Due to inadequate information, Crisil Ratings, in line with SEBI guidelines, had migrated the ratings of Dayal Industries Pvt Ltd (DIPL; part of Dayal Group) to 'Crisil BB+/Stable Issuer Not Cooperating'. However, the management has subsequently shared requisite information necessary for carrying out comprehensive review of the rating. Consequently, Crisil Ratings is migrating the rating on bank facilities of DIPL to ‘Crisil BBB/Stable’ from 'Crisil BB+/Stable Issuer Not Cooperating'.
Group is expected to clock Rs. 680-690 crores for full fiscal 2026; it has achieved around Rs. 455 crores during 9MFY2026. Group reported revenue of around Rs. 608.3 crores in fiscal 2025 registering a growth of 17% as against Rs. 519.3 crores in fiscal 2024 supported by volumetric growth. Operating margins moderated slightly in fiscal 2025 to 7.2% from 7.8% in fiscal 2024 on account of dip in realizations for seeds and cattle feed, and higher selling expenses as group had expanded the team of sales personnel to 150+ employees in FY2025. Margins are expected to remain at 7.5-7.6% over the medium term. Sustenance of operating margins over the medium term shall be a key monitorable.
The ratings reflect the extensive experience of the promoters in the fertilizer, seed and cattle feed industries, the large product portfolio of the group, its diversified geographical reach and strong marketing network. The ratings also factor in a healthy financial risk profile. These strengths are partially offset by large working capital requirement and susceptibility to volatility in raw material prices amid intense competition |
Analytical Approach Crisil Ratings has combined the business and financial risk profiles of Dayal Fertilizers Pvt Ltd (DFPL), DIPL and Dayal Seeds Pvt Ltd (DSPL). The companies, collectively referred to as the Dayal group, have significant financial linkages, are under the same management and have common distribution network and brand.
Unsecured loan of Rs 56.53 crore, as on March 31, 2025, from the promoters has been treated as 75% equity and 25% debt as the loan will be retained in the business over the medium term.
Please refer Annexure - List of Entities Consolidated, which captures the list of entities considered and their analytical treatment of consolidation. |
Key Rating Drivers - Strengths Established market position and extensive experience of the promoters: The Dayal group is a leader in the micronutrients, fertilizers, seeds(agri inputs), cattle feed segment with strong market share in North India (primarily Uttar Pradesh) and established brand. Products are sold under a common brand (Dayal) and the group owns agri-malls (Dayal Krishi Bazar) and retail outlets (Dayal Bandhu Kendra), which enhance marketability. The promoters’ experience of over three decades in the fertilizers, seeds and cattle feed industries. Strong understanding of local market dynamics and healthy relationships with customers and suppliers will continue to support the business risk profile. Company is expected to clock Rs. 680-690 crores for full fiscal 2026; it has achieved around Rs. 455 crores during 9MFY2026. Company reported revenue of around Rs. 608.3 crores in fiscal 2025 registering a growth of 17% as against Rs. 519.3 crores in fiscal 2024 supported by volumetric growth.
Diversified clientele and product portfolio: The group supplies to 22 states (including Uttar Pradesh, Bihar, Rajasthan, Maharashtra and Punjab) through 1,400 distributors and 25,000 dealers. It manufactures a wide range of products — from micronutrients to biofertilizers and water-soluble fertilizers as well as cattle and poultry feed and seeds of food crops — which are sold under a common brand, Dayal. The strong diversity in clientele and product profile helps maintain steady growth in revenue and profitability despite the occasional decline in demand.
Healthy financial risk profile: The financial risk profile is expected to remain healthy over the medium term. Networth is expected to improve to around Rs. 220 crores as on March 31, 2026 as against Rs. 188 crores as on March 31,2025 (Rs. 163.4 crores in the proceeding fiscal). Gearing and total outside liabilities to adjusted networth (TOLANW) are expected to be around 0.2 time and around 0.9 time for the fiscal ending March 31, 2026 (gearing and TOLANW were 0.09 time and 0.92 times, respectively, as on March 31, 2025) owing to minimal reliance on debt. Debt protection metrics remained adequate as reflected in interest coverage and net cash accrual to adjusted debt ratios of around 6 times and around 1 time in fiscal 2026 (6.8 times and around 2 times, respectively, for fiscal 2025).
Group is expected to undertake a capex of around Rs. 3-4 crores which is expected to be operationalized in the next fiscal. This capex is expected to be funded through mix of debt (~75%) and internal accruals (~25%). However, despite the expected debt funded capex, capital structure is expected to remain healthy over the medium term. |
Key Rating Drivers - Weaknesses Moderately high working capital requirement: Operations of the group are working capital intensive as reflected in Gross current assets (GCAs; net of cash) of around 142 days as on March 31, 2025, and are expected to be over 130 days as on March 31, 2026, driven by inventory and receivables of 90-100 days and 35-40 days, respectively. The group must maintain large inventory given the seasonality and irregularity in demand, vagaries of the monsoon and large product portfolio. The working capital requirement is partly met through advances from customers, credit of 20-30 days from suppliers and internal accruals. Operations will remain working capital intensive, over the medium term, considering healthy growth prospects with expected GCAs (net of cash) of 130-140 days over the medium term. Susceptibility to volatility in raw material prices amid intense competition: The fertilizer and seed industries depend on the level of rainfall and farm income. The Dayal group faces intense competition from small, unorganised players, as well as strong players in markets where it plans to expand its reach. The operating margin is susceptible to fluctuations in the prices of key raw materials. Furthermore, the ability to pass on any increase in raw material prices to customers is limited on account of intense competition. With bulk of the revenue coming from the domestic agricultural inputs business, the group will remain susceptible to the vagaries of monsoon and farm income in India. |
Liquidity Adequate Bank limits remain sparingly utilized at around 13.1% during past 12 months ended December-2025. Net cash accruals are expected to be around Rs. 34-38 crores annually and will remain more than adequate against yearly term debt repayment obligation of around Rs. 1.1 crores over the medium term. In addition, it will support the liquidity of the company. The current ratio is moderate at 2.1 times as on March 31, 2025 and expected to be around 2.3 times as on March 31, 2026. Low gearing and healthy networth support financial flexibility and will provide cushion against adverse conditions or downturn in the business. |
Outlook Stable Crisil Ratings believes that Dayal group will continue to benefit from the extensive experience of the promoters and its strong brand. |
Rating sensitivity factors Upward factors:
Downward factors:
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About the Group DFPL, incorporated in 1979, manufactures micronutrients, secondary nutrients and water-soluble fertilizers.
Incorporated in 2000, DIPL manufactures animal feed and supplements.
DSPL was incorporated in 2005 and manufactures seeds of food crops, oil seeds and fodders. The operations are being managed by the promoter family with Mr. Abhay Kumar and Mr. Aman Kumar managing the operations |
Key Financial Indicators Consolidated
DFPL
DSPL
DIPL
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Any other information: Not applicable |
Note on complexity levels of the rated instrument: |
Annexure - Details of Instrument(s)
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Annexure – List of entities consolidated
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| Annexure - Rating History for last 3 Years | |||||||||||||||||||||||||||||||||||||||
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* - Issuer did not cooperate; based on best-available information
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| Annexure - Details of Bank Lenders & Facilities | ||||||||||||
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Criteria Details
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