Rating Rationale

Key Rating Drivers & Detailed Description

Strengths:

Extensive experience of the promoters, large portfolio of bulk and specialty chemicals: The three-decade-long experience of the promoters, their strong understanding of market dynamics and established relationships with customers and suppliers will continue to support the business. Mr. Bimal Goculdas, CEO & Managing Director from Promoter Group, is involved in daily operations. The company has built a large portfolio over a period and presently has nearly 4 key products offering in the bulk chemical segment and 8 key products offering in the specialty chemical segment. During 9MFY25, revenue grew by 26% to Rs 306 crore against Rs 243 crore during 9MFY24. The company estimated to achieve revenue of Rs.400-410 Crores in FY 25.

Adequate financial risk profile: Networth was healthy at Rs 192 crore as on September 30, 2025. Gearing stood at 0.28 times as on September 30, 2025, which was reduced from 0.35 times as of September 30, 2024. Debt protection metrics were healthy, as reflected in interest coverage and net cash accrual to total debt ratios of 4.27 times and 0.26 times, respectively, in H1FY25. Financial risk profile is expected to remain healthy over the medium term. Improvement in debt protection metrics was driven by better operating margin during the period with limited reliance on external debt.

Weaknesses:

Vulnerability to risks inherent in the commodity chemicals and raw material prices: Profitability is susceptible to price fluctuations in raw material as well as end products. Major raw materials are sulfur, benzene, ethanol, and boron, etc. and raw material cost account for about 60-65% of total sales. Any adverse fluctuation in raw material prices can impact profitability. Further, in bulk chemicals competition is high and the ability to pass on price fluctuations is limited. This is reflected in the volatile operating margin of 8.8-17.72 (8.8% in fiscal 2023) over the four years through fiscal 2024. During 9MFY25, the Company achieved EBIDTA of 13.69% due to higher realization from Boron products. Going forward company expected to have operating profitability in the range of 13% to 14% over medium term. Overall movement in operating margin will be key monitorable.

Exposure to regulatory risks: Company is into manufacturing chemicals from sulfur and ethanol chemistry; due to its hazardous nature, it is exposed to regulatory risks.