Press Release

Press Release

October 23, 2025

TELANGANA STATE TRADE PROMOTION CORPORATION LIMITED
Rating Reaffirmed

Product	Quantum (Rs. Cr)	Long Term Rating	Short Term Rating
Bank Loan Ratings	50.00	ACUITE BBB \| Stable \| Reaffirmed	-
Total Outstanding	50.00	-	-
Total Withdrawn	0.00	-	-

Rating Rationale

Acuité has reaffirmed the long-term rating at 'ACUITE BBB' (read as ACUITE triple B) on the Rs. 50.00 crore bank facilities of Telangana State Trade Promotion Corporation Limited (TSTPCL). The outlook remains 'Stable.'

Rationale for reaffirmation
The rating reaffirmation takes into account the stable revenue growth and improvement in the profitability margins of TSTPCL. The rating also takes into account the improvement in the financial risk profile and strong parentage and assistance of Govt. of Telangana extended in the form of grants and promoting the entity’s business. The rating however, remains constrained on account of intensive working capital operations of TSTPCL.?

About the Company

TSTPCL was initially incorporated in 1970 as AP State Export – Import Corporation Limited and later renamed with state split in 2014. The primary objective of TSTPCL was trade promotion, providing trade promotion infrastructure facilities, organising trade fairs, trainings, seminars, exhibitions, etc. However, currently it majorly manufactures and sells note books and plain copier paper. Mr. Emmadi Vishnu Vardhan Reddy is the managing director of the organisation.

Unsupported Rating

Not Applicable

Analytical Approach

Acuité has considered the standalone business and financial risk profiles of TSTPCL and also factored the operational and financial assistance received from it's parent - Telangana State Government to arrive at the rating.

Key Rating Drivers

Strengths

Strong parentage and experienced management
TSTPCL is a 100% Government of Telangana owned enterprise. The state provides assistance to TSTPCL in various financial and traditional aspects. Further, TSTPCL supplies the notebooks to various welfare departments of the state government along with few departments of central government. Furthermore, the company receives grants from state government and has also been appointed as implementation agency for development of Unity Mall, Hyderabad (tallest mall in the city) against which TSTCPL has received a central government grant of Rs 101 Cr. in FY2025. Further, the company’s management includes civil officers appointed by the state.
Acuite believes that the Government of Telangana will continue to promote TSTPCL and extend financial aids as and when needed.

Moderate financial risk profile
The financial risk profile of the company is moderate, evident from its low gearing, moderate networth and adequate debt protection indicators. The networth of the company increased to Rs. 243.14 Cr. in FY2025 (Prov.) from Rs. 133.34 Cr. in FY2024 (Prov.), majorly on account of inflow of capital grants. The organisation is only dependent on working capital borrowings, therefore, gearing continues to remain below unity. The Debt-EBITDA levels, moderated to 2.63 times in FY2025 (Prov.) as against 0.49 times in FY2024 (Prov.) on account of increase in working capital utilisation. However, the interest coverage ratio remained healthy at 4.23 times in FY2025 (Prov.).
Going forward the financial risk profile is expected to remain on similar levels on account of no major debt funded capex plans over the near to medium term

Improving operating performance
The revenue of TSTPCL stood marginally improved at Rs. 123.05 Cr. in FY2025 (Prov.) from 119.58 Cr. in FY2024 (Prov.) and Rs. 52.04 Cr. in FY2023 (Prov.) driven by increase in sales volume despite lower realisation prices. The operating margin stood improved at 10.42 percent in FY2025 (Prov.) from 7.44 percent in FY2024 (Prov.) on account of decline in the raw material prices. The PAT margin stood at 8.48 percent in FY2025 (Prov.) as against 6.39 percent in the previous year. Further, till August 31, 2025, TSTPCL has generated revenue of ~80 Cr.

Weaknesses

Working capital intensive operations
The operations of TSTPCL continue to remain working capital intensive, which is evident from high GCA days of 672 on March 31, 2025 (Prov.). The GCA days have been elevated due to high inventory and receivable cycle. The inventory days stood at 110 and debtor days stood at 224 as on March 31, 2025 (Prov.). The creditor days stood low at 40 days on March 31, 2025 (Prov.), due to which they rely heavily on working capital limits. Therefore, the average bank limit utilization stood at 94.86 percent for the last seven months ended September 2025. Further, high cash balance as on year-end owing to capital grants has also contributed to elevated GCA days.

Susceptibility of margins to fluctuations in raw material prices
The raw material for TSTPCL includes paper, board, ink, and laminates as the raw materials. The prices for these products keep fluctuating rendering profitability susceptible to volatility in the price of paper. Any rise in their prices directly compresses the profitability margins, as seen in FY2023.

