Rating Rationale
June 09, 2025 | Mumbai
Aelea Commodities Limited
Rating outlook revised to 'Negative'; Ratings Reaffirmed
 
Rating Action
Total Bank Loan Facilities RatedRs.95 Crore
Long Term RatingCrisil BBB/Negative (Outlook revised from 'Stable'; Rating Reaffirmed)
Short Term RatingCrisil A3+ (Reaffirmed)
Note: None of the Directors on Crisil Ratings Limited’s Board are members of rating committee and thus do not participate in discussion or assignment of any ratings. The Board of Directors also does not discuss any ratings at its meetings.
1 crore = 10 million
Refer to Annexure for Details of Instruments & Bank Facilities

Detailed Rationale

Crisil Ratings has revised its outlook on the long-term bank facilities of Aelea Commodities Limited (ACL) to ‘Negative’ from ‘Stable' while reaffirming the rating at 'Crisil BBB‘. The short-term rating has been reaffirmed at ‘Crisil A3+’.

 

The revision in outlook reflects weakening of business risk profile, in fiscal 2025 primarily in second half of fiscal 2025. The company reported operating losses in the second half of fiscal 2025 as compared to operating margins of around 10.8% in first half. This was due to delays in commencement of the new manufacturing unit leading to which the company was procuring intermediate products from external suppliers, which significantly impacted the gross margins. A sustained weak operating performance could impact the liquidity in near term. Hence, sustained improvement in business performance and liquidity would be a key monitorable.

 

The ratings reflect the company’s established presence in the cashew processing sector and strong relationships with suppliers and customers, leading to steady growth in scale over the last two fiscals and comnfortable financial risk profile. These strengths are partially offset by Susceptibility to volatility in cashew prices and forex rates, Working capital intensive nature of operations and Exposure to intense competition.

Analytical Approach

Crisil Ratings has also combined the business and financial risk profiles of Aelea and its subsidiaries, considering the operational and financial linkages between the entities. With adoption of Ind AS 116 effective April 1, 2019, lease liabilities are treated as debt, while related adjustments are made for depreciation and amortisation and interest cost components.

 

Please refer Annexure - List of Entities Consolidated, which captures the list of entities considered and their analytical treatment of consolidation.

 

Key Rating Drivers & Detailed Description

Strengths:

  • Promoter’s strong experience and healthy relationship with customers: The promoters’ extensive experience, over the past few decades, has provided them with a deep understanding of the market dynamics. This has further provided them with a long-standing relationship with established relationships with customers leading to continuous repeat orders from them. Clientele includes marquee names such as Reliance Retail Ltd (‘Crisil AAA/Stable/Crisil A1+’), ITC Ltd (‘Crisil AAA/Stable/Crisil A1+’), Britannia Industries (‘Crisil AAA/Stable/Crisil A1+’), Farmley, etc. Healthy association with suppliers also provides easier access to raw cashew nuts. In fiscal 2024, nearly 57% of revenue came from sale of processed cashew, while the balance came from trading of agriculture commodities. The revenues from processing of cashew increased to 74% in fiscal 2025. Operating income has been growing for the past few fiscals and the company has achieved revenues of around Rs 180-183 crore for fiscal 2025 as compared to Rs 137 crore in fiscal 2024. Th e scale of information is further expected to grow driven by the new plant now being fully operational.

 

  • Comfortable financial risk profile: Networth and gearing stood at around Rs 95-100 crore and 0.1 time, respectively, as on March 31, 2025, (Rs 45 crore and 0.9 times respectively as on March 31st 2024) backed by steady accretion to reserves as well as equity raised in fiscal 2025 of Rs 51 crore. The same is expected to improve steadily in the absence of any large debt funded capex. Debt protection metrics deteriorated in fiscal 2025 as reflected in interest coverage and net cash accrual to total debt ratios  of around 1.8 and 0.2 times respectively as compared to 4 times and 0.32 time, respectively, in fiscal 202. This is due to the weakening of operating margins. The same is expected to improve with improvement in margins and would be a key monitorable.

 

Weaknesses:

  • Susceptibility to volatility in cashew prices and forex rates: Operating margin remains subject to volatility in prices of raw cashew nuts and processed cashew kernels. Since part of the raw material is imported, any sharp fluctuation in forex rates affects realizations and cash accrual. This exposes the operating margin to fluctuations in cashew prices and forex rates. Further operating margins have been volatile in the range of 5.5-13.5% over the past three fiscals through fiscal 2025 and has been impacted significantly in the second half of fiscal 2025 with the company reporting operating losses for the period. This was due to procurement of intermediate products for external suppliers, hence impacting the gross margins. Improvement in operating margin remains a key monitorable over the medium term.

 

  • Working capital intensive nature of operations: The company’s operations are highly working capital intensive as indicated by gross current assets (GCA) at 190-195 days as on March 31, 2025. High GCA days are on account of the large inventory and moderately receivables of around 100-105 days and 60-65 days. Receivables are moderate due to the moderate credit period extended to customers. The company maintains a large inventory to meet customer requirements on time. The working capital cycle is expected to remain intensive over the medium term.

