Note:- For activities or ratings of instruments falling under the purview of Financial Sector Regulators other than SEBI, the grievance / dispute redressal mechanisms and investor protection mechanisms provided by SEBI shall not be available.
Rating Rationale
Acuité has reaffirmed its long-term rating of 'ACUITE A-' (read as ACUITE A minus) on the Rs. 160.00 Cr. bank facilities of Waman Hari Pethe Sons Private Limited (WHPSPL). The outlook is revised from 'Stable to Positive'.
Further, Acuite has assigned its long-term rating of 'ACUITE A-' (read as ACUITE A minus) on the Rs. 10 Cr. bank facilities of Waman Hari Pethe Sons Private Limited (WHPSPL). The outlook is 'Positive'.
Rationale for reaffirmation and positive outlook
The revision in outlook is on significant improvement in the profitability of the company in FY2026 and Q1 FY2027, which has led to healthy growth in the tangible networth and improvement in the overall financial risk profile. Going forward, the sustenance of such profitability levels will remain a key monitorable.
The rating reaffirmation considers the steady scale of operations, supported by the established brand presence of the company in the Mumbai Metropolitan region and surrounding regions. Further, the rating also draws comfort from the experienced management. The working capital cycle remains moderate. However, the rating is constrained on account of the volatile nature of gold as a commodity and regulatory risks associated with it, which may adversely impact the operations and profitability of the company.
About the Company
Established in 2001 as a partnership firm and converted into a private limited company in 2010, WHPSPL is a Mulund-based retailer of gold, diamond-studded and silver jewellery. The company operates 12 stores across Mumbai, Thane, Raigad, Solapur and Pune. The company is promoted by Mr. Subodh Pethe and Mrs. Sonali Pethe.
Unsupported Rating
Not Applicable
Analytical Approach
Acuité has considered the standalone business and financial risk profile of WHPSPL to arrive at the rating.
Key Rating Drivers
Strengths
Established track record and experienced management
WHPSPL has an established track record in the retail jewellery industry and is amongst the prominent gold jewellery retailers in Maharashtra. The company operates 12 stores across Mumbai, Thane, Raigad, Solapur and Pune, led by Mr. Subodh Pethe, who has over three decades of industry experience. The promoters are supported by an experienced management team, a professional workforce and longstanding relationships with over 200 artisans. Further, the company's established brand presence and focus on Maharashtrian style gold and studded jewellery support its market position.
Healthy financial risk profile
The financial risk profile of the company remained healthy, characterized by improved networth, low gearing and strong debt coverage metrics. The tangible networth of the company improved to Rs. 200.01 Cr. in FY2026 from Rs. 144.41 Cr. in FY2025, on account of generation of healthy profits. This led to improvement in the gearing levels, which stood at 0.79 times in FY2026 from 0.99 times in FY2025. Further, the TOL/TNW levels remain moderate at 1.10 times in FY2026. Further, the significant growth in EBITDA levels has led to improvement in the Debt-EBITDA levels, which stood at 1.65 times in FY2026 from 4.06 times in FY2025. The coverage indictors also stand strong with interest coverage ratio (ICR) at 7.08 times and debt service coverage ratio (DSCR) at 4.51 times in FY2026.
The financial risk profile of the company is expected to remain healthy over the medium term.
Strong improvement in operating profitability
The operating revenue of the company stood steady at Rs. 1060.87 Cr. in FY2026 as against Rs. 1041.17 Cr. in FY2025 on account of decline in sales volume amid high gold prices. However, the profitability of the company has improved significantly in FY2026. The EBITDA improved by ~3 times to Rs. 92.60 Cr. from 33.32 Cr. in FY2025. The EBITDA margin increased by ~550 bps to 8.73 times in FY2026 from 3.20 times in FY2025. The improvement in the operating profitability was driven by inventory led price gains, increased making charges and increase in share of high margin patented jewellery. The PAT stood at Rs. 55.87 Cr. (Rs. 15.16 Cr. in PY) and margin stood at 5.27 percent in FY2026 (1.46 percent in FY2025). For Q1 FY2027, the company recorded a revenue of Rs. 300 Cr. with an EBITDA margin of 10.35 percent. Further, the revenue in H1 FY2027 stood at Rs. 560 Cr. as against Rs. 345 Cr. in H1 FY2026.
