Acuité has considered the consolidated view of the business and financial risk profiles of Viswaat Chemicals Limited (VCL) and Viswaat Organics Private Limited (VOPL) to arrive at the rating. The consolidation is in the view of VOPL being wholly owned subsidiary of VCL, common line of business, operational synergies and common management.

Significant Improvement in Revenue and overall profitability margins
The revenue of the group increased and stood at Rs. 975.76 crore in FY25 compared to revenue of Rs. 766.15 crore in FY24. The group recorded a Y-o-Y growth of 27.36 per cent in its operating income. VCL generates its revenue from four main products: Surfactants, Textiles, Specialty Chemicals, and Job Work. Surfactants alone account for 90.24 per cent, Specialty Chemicals for 4.64 per cent, Textiles for 4.76 per cent, and Job Work and others for 0.36 per cent. The revenue of the group increased in FY25 on account of an increase in the orders for surfactants and onboarding of new clients, Hindustan Unilever Limited being one of them. VCL has recorded a revenue of around Rs. 538.00 crore in H1FY2026 and the company is expecting a total revenue of around Rs. 1100 crore for FY26. The groups exports contribute to around 20% of the total sales of FY25. Some of the key export markets of the company include – Bangladesh, Central America, China, Colombia, Egypt, Ethopia, Finland, Indonesia, Italy, Germany, Kenya, Korea, Middle East, Sri Lanka, Switzerland, Nepal, Netherlands, Nigeria, Pakistan, Singapore, Spain, Taiwan, Thailand, Turkey and USA. 60 per cent of the exports are in Euro and 40 per cent in USD. The operating profit margin of the group stood improved at 8.48 percent in FY25 compared against 8.03 percent in FY24. The PAT margin of the group stood higher at 4.36 percent in FY25 compared to 3.84 percent in FY24.

Healthy Financial risk profile
The group has a healthy financial risk profile marked by moderate net worth, low gearing and comfortable debt protection metrics. The group’s tangible net worth stood marginally improved at Rs. 215.84 crore as of March 31, 2025, against Rs. 173.56 crore as of March 31, 2024, on account of accretion of profits to reserves. The group’s gearing stood similarly at 0.79 times as on March 31,2025. The group’s total debt as on March 31, 2025, stood at Rs. 170.72 crore as compared to Rs. 131.21 crore as on March 31, 2024; comprising of long-term debt of Rs. 69.12 crore, short-term debt of Rs. 75.30 crore and maturing debt obligations of Rs. 26.29 crore. TOL/TNW stood at 1.24 times as on March 31, 2025. The interest coverage ratio of the group stood improved at 6.30 times in FY25 against 6.10 times in FY24. DSCR stood at 2.46 times in FY2025 against 2.14 times in FY2024. 

Moderate Working capital management
The group has moderate working capital operations with average gross current asset (GCA) days standing around 106 days during FY23 to FY25. GCA days stood rangebound at 104 days in FY2025 as against 104 days in FY2024. Inventory days stood at 18 days in FY2025 against 17 days in FY2024. Raw materials consist of various types of chemicals like Ethylene Oxide and fatty acids. The debtor days stood similarly at 68 days for FY25 against 63 days for FY24. The average credit period allowed to its customers is around 60-90 days. The creditor days of the group stood at 33 days for FY25 as against 30 days for FY24. The average credit period allowed by the suppliers is around 0 to 30 days. Furthermore, the average bank limit utilisation for 06 months period ended October 2025 stood in the range of 50 to 51 per cent for fund-based limits and around 52- 53 per cent for non-fund-based limits.

Susceptibility of profitability to input price volatility and increasing competition
Ethylene oxide is the major raw material for the company. The prices of the raw material is highly volatile in nature and any adverse movement in the price of raw material may impact the profitability of the company. Further, the company operates in a highly fragmented chemical industry with the presence of large number of players in the organised as well as unorganised sector. This limits the bargaining power of VCL’s with customers leading to intense margin pressures. However, the longstanding customer relationships moderates this risk to an extent.