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	123.09	ACUITE A- | Stable | Assigned	-	RBI
Total Outstanding	0.00	123.09	-	-	-
Total Withdrawn	0.00	0.00	-	-	-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

­Acuite has assigned its long term rating of 'ACUITE A-' (read as ACUITE A minus) on the Rs. 123.09 Cr. bank facilities of Swaraj Suiting Limited (SSL). The outlook is 'Stable'. Rationale for Rating The assigned rating derives strength from the extensive experience of the promoters, who possess over two decades of industry expertise in the textile sector. Leveraging their erstwhile exclusive job-work model, the company commenced its own manufacturing operations in 2022 and has since established significant capabilities in the production of denim and cotton finished products. The rating further factors in the company's improving scale of operations and profitability margins over the years, supported by a strengthened financial risk profile following equity fund infusion and its strong liquidity position. The company has raised funds aggregating to around Rs. 263 crore through the issuance of warrants and preference shares towards funding its ongoing capital expenditure programme and working capital requirements. Of the total amount, approximately Rs. 132 crore has already been received in FY 26, while the balance is expected to be infused by March 2027. Acuite also notes the company's consistent capital expenditure initiatives over the past two to three years through addition of production lines, technology upgrades, modifications and backward integration measures. These investments have supported the company's growth trajectory, reflected in improved revenue levels and profitability margins. As part of its backward integration strategy, the company is currently setting up new spinning lines and expanding its spinning capacity. The proposed project entails a total cost of approximately Rs. 421.36 crore and is expected to be funded through a mix of external debt and internal accruals/equity contribution. The company has already incurred an expenditure of around Rs. 73.59 crore as on May 5, 2026, through fund infusion, while financial closure for the balance project cost remains pending. Timely financial closure and successful completion of the ongoing capital expenditure programme will remain a key monitorable over the medium term. The above strengths are, however, constrained by the company's working capital intensive nature of operations, as reflected in elevated GCA days of 273 days in FY 26 and profitability remains exposed to volatility in raw material prices.

About the Company

Rajasthan-based Swaraj Suiting Limited (SSL), incorporated in 2003, is engaged in the manufacturing and processing of premium denim, cotton and synthetic fabrics for both domestic and export markets. Promoted by Mr. Mohammed Sabir Khan, Ms. Samar Khan and Mr. Nasir Khan, the company was reconstituted from a private limited company to a public limited company in March 2022 and is listed on the National Stock Exchange. SSL operates two manufacturing facilities at Bhilwara (Rajasthan) and Neemuch (Madhya Pradesh). The company's operations are overseen by an experienced management team comprising Mr. Mohammed Sabir Khan, Ms. Samar Khan, Mr. Nasir Khan, Ms. Amreen Sheikh, Ms. Annie Zuberi and Ms. Anam Hamid as directors.

Unsupported Rating

­Not Applicable.

Analytical Approach

Acuite has considered standalone business & financial risk profile of Swaraj Suiting Limited (SSL) to derive at the rating.­

Key Rating Drivers

Strengths

­Extensive industry experience of the promoters The company draws strength from the extensive experience of the promoters, who collectively possess over two decades of experience in the textile industry. Their established understanding of industry dynamics, coupled with long-standing relationships with customers, suppliers and other stakeholders, has supported the company's operational performance and business growth over the years. The promoters bring significant expertise across key functional areas including production, marketing, finance and commercial management. Under their leadership, SSL has undertaken various strategic initiatives aimed at strengthening its presence across the textile value chain through backward and forward integration. Acuite believes that the promoters' extensive industry experience and demonstrated execution capabilities will support the timely completion of the ongoing capital expenditure, enable the company to derive the intended operational benefits from the investments, and help maintain strong relationships with customers and suppliers over the long term. Improving Scale of Operations & Profitability The company has demonstrated a strong growth trajectory over the last four years, with its operating income increasing at a CAGR of 38.20% from Rs. 219.79 crore in FY 23 to Rs. 581.44 crore in FY 26.During FY26, the company reported a significant increase in sales, with operating income rising by 39.2% to Rs. 581.44 crore in FY 26 from Rs. 418.38 crore in FY 25. The company's profitability has also improved materially over the years. EBITDA grew by 54.9% from Rs. 75.03 crore in FY 25 to Rs. 116.24 crore in FY 26, with EBITDA margin improving to 19.99% in FY26 from 17.93% in FY25. As a result, PAT margin improved to 9.01% in FY26 from 7.96% in FY25, reflecting the operating leverage benefits arising from the company's expanding scale of operations. The improvement in operating margins was driven by a favourable product mix, regular capex for upgradation & modification of the plant, higher contribution from value-added fabric sales, improved capacity utilization across the integrated textile chain, and better absorption of fixed costs. Further, the company booked net revenue of Rs. 183.37 Cr. with EBITDA of Rs. 35.52 Cr. and PAT of Rs. 16.22 Cr. during Q1 FY 27. Acuite believes that the company's integrated operations, continued focus on value-added products and ongoing capacity enhancement initiatives are likely to support its growth momentum and sustain healthy profitability levels over the medium term. Healthy Financial Risk Profile The financial risk profile of the company is healthy marked by high net worth, gearing below unity and comfortable debt coverage indicators. The tangible net worth of the company improved from Rs. 151.74 crores as on 31st March 2025 to Rs. 335.87 crores as on 31st March 2026. The improvement is mainly due to fresh infusion of funds through preferential allotment of equity shares & convertible warrants and accretion of profits into reserves. The gearing ratio is improved from 1.77 times for FY 25 to 0.90 times for FY 26. TOL/TNW improved from 2.75 times for FY 25 to 1.54 times for FY 26. Debt/EBITDA improved & stood at 2.51 times for FY 26 against 3.57 times for FY 25. The debt coverage indicators (i.e. ISCR & DSCR) are comfortable marked by 3.95 times & 2.25 times respectively. Acuite believes that the company's financial risk profile is likely to remain healthy over the medium term, supported by steady cash accrual generation from operations and the expected receipt of the remaining tranche of funds through convertible warrants. While the company has undertaken a debt-funded capital expenditure programme, its healthy accruals, planned equity infusion and improved profitability are expected to provide adequate financial flexibility and support its capital structure during the project implementation phase.

