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Benefits derived from Experienced promoters
The operations of the company is ably managed by Mr. Ajay Bangur, Executive Director under the supervision of two Non-Executive Directors namely, Mr. Hemant Bangur and Mr. Binod Kumar Khaitan and two Independent Directors namely, Mrs. Sonali Sen and Mr. Gautam Bhattacharya. All the directors have experiences in different industries like jute, timber, plantation, tea fertilizer among others. Collectively, their business acumen has driven the business to develop longstanding ties with its customers and suppliers. The company has also horizontally diversified into trading of Crop Protection Chemicals, Plant Growth promoters and high yielding variety seeds under Samadhan Brand. Acuite believes that the experience of promoters over decades in manufacturing fertilizers and relationship with customers and suppliers will benefit the company going forward.
Increase in revenues and stable operating profitability
The revenues have been increased to Rs. 145.63 Cr. as on March 31, 2026 as compared to Rs. 127.36 Cr. as on March 31, 2025 prior to that the revenue in FY24 Rs 114.97 Cr, primarily revenue increased in FY26 was because of improved subsidy rates provided by the government. Additionally, demand witnessed an uptick supported by a favorable sowing season in the West Bengal region. The enhancement in the Single Super Phosphate (SSP) subsidy has made it a more attractive and cost-effective domestic alternative to DiAmmonium Phosphate (DAP), thereby reducing India’s reliance on expensive DAP imports and, in turn, supporting higher sales of SSP fertilizers. Operating profitability stood at 6.60% as of March 31, 2026, compared to 6.64% as of March 31, 2025 versus 6.38 % in FY2024. The PAT margin improved to 3.10% in FY26, as against 2.72% in FY25. Acuite believes that the scale of operations and operating profitability will improve over the near to medium term.
Moderate Financial risk profile
The financial risk profile is moderate marked by an increase in the net worth to Rs. 92.18 Cr. as on March 31,2026 as compared to Rs. 87.87 Cr. as on March 31,2025 due to accretion of reserves. Gearing stood at 0.26 times as on March 31, 2026 as against 0.23 times as on March 31,2025. The Total Outside Liabilities/Tangible Net Worth (TOL/TNW) stood at 0.63 times as on March 31, 2026 as compared to 0.42 times as on March 31,2025. The debt protection metrics is marked by Interest Coverage Ratio at 2.98 times as on March 31, 2026 as compared to 2.95 times as on March 31,2025 and Debt Service Coverage Ratio at 1.59 times as on March 31, 2026 as compared to 1.53 times as on March 31,2025. Net Cash Accruals/Total Debt (NCA/TD) stood at 0.22 times as on March 31, 2026 as compared to 0.22 times as on March 31,2025. Acuité believes that going forward the financial risk profile will remain moderate over the medium term with steady cash accruals in the absence of any major debt funded capex plans.
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Intensive working capital management
The working capital cycle is intensive marked by Gross Current Assets (GCA) of 139 days as on March 31, 2026 as compared to 126 days as on March 31, 2025. The debtor days stood at 28 days as on March 31,2026 as compared to 21 days as on March 31, 2025. For off season, the days range from 100-120 days when the payments are received whereas for peak season, the payments are received immediately. Furthermore, the inventory days stood at 85 days as on March 31, 2026 as compared to 83 days as on March 31, 2025. The inventory days remain volatile on account of import of raw materials to avail price benefits. Around 50% of the raw materials are imported from Middle East countries like Egypt, Jordan, Israel, Morocco, among others. Additionally, due to the current geopolitical issues in the region, the company is maintaining higher inventory levels to mitigate supply chain disruptions and ensure continuity of operations. The other current assets amount to Rs. 12.69 Cr. as on March 31, 2026 as compared to Rs. 9.61 Cr. as on March 31, 2025 majorly comprises of Input Tax Receivable. Creditor days stood at 92 days as of March 31, 2026, compared to 42 days as of March 31, 2025. The increase in creditor days was primarily attributable to delays in the clearance of imported goods, which remained held at the port for inspection for more than 45 days. This led to a temporary build-up in creditor levels as of March 2026. However, the inspection process is expected to normalize in the medium term, which should subsequently reduce creditor days. Import purchases are backed by Letters of Credit (LCs) with a credit period of up to 180 days. For domestic suppliers, credit terms typically range between 21 to 45 days, with no advance payments made. Acuité believes that going forward the working capital operations of the company will remain moderate over the medium term.
Exposure to regulatory risks in the fertilizer industry
The fertilizer industry remains strategically important yet highly regulated, with subsidies forming a key component of profitability. Under the Nutrient-Based Subsidy (NBS) regime, subsidy rates are fixed by the Government, while retail prices are market-linked, exposing manufacturers to volatility in input costs, especially given their reliance on imported raw materials like rock phosphate and phosphoric acid. This, along with currency fluctuations, impacts margins. Additionally, delays in subsidy disbursements often stretch working capital and increase dependence on short-term borrowings. Any changes in subsidy policies or regulatory framework thus remain key rating sensitivities.
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