Experienced management and established presence in the sea food industry
TOPPL has an operational track record of over two decades in seafood processing. It is promoted by Dr. Prakash Tolar who possess over two decades of experience in the sea food industry. He is supported by its team of experienced professionals in managing day to day operations of TOPPL. The extensive experience of the promoter has enabled TOPPL to establish a healthy relationship with its customers and suppliers. Acuité believes that TOPPL will continue to benefit from its experienced management and established track record of operations.

Moderation in revenues while maintaining profitability margins
TOPPL reported moderation in its revenue at Rs. 78.86 Cr. in FY2024 from Rs. 91.16 Cr. in FY2023 on account of decrease in the sale of its frozen fish in both domestic and exports market during the year. For the current year as on FY2025 (estimated), company has achieved revenue of Rs.99.18 Cr. with operating margin of 3.40 percent. The increase in the revenue is due to increase in demand and expansion to new locations for the business. The exports sales contributed to the range of 40 - 60 percent in FY2024 and FY2025. The major export countries are Vietnam, Thailand, Bangkok, China, Malaysia etc. The operating margin of the company has remained at similar lines at 3.98 percent in FY2024 as against 3.30 percent in FY2023. This is majorly on account of better absorption of administrative and selling & distribution expenses. The net profit margin of the company remained subdued at 0.62 percent in FY2024 as against 0.70 percent in FY2023 on account of marginally increased interest cost during the year. Acuite, believes the operating performance of the company would improve steadily owing to ongoing capex for value added products.

Comfortable financial risk profile 
Financial risk profile of TOPPL is comfortable marked by low net worth, moderate gearing and debt protection metrics. The net worth of the company stood improved at Rs. 9.71 Cr. as on 31 March, 2024 as against Rs. 9.22 Cr. as on 31 March, 2023 on account of moderate accretion to reserves. The gearing (debt-equity) stood at 1.74 times as on 31 March 2024 as against 1.61 times as on 31 March 2023 on account of increase in short term bank borrowings during the same period. The total debt of Rs.16.91 Cr. consists of Rs. 2.19 Cr. of long term debt, Rs. 13.62 Cr. of short term debt, Rs.0.07 Cr. and Rs.1.03 Cr. of current maturities of long term debt. The TOL/TNW stood at 2.25 times as on 31 March 2024 as against 2.26 times as on 31 March 2023. The interest coverage ratio (ICR) and Debt service coverage ratio (DSCR) stood at 1.90 times and 1.00 times for FY2024 as against 2.02 times and 0.94 times for FY2023 respectively. The Net Cash Accruals to Total debt stood at of 0.07 times for FY2024.

The company has undertaken capex for the total cost of Rs.13.00 Cr. for the machines and expansion of the cold storage capacity, it is expected to complete by December 2025. The capex will be funded through term loan of Rs. 9.40 Cr. and the rest through own funds. The capex would enable the company to process high-value-added products, leading to higher operating margins. Acuite believes that the, notwithstanding the benefits of capex, financial risk profile of the company would moderate to an extend owing to debt funded capex for the medium term.

Moderately intensive Working capital operations 
The operations of TOPPL are moderately working capital intensive marked by its high Gross Current Assets (GCA) of 125 days for FY2024 as against 105 days for FY2023. This is due to inventory cycle of the company which stood moderately high at 117 days in FY2024 as against 101 days in FY2023 on account of increase in the amount of unsold inventory of finished goods lying with the company in the form of frozen fish to readily meet the demand of customers in both domestic and exports market without any significant delays. The receivable days stood at 11 days in FY2024 as against 6 days in FY2023 whereas the creditor days stood at 27 days in FY2024 and in FY2023. In FY2025, operations of the company estimated to remain working capital intensive due to high inventory cycle. The average working capital limit utilization stood high at ~95 percent for 06 months period ended April 2025.

High competition and susceptibility to risks inherent in the sea food industry
TOPPL operates in a highly competitive industry with the presence of many organized as well as unorganized players in India. In addition to this, the company remains vulnerable to the inherent risks in the seafood industry. These include susceptibility to diseases, climate changes, and adverse changes in policies among others.

Susceptibility of profitability to volatility in input prices and Forex Risk
TOPPL exports ~62 per cent of its products and hence it is susceptible to the fluctuations in foreign exchange fluctuation. The company hedges its risk through forward contracts to an extent of ~50 per cent of its exposure. The raw material prices are also highly volatile depending on its availability, and the company is not able to pass on the price rise in entirety to its customers due to heavy competition. This keeps the margins exposed to market conditions.