 

  • Exposure to intense competition: The cashew processing industry is highly fragmented, marked by low entry barriers. Competition from several unorganised players limits the bargaining power and pricing flexibility. This risk is mitigated by the strong track record of operations of the company and healthy relationships with suppliers and customers.

Liquidity: Adequate

Cash accrual are expected of Rs 17-23 crore which would be against minimal annual debt obligation of around 0.5-0.6 crore. Bank limit utilisation was moderate averaging 60% on for the six months through March 2025. Current ratio was moderate at 1.5 times as on March 31, 2024. Moderate  cash and bank balance of Rs 2.5-3 crore as on March 31st 2025. Low gearing and healthy networth provide financial flexibility to raise additional debt in case of any adverse conditions or downturns in the business.

Outlook: Negative

Crisil Ratings believes the business risk profile ACL may remain under pressure over the medium term owing to low profitability.

Rating sensitivity factors

Upward Factors:

  • Healthy ramp-up of new manufacturing unit, coupled with operating margin improving to around 9%, leading to higher cash accrual
  • Improvement in financial profile of the company

 

Downward Factors:

  • Slower-than-expected ramp-up in operations or operating margin of less than 6% leading to lower cash accrual
  • Stretched working capital cycle increasing reliance on debt and leading to moderation in liquidity from the current levels

About the Company

Aelea was incorporated in 2018, by the promoters, Mr Ashok Purshottam Patel, Mr Firoz Gulamhusein Hathiyari, Mr Hozefa Shabbir Jawadwala and Mr Satyanarayan Patro. The company started operations by trading in agro commodities (primarily sugar, rice and wheat flour). In fiscal 2022, it started processing raw cashew nuts capacity in Surat, Gujarat. The company markets processed cashews under its brands, Supreme and Tryble.

 

The company was listed on the National Stock Exchange and the Bombay Stock Exchange on July 22, 2024. Post IPO, the promoters hold nearly 63.66% stake, while the balance shareholding is held by the public

Key Financial Indicators

As on/for the period ended March 31

Unit

12M FY2025

2024

2023

Operating income

Rs crore

182

142

109

PAT

Rs crore

1

11.5

2.7

PAT margin

%

0.6

8.1

2.5

Adjusted debt/adjusted networth

Times

0.1

0.9

1.0

Interest coverage

Times

1.8

4.2

2.1

Any other information: Not applicable

Note on complexity levels of the rated instrument:
Crisil Ratings` complexity levels are assigned to various types of financial instruments and are included (where applicable) in the 'Annexure - Details of Instrument' in this Rating Rationale.

Crisil Ratings will disclose complexity level for all securities - including those that are yet to be placed - based on available information. The complexity level for instruments may be updated, where required, in the rating rationale published subsequent to the issuance of the instrument when details on such features are available.

For more details on the Crisil Ratings` complexity levels please visit www.crisilratings.com. Users may also call the Customer Service Helpdesk with queries on specific instruments.

Annexure - Details of Instrument(s)

ISIN Name Of Instrument Date Of Allotment Coupon Rate (%) Maturity Date Issue Size (Rs. Crore) Complexity Levels Rating Outstanding with Outlook
NA Cash Credit NA NA NA 20.00 NA Crisil BBB/Negative
NA Letter of Credit NA NA NA 43.00 NA Crisil A3+
NA Overdraft Facility NA NA NA 7.00 NA Crisil A3+
NA Proposed Working Capital Facility NA NA NA 3.00 NA Crisil BBB/Negative
NA Working Capital Facility NA NA NA 20.00 NA Crisil BBB/Negative
NA Term Loan NA NA 30-Apr-27 2.00 NA Crisil BBB/Negative

Annexure – List of entities consolidated

Names of Entities Consolidated

Extent of Consolidation

Rationale for Consolidation

Aelea Commodities Limited

Full

Parent company

Supreme Commodities DMCC

Full

Subsidiary company
Annexure - Rating History for last 3 Years
  Current 2025 (History) 2024  2023  2022  Start of 2022
Instrument Type Outstanding Amount Rating Date Rating Date Rating Date Rating Date Rating Rating
Fund Based Facilities LT/ST 52.0 Crisil BBB/Negative / Crisil A3+ 08-01-25 Crisil BBB/Stable / Crisil A3+   --   --   -- --
Non-Fund Based Facilities ST 43.0 Crisil A3+ 08-01-25 Crisil A3+   --   --   -- --
All amounts are in Rs.Cr.
Annexure - Details of Bank Lenders & Facilities
Facility Amount (Rs.Crore) Name of Lender Rating
Cash Credit 20 The Hongkong and Shanghai Banking Corporation Limited Crisil BBB/Negative
Letter of Credit 16 DBS Bank Limited Crisil A3+
Letter of Credit 27 Axis Bank Limited Crisil A3+
Overdraft Facility 3 Axis Bank Limited Crisil A3+
Overdraft Facility 4 DBS Bank Limited Crisil A3+
Proposed Working Capital Facility 3 Not Applicable Crisil BBB/Negative
Term Loan 2 State Bank of India Crisil BBB/Negative
Working Capital Facility 20 HDFC Bank Limited Crisil BBB/Negative
Criteria Details
Links to related criteria
Basics of Ratings (including default recognition, assessing information adequacy)
Criteria for consolidation

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