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| Product | Quantum (Rs. Cr) | Long Term Rating | Short Term Rating |
| Bank Loan Ratings | 4.15 | ACUITE BB+ | Stable | Assigned | - |
| Bank Loan Ratings | 30.80 | ACUITE BB+ | Stable | Reaffirmed | - |
| Bank Loan Ratings | 25.00 | - | ACUITE A4+ | Reaffirmed |
| Total Outstanding | 59.95 | - | - |
| Total Withdrawn | 0.00 | - | - |
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Rating Rationale |
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Acuité has reaffirmed its long-term rating of ‘ACUITE BB+’ (read as ACUITE double B Plus) and reaffirmed its short-term rating of ‘ACUITE A4+’ (read as ACUITE A four plus) on the Rs. 55.80 crore bank facilities of Veekay Plast Energy Limited (Erstwhile Veekay Plast) (VPEL). The outlook is 'Stable'.
Acuité has assigned its long-term rating of ‘ACUITE BB+’ (read as ACUITE double B Plus) on Rs. 4.15 crore bank facilities of Veekay Plast Energy Limited (Erstwhile Veekay Plast) (VPEL). The outlook is 'Stable'. Rationale for Rating The rating reaffirmation is on account of moderation in operating performance and financial risk profile marked by higher leverage ratios and expected further moderation in coverage ratios on the back of debt funded capex. The rating also factors in the experienced management. However, the rating is constrained by working capital intensive nature of operations with high bank limit utilisations, volatility in raw material prices amidst tender based nature of operations impacting profitability.
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| About the Company |
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Established in 1996, Veekay Plast (VP) began as a partnership firm and was later reconstituted as an unlisted public limited company on March 31, 2025, under the name Veekay Plast Energy Limited (VPEL). The company is currently managed by Mr. Sanjay Godika along with other directors. The company is engaged in the manufacturing of High-Density Polyethylene (HDPE) pipes, Double wall corrugated (DWC) pipes and Medium Density Polyethylene (MDPE) pipes catering to telecom, gas and water segment. The manufacturing facilities are located in Jaipur, Rajasthan and Hyderabad, Telangana.
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| Unsupported Rating |
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Not Applicable
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| Analytical Approach |
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For arriving at its rating, Acuité has considered the standalone business and financial risk profile of Veekay Plast Energy Limited (Erstwhile Veekay Plast) (VPEL).
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| Key Rating Drivers |
| Strengths |
| Long operational track record and experienced management
The Directors of Veekay Plast Energy Limited (Erstwhile Veekay Plast), Mr. Vijay Kumar Katiyar, Mrs. Reema Godika and Mr. Vimal Katiyar have more than two decades of experience in the pipe industry. Having more than two decades of operational track record has helped the company to maintain and establish strong relations with its customers as well as with its suppliers. The company is also setting up an 8 MW solar power plant driven by business acumen of the directors. Acuite believes that the company will leverage benefits from the experienced management over the medium term. Modest scale of operations with moderation in operating performance
The operating income of the company stood at Rs. 117.25 crore in FY2025 from Rs. 117.30 crore in FY2024. The operating profit margin of the company stood at 9.64 percent in FY2025 as against 10.80 percent in FY2024. The company has booked revenue of Rs. 55.07 crore till December 31, 2025. The expected revenue for FY2026 is Rs ~ 110-130 crore. The moderation is on account of headwinds and challenges persistent in plastic industry. The company has total orders in hand of Rs 113.65 crore are to be executed by end of next 3-4 Months. The PAT margins stood at 6.21 percent in FY2025 as against 6.12 percent in FY2024. Acuité believes, that the ability of the company to improve revenue and profitability will remain a key rating sensitivity.