Going forward, improvement in scale of operations while maintaining healthy profitability margins will be a key monitorable.
Weaknesses
Moderately intensive working capital operations
The working capital operations of WHPSPL are moderately intensive, with gross current assets (GCA) days of 114 days in FY2026. Since the company is into retail trading, they have very minimal receivables and hence debtor days are nil. The GCA days are majorly driven by inventory days, which stood at 121 days in FY2026. The average bank limit utilization stood at ~75 percent for the last twelve months ended May 2026.
Intense competition and exposure to regulatory risk
The highly fragmented nature of the gems and jewellery industry, coupled with the presence of a sizeable unorganised segment across retail and manufacturing, exposes the company to intense competition, pricing pressures and volatility arising from fluctuations in gold prices. Further, the industry remains susceptible to changes in government regulations, including those relating to gold imports, duties and compliance requirements, which may adversely affect the company’s operations and profitability.
Rating Sensitivities
Potential triggers (individual or collective) for an upward rating action:
Growth in operating revenue with sustenance of operating profitability margins higher than 7 - 7.5 percent.
Improvement in working capital cycle
Potential triggers (individual or collective) for a downward rating action:
Decline in scale of operations or operating profitability falling below 3.5 - 4 percent
Higher than expected increase in debt levels impacting financial risk profile
Elongation in working capital cycle
Liquidity Position
Strong
The liquidity position of the company is strong, with generation of healthy net cash accruals (NCAs) of Rs.60.58 Cr. against maturing debt obligations of Rs. 2.94 Cr. in FY2026. Going forward, the NCAs are expected to remain in the range of Rs. 45 – 65 Cr. against repayment obligations of Rs. 1.5 - 4.2 Cr. in FY2027 and FY2028. The current ratio stood healthy at 1.61 times on March 31, 2026. Further, the average bank limit utilization stood moderate at ~75 percent for the last twelve months ended May 2026. The company also had an unencumbered cash and bank balance of Rs. 2.23 Cr. on March 31, 2026.
Outlook: Positive
Other Factors affecting Rating
None
Particulars
Unit
FY 26 (Actual)
FY 25 (Actual)
Operating Income
Rs. Cr.
1060.87
1041.17
PAT
Rs. Cr.
55.87
15.16
PAT Margin
(%)
5.27
1.46
Total Debt/Tangible Net Worth
Times
0.79
0.99
PBDIT/Interest
Times
7.08
3.52
Status of non-cooperation with previous CRA (if applicable)
ACUITE A- | Positive | Reaffirmed | Stable to Positive
ICICI BANK LIMITED
Not avl. / Not appl.
Cash Credit
Unlisted
RBI
Not avl. / Not appl.
Not avl. / Not appl.
Not avl. / Not appl.
25.00
Simple
ACUITE A- | Positive | Reaffirmed | Stable to Positive
RBL Bank
Not avl. / Not appl.
Cash Credit
Unlisted
RBI
Not avl. / Not appl.
Not avl. / Not appl.
Not avl. / Not appl.
60.00
Simple
ACUITE A- | Positive | Reaffirmed | Stable to Positive
State Bank of India
Not avl. / Not appl.
Cash Credit
Unlisted
RBI
Not avl. / Not appl.
Not avl. / Not appl.
Not avl. / Not appl.
40.00
Simple
ACUITE A- | Positive | Reaffirmed | Stable to Positive
Not Applicable
Not avl. / Not appl.
Proposed Long Term Bank Facility
Unlisted
RBI
Not avl. / Not appl.
Not avl. / Not appl.
Not avl. / Not appl.
2.00
Simple
ACUITE A- | Positive | Assigned
State Bank of India
Not avl. / Not appl.
Working Capital Term Loan
Unlisted
RBI
Not avl. / Not appl.
Not avl. / Not appl.
25 May 2031
8.00
Simple
ACUITE A- | Positive | Assigned
Note:- For activities or ratings of instruments falling under the purview of Financial Sector Regulators other than SEBI, the grievance / dispute redressal mechanisms and investor protection mechanisms provided by SEBI shall not be available.
Contacts
List of instruments and names of regulators of the instruments