Weaknesses

Intensive Working Capital Operations The working capital operations of the company is intensive marked by GCA days of 273 for FY 26. The intensiveness is mainly due to high inventory holding period of 185 days. This elevated inventory level is inherent to the textile industry which involve maintaining substantial stocks of raw materials (cotton, yarn, dyes, and chemicals), work-in-progress, and finished fabrics to ensure uninterrupted production and timely order fulfilment. The company manufactures a diversified range of suiting fabrics and value-added textile products, necessitating higher inventory across multiple product categories, designs, and shades. It is also elevated due to stocking of raw materials in anticipation of demand requirements and to mitigate raw material price volatility. The debtor days have improved from 88 in FY 25 to 78 in FY 26 indicating faster realization of bills. Acuite believes that the company’s working capital operations will remain intensive over the medium term, driven by the inherent nature of its operations and sustained high inventory holding levels. Profitability remains susceptible to volatility in raw material prices: SSL's profitability remains exposed to fluctuations in the prices of key raw materials, particularly cotton, yarn and other textile inputs, which constitute a significant portion of its operating costs. Any adverse movement in raw material prices, especially in the absence of timely pass-through to customers, could exert pressure on the company's operating margins. Nevertheless, the company's integrated operations and focus on value-added products provide some cushion against such pricing volatility.

Rating Sensitivities

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

­Sustained improvement in scale of operations, with revenue growth of 40-45%, while maintaining healthy operating margins. Improvement in capital structure and debt protection metrics on a sustained basis. Timely completion and successful stabilization of the ongoing capital expenditure program.

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

­Undertaking any additional major debt-funded capital expenditure project beyond the currently ongoing capex. Deterioration in the financial risk profile, reflected by Debt/EBITDA exceeding 3.5 times on a sustained basis.

Liquidity Position

Strong

­The liquidity position of the company is strong marked by generating net cash accrual of Rs. 74.88 Cr. in FY26 against principal repayment of Rs. 16.37 Cr. indication surplus cushion for any future endeavours. The company has free cash & bank balance of Rs. 10.58 crores and free fixed deposit of Rs. 13.45 crores as on 31st March 2026. The average fund-based utilization for last 9 months ending June 2026 is 80.83%. The current ratio stood comfortable at 1.53 times for FY 26. Further, the company’s liquidity is supported by the expected infusion of approximately Rs. 131 crores through the conversion of warrants by March 2027, of which around Rs. 60-65 crore is proposed to be utilized towards the ongoing capex, and the balance will be utilized towards working capital requirements. Acuite believes that the Company’s liquidity position will remain strong over the medium term, supported by steady cash accruals and the expected equity infusion through warrant conversions.

Outlook: Stable

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Other Factors affecting Rating

­None

Key Financials

Particulars	Unit	FY 26 (Actual)	FY 25 (Actual)
Operating Income	Rs. Cr.	581.44	418.38
PAT	Rs. Cr.	52.37	33.32
PAT Margin	(%)	9.01	7.96
Total Debt/Tangible Net Worth	Times	0.90	1.77
PBDIT/Interest	Times	3.95	3.94