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| Weaknesses |
| Average financial risk profile & capital structure driven by debt funded capex
The financial risk profile remains average marked by average debt protection metrics albeit moderate net worth and high gearing. The tangible net worth stood at Rs. 16.45 Cr. as on 31st March 2025 as compared to Rs. 35.81 Cr. as on 31st March, 2024. The decline in net worth is due to withdrawal of capital by partners to address capital requirements for conversion to Private Limited company on 31st March 2025. The company has a total debt of Rs. 39.81 Cr. as on March 31, 2025, as against Rs. 32.21 Cr. as on March 31, 2024. The total debt of Rs. 39.81 Cr. consists of Rs. 26.93 Cr. of short-term debt, Rs. 0.61 Cr. of long-term debt, Rs. 11.16 Cr. of unsecured loan from directors, Rs. 1.11 Cr. of current maturities of long-term debt. Therefore, the gearing (debt-equity) stood high at 2.42 times as on 31st March, 2025 as compared to 0.90 times as on 31st March, 2024. The Total Outside Liabilities/Tangible Net Worth (TOL/TNW) stood at 4.32 times as on 31 March 2025 as against 1.27 times as on 31 March 2024. Furthermore, the debt protection matrices of the company with interest coverage-ratio (ICR) and debt-service coverage-ratio (DSCR) of 3.46 times and 1.85 times for FY2025 as against 2.28 times and 1.55 times in FY2024 respectively. Also, the Debt to EBITDA of the company stood at 2.46 times for FY2025 as against 2.15 times for FY2024. The Net Cash Accruals to Total debt (NCA/TD) stood at of 0.21 times for FY2025. The company is in the final stages of setting up an 8 MW solar power plant in Bikaner, Rajasthan at an estimated cost of Rs. 46.10 crore. The project is being funded through a term loan of Rs. 32.20 crore for the tenure of 15 years with presence of debt service reserve account (DSRA) and ESCROW mechanism, wherein the balance Rs. 13.90 crore to be met through internal accruals and unsecured loans from promoters. The project is likely to commence by February 2026. The 8MW solar power plant will have a capacity to generate 5000 units per MW per day. VPEL has entered a PPA for 25 years with Jodhpur Vidyut Vitran Nigam Limited (JDVVNL) for sale of solar power with a fixed tariff of Rs. 3.37 (4MW) and Rs. 3.40 (4MW). Notwithstanding the benefits accrue due to capex which will contribute marginally in revenues and profitability, the financial risk profile is expected to deteriorate to an extent with high gearing and moderate coverage indicators. Working capital intensive operations The operations of the company remained working capital intensive marked by gross current asset (GCA) of 223 days in FY2025 as against 184 days in FY2024. GCA days are primarily led by high debtor days and other current assets (OCA). Debtor days stood at 148 days in FY2025, compared to 108 days in FY2024. The inventory holding stood at 73 days in FY2025 as against 81 days in FY2024. On the other hand, the creditors’ period stood moderate at 110 days in FY2025 as against 52 days in FY2024, owing to a moderate credit period of 30-60 days extended by the suppliers to the company. The average fund-based Bank Limit Utilization in last 06 months ended November 2025 stood high ~94.78 percent and with no utilisation of the non-fund-based limits. Acuite believes that the working capital operations of the company may continue to remain moderate over the medium term. Highly competitive industry with susceptibility of margins to volatility in raw material prices The pipes and fittings sector is marked by intense competition, with players from both organized and unorganized segments. The fragmented nature of the market restricts pricing flexibility of industry players. The key raw materials: plastic granules and master batch are derived from crude oil, making input costs highly sensitive to global price movements. Any sharp change in crude oil prices can directly affect profitability. While the company’s established supplier relationships provide some cushion by enabling fair price negotiations, the company’s ability to sustain operating margins over the medium term will remain an important factor to monitor. |
| 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) |
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Veekay Plast Energy Limited (formerly Veekay Plast) (VPEL) stipulates a Debt Service Reserve Account (DSRA) equivalent to three-months of repayment obligations along with ESCROW mechanism.
Stress case Scenario Acuité believes that, given the presence of DSRA and waterfall payment in ESCROW mechanism, Veekay Plast Energy Limited (formerly Veekay Plast) (VPEL) will be able to service its debt on time, even in a stress scenario. |
| Rating Sensitivities |
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| Liquidity Position |
| Adequate |
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The company generated sufficient net cash accruals (NCAs) of Rs. 8.52 Cr. against repayment obligations of Rs. 2.46 Cr. in FY2025. Going forward, the NCAs are expected to remain in the range of Rs. 5.00 Cr. – Rs. 6.00 Cr. against repayment obligations of Rs. 1.00 – Rs. 2.50 Cr. for FY2026 and FY2027. The current ratio stood at 1.24 times on March 31, 2025. Further, the company also had an unencumbered cash and bank balance of Rs. 2.19 Cr. on March 31, 2025. Also, the average fund-based Bank Limit Utilization in last 06 months ended November 2025 stood high ~94.78 percent and with no utilisation of the non-fund-based limits. Acuite believes that the liquidity would remain adequate due to steady cash accruals, moderate current ratio albeit high reliance on bank limits and debt funded capex plan over the medium term.
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| Outlook: Stable |
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| Other Factors affecting Rating |
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None
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| Particulars | Unit | FY 25 (Actual) | FY 24 (Actual) |
| Operating Income | Rs. Cr. | 117.25 | 117.30 |
| PAT | Rs. Cr. | 7.28 | 7.18 |
| PAT Margin | (%) | 6.21 | 6.12 |
| Total Debt/Tangible Net Worth | Times | 2.42 | 0.90 |
| PBDIT/Interest | Times | 3.46 | 2.28 |
| Status of non-cooperation with previous CRA (if applicable) |
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Not Applicable
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| Any other information |
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None
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| Applicable Criteria |
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• 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 |
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