| Long operational track record and experienced Management
Tirupati Starch and Chemicals Limited (TSCL) was established in 1985 by late Mr. Damodar Modi, Mr. Ramdas Goyal and Mr. Prakash Chandra Bafna. Mr. Ramdas Goyal holds an overall experience of around four decades in the business of Maize Starch, dextrose and other chemicals. Mr. Prakash Chandra Bafna holds an overall experience of around three decades in manufacturing and trading of chemicals and he also takes care of procurement of raw material and other purchases. The promoters are supported by Mr. Amit Modi and Mr. Yogesh Kumar Agarwal, both of whom hold extensive experience of more than two decades in the business. Extensive experience of the management has helped TSCL establish healthy relationships with customers and suppliers in the industry over the years.
Moderation in operating performance
The company’s revenue improved to Rs. 390.05 Cr. in FY2025, compared with Rs. 306.34 Cr. in FY2024, driven primarily by higher sales volumes despite some moderation in price realisations. A marginal reduction in operating expenses such as power and administrative costs also supported profitability. Consequently, the operating margin increased to 7.32 per cent in FY2025 from 6.76 per cent in FY2024, while the PAT margin improved to 1.93 per cent from 0.68 per cent in the previous year. Further, during 9MFY26, the company recorded a moderation in performance compared with 9MFY25, as operating income declined to Rs. 273.40 Cr. from Rs. 288.72 Cr. EBITDA reduced to Rs. 17.07 Cr. from Rs. 21.02 Cr, with the EBITDA margin declining to 6.24 per cent from 7.28 per cent. Profitability weakened further with PAT falling to Rs. 4.13 Cr from Rs. 6.00 Cr, resulting in a lower PAT margin of 1.51 per cent versus 2.08 per cent in the previous period. The decline in revenue and contraction in profitability margins indicate pressure on the company’s operating performance during the period. Acuite believes that the company’s ability to restore profitability metrics and revenues by timely commencement of additional capacities will remain a key determinant of its credit risk profile going forward.
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| Moderate Financial Risk Profile
The company’s financial risk profile remained moderate, supported by an improvement in tangible net worth to Rs. 84.36 Cr. as on March 31, 2025, from Rs. 74.16 Cr. in the previous year. The net worth includes Rs. 23.66 Cr. of quasi-equity in FY25, with the increase largely driven by profit accretion to reserves. Gearing (debt to equity) improved to 1.33 times as on March 31, 2025, from 1.79 times as on March 31, 2024, aided by a reduction in total debt to Rs. 112.21 Cr. from Rs. 132.81 Cr, the prior year. The debt profile comprises long-term borrowings of Rs. 50.27 Cr, unsecured loans of Rs. 1.16 Cr, short-term borrowings of Rs. 42.94 Cr, and CPLTD of Rs. 17.84 Cr. Interest coverage ratio (ICR) stood at 2.68 times in FY25 from 2.07 times in FY24, while debt service coverage ratio (DSCR) deteriorated to 0.99 times from 1.20 times, reflecting higher repayment obligations during the year as against low net cash accruals. The shortfall is funded through unsecured loans from promoters. Further, the company is undergoing a capex for capacity expansion of starch maize products of Rs.40 Cr. which will be funded equally through internal accruals and term loans. Acuite believes that the company’s ability to prudently manage its leverage and maintain adequate coverage metrics will remain essential for sustaining its credit risk profile.
Moderately intensive working capital operations
The company’s working capital cycle has shown improvement, as reflected in the improvement in of gross current assets (GCA) of 83 days as on March 31, 2025 from 118 days in the previous year. Inventory days moderated to 43 days in FY25 from 62 days in FY24, with the average inventory holding period remaining in the range of 15–30 days. Debtor days improved to 37 days in FY25 compared with 42 days in FY24, while the company allows an average credit period of around 45 days to its customers. Creditor days increased to 23 days in FY25 from 13 days in FY24, with an average credit period of approximately 15 days received from suppliers. The utilisation of bank limits remained high at around 91 per cent for the six months ending August 2025. Acuite believes that the company’s ability to maintain disciplined working capital management will remain a key monitorable.
Susceptibility of profitability to raw-material price fluctuations in a competitive industry
The company’s profitability remains vulnerable to fluctuations in maize prices, which form the key raw material for its starch and derivative products. Being an agro-based input, maize prices are inherently volatile and influenced by factors such as monsoon patterns, crop yields, government policies, and global demand–supply dynamics. In addition, the maize-processing industry is highly competitive with limited pricing flexibility, restricting TSCL’s ability to fully pass on increases in raw-material costs to customers. This exposes the company’s margins to volatility, especially during periods of sharp input price movements.
Competitive nature of industry and high dependence on environmental conditions
Starch industry in India is highly fragmented, marked by presence of a variety of organized and unorganized manufacturers offering different types and derivatives of starch thereby limiting TSCL's pricing power. Further, TSCL uses maize as the raw material for almost all of its products and the prices of maize are susceptible to volatility due to factors such as weather conditions, revision in minimum support price of maize by the government and demand and supply scenario in the agricultural markets. The prices for maize had increased during the last year. Thus, increase in raw material prices and the competitive nature of the industry affects profitability of the company.
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