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

Date Name of Instruments/Facilities Term Amount (Rs. Cr) Rating/Outlook 07 Jul 2025 Term Loan Long Term 40.00 ACUITE BB+ (Reaffirmed & Withdrawn & Issuer not co-operating*) Cash Credit Long Term 10.00 ACUITE BB+ (Reaffirmed & Withdrawn & Issuer not co-operating*) 18 Apr 2025 Term Loan Long Term 22.99 ACUITE BB+ (Downgraded & Withdrawn & Issuer not co-operating* from ACUITE BBB- | Stable) Covid Emergency Line. Long Term 1.56 ACUITE BB+ (Downgraded & Withdrawn & Issuer not co-operating* from ACUITE BBB- | Stable) Covid Emergency Line. Long Term 0.92 ACUITE BB+ (Downgraded & Withdrawn & Issuer not co-operating* from ACUITE BBB- | Stable) Term Loan Long Term 30.00 ACUITE BB+ (Downgraded & Withdrawn & Issuer not co-operating* from ACUITE BBB- | Stable) Cash Credit Long Term 30.00 ACUITE BB+ (Downgraded & Withdrawn & Issuer not co-operating* from ACUITE BBB- | Stable) Term Loan Long Term 35.00 ACUITE BB+ (Downgraded & Withdrawn & Issuer not co-operating* from ACUITE BBB- | Stable) Term Loan Long Term 40.00 ACUITE BB+ (Downgraded & Issuer not co-operating* from ACUITE BBB- | Stable) Cash Credit Long Term 10.00 ACUITE BB+ (Downgraded & Issuer not co-operating* from ACUITE BBB- | Stable) Term Loan Long Term 10.56 ACUITE BB+ (Downgraded & Withdrawn & Issuer not co-operating* from ACUITE BBB- | Stable) Covid Emergency Line. Long Term 3.12 ACUITE BB+ (Downgraded & Withdrawn & Issuer not co-operating* from ACUITE BBB- | Stable) Cash Credit Long Term 11.00 ACUITE BB+ (Downgraded & Withdrawn & Issuer not co-operating* from ACUITE BBB- | Stable) Term Loan Long Term 13.64 ACUITE BB+ (Downgraded & Withdrawn & Issuer not co-operating* from ACUITE BBB- | Stable) Term Loan Long Term 41.61 ACUITE BB+ (Downgraded & Withdrawn & Issuer not co-operating* from ACUITE BBB- | Stable) Cash Credit Long Term 29.00 ACUITE BB+ (Downgraded & Withdrawn & Issuer not co-operating* from ACUITE BBB- | Stable) Proposed Long Term Bank Facility Long Term 0.60 ACUITE Not Applicable (Withdrawn) 19 Jan 2024 Term Loan Long Term 22.99 ACUITE BBB- | Stable (Reaffirmed) Covid Emergency Line. Long Term 1.56 ACUITE BBB- | Stable (Reaffirmed) Covid Emergency Line. Long Term 0.92 ACUITE BBB- | Stable (Reaffirmed) Term Loan Long Term 35.00 ACUITE BBB- | Stable (Reaffirmed) Term Loan Long Term 40.00 ACUITE BBB- | Stable (Reaffirmed) Term Loan Long Term 10.56 ACUITE BBB- | Stable (Reaffirmed) Covid Emergency Line. Long Term 3.12 ACUITE BBB- | Stable (Reaffirmed) Cash Credit Long Term 11.00 ACUITE BBB- | Stable (Reaffirmed) Term Loan Long Term 13.64 ACUITE BBB- | Stable (Reaffirmed) Term Loan Long Term 41.61 ACUITE BBB- | Stable (Reaffirmed) Term Loan Long Term 30.00 ACUITE BBB- | Stable (Reaffirmed) Cash Credit Long Term 20.00 ACUITE BBB- | Stable (Reaffirmed) Cash Credit Long Term 10.00 ACUITE BBB- | Stable (Assigned) Cash Credit Long Term 19.00 ACUITE BBB- | Stable (Reaffirmed) Cash Credit Long Term 10.00 ACUITE BBB- | Stable (Assigned) Proposed Long Term Bank Facility Long Term 0.60 ACUITE BBB- | Stable (Reaffirmed) Cash Credit Long Term 10.00 ACUITE BBB- | Stable (Assigned) 07 Nov 2023 Term Loan Long Term 22.99 ACUITE BBB- | Stable (Assigned) Covid Emergency Line. Long Term 0.92 ACUITE BBB- | Stable (Assigned) Term Loan Long Term 35.00 ACUITE BBB- | Stable (Assigned) Term Loan Long Term 40.00 ACUITE BBB- | Stable (Assigned) Working Capital Term Loan Long Term 11.00 ACUITE BBB- | Stable (Assigned) Term Loan Long Term 13.64 ACUITE BBB- | Stable (Assigned) Term Loan Long Term 41.61 ACUITE BBB- | Stable (Assigned) Term Loan Long Term 30.00 ACUITE BBB- | Stable (Assigned) Working Capital Term Loan Long Term 20.00 ACUITE BBB- | Stable (Assigned) Working Capital Term Loan Long Term 19.00 ACUITE BBB- | Stable (Assigned) Proposed Long Term Bank Facility Long Term 0.60 ACUITE BBB- | Stable (Assigned) Term Loan Long Term 10.56 ACUITE BBB- | Stable (Assigned) Covid Emergency Line. Long Term 1.56 ACUITE BBB- | Stable (Assigned) Covid Emergency Line. Long Term 3.12 ACUITE BBB- | Stable (Assigned)

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Contacts

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

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