Assessment of Adequacy of Credit Enhancement under various scenarios including stress scenarios (applicable for ratings factoring specified support considerations with or without the “CE” suffix)

Telangana State Trade Promotion Corporation Limited (TSTPCL) receives parentage as well as operational & financial aids from the Government of Telangana (GoT).

Stress case Scenario
Acuite believes that, owing to the strong parentage and operational & financial linkages with GoT, TSTPCL is expected to service its working capital debt obligations on time, even in stress scenarios.

Rating Sensitivities

Stable revenue growth while sustaining profit margins
Significant increase in debt levels, thereby affecting the financial risk profile
Any change in assistance extended by the Government of Telangana.
Restriction of further elongation in working capital cycle.

Liquidity Position

Adequate

The adequate liquidity of TSTPCL is driven by generation of net cash accruals of Rs. 10.99 Cr. in FY2025 (Prov.) against no repayment obligations. The current ratio also stood healthy at 4.81 times on March 31, 2025 (Prov.). The average bank limit utilization stood at 94.86 percent for the last seven months ended September 2025.

Outlook: Stable

Other Factors affecting Rating

None

Key Financials

Particulars	Unit	FY 25 (Provisional)	FY 24 (Provisional)
Operating Income	Rs. Cr.	123.05	119.58
PAT	Rs. Cr.	10.43	7.64
PAT Margin	(%)	8.48	6.39
Total Debt/Tangible Net Worth	Times	0.16	0.04
PBDIT/Interest	Times	4.23	5.05

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

Not Applicable

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
• Group And Parent Support: https://www.acuite.in/view-rating-criteria-47.htm
• State Government Ratings : https://www.acuite.in/view-rating-criteria-26.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
25 Jul 2024	Proposed Long Term Bank Facility	Long Term	10.00	ACUITE BBB \| Stable (Upgraded from ACUITE BB+)
	Secured Overdraft	Long Term	20.00	ACUITE BBB \| Stable (Upgraded from ACUITE BB+)
	Working Capital Demand Loan (WCDL)	Long Term	20.00	ACUITE BBB \| Stable (Upgraded from ACUITE BB+)
06 Jul 2023	Proposed Secured Overdraft	Long Term	40.00	ACUITE BB+ (Reaffirmed & Issuer not co-operating*)
06 Jul 2023	Proposed Term Loan	Long Term	10.00	ACUITE BB+ (Reaffirmed & Issuer not co-operating*)
14 Apr 2022	Proposed Secured Overdraft	Long Term	40.00	ACUITE BB+ (Downgraded & Issuer not co-operating* from ACUITE BBB \| Stable)
14 Apr 2022	Proposed Long Term Loan	Long Term	10.00	ACUITE BB+ (Downgraded & Issuer not co-operating* from ACUITE BBB \| Stable)

Annexure - Details of instruments rated

Lender’s Name	ISIN	Facilities	Date Of Issuance	Coupon Rate	Maturity Date	Quantum (Rs. Cr.)	Complexity Level	Rating
Not Applicable	Not avl. / Not appl.	Proposed Long Term Bank Facility	Not avl. / Not appl.	Not avl. / Not appl.	Not avl. / Not appl.	10.00	Simple	ACUITE BBB \| Stable \| Reaffirmed
Canara Bank	Not avl. / Not appl.	Secured Overdraft	Not avl. / Not appl.	Not avl. / Not appl.	Not avl. / Not appl.	20.00	Simple	ACUITE BBB \| Stable \| Reaffirmed
Canara Bank	Not avl. / Not appl.	Working Capital Demand Loan (WCDL)	Not avl. / Not appl.	Not avl. / Not appl.	Not avl. / Not appl.	20.00	Simple	ACUITE BBB \| Stable \| Reaffirmed

*Annexure 2 - List of Entities (applicable for Consolidation or Parent / Group / Govt. Support)

Sr. No.	Company Name
1	Telangana State Trade Promotion Corporation Limited
2	Government of Telangana

Contacts

Mohit Jain
Chief Analytical Officer - Rating Operations

Kruti Patel
Associate Analyst - Rating Operations

Contact details exclusively for investors and lenders

Mob: +91 8591310146
Email ID: analyticalsupport@acuite.in

About Acuité Ratings & Research

Acuité is a full-service Credit Rating Agency registered with the Securities & Exchange Board of India (SEBI). The company received RBI Accreditation as an External Credit Assessment Institution (ECAI) for Bank Loan Ratings under BASEL-II norms in the year 2012. Acuité has assigned ratings to various securities, debt instruments and bank facilities of entities spread across the country and across a wide cross section of industries. It has its Registered and Head Office in Kanjurmarg, Mumbai.

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