| Ganges Jute Private Limited | ||||||
| Ratings reaffirmed at 'Crisil A / Stable / Crisil A1 ' | ||||||
| Rating Action | ||||||
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| 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 reaffirmed its ‘Crisil A/Stable/Crisil A1’ ratings on the bank facilities of Ganges Jute Private Limited (GJPL).
The ratings continue to reflect the diversified product portfolio, wide geographical footprint and healthy financial risk profile. These strengths are partially offset by exposure to regulatory risks and easy access to cheaper substitutes. |
Analytical Approach Crisil Ratings has considered the standalone business and financial risk profile of GJPL to arrive at the ratings. |
Key Rating Drivers - Strengths Diversified product portfolio and wide geographical footprint: Jute and jute products contribute around 80% to the revenue while high density polyethylene/polypropylene (PP) bags contribute the remaining. Around 60% of the jute products manufactured are exported. This mitigates risks associated with product or geographical concentration in revenue, as reflected in turnover of about Rs 810.39 crore in fiscal 2025. However, revenue declined ~11% on-year due to muted demand in the jute sector, particularly exports.
Healthy financial risk profile: Networth remained at ~Rs 347.80 crore as on March 31, 2025, and led to strong gearing and total outside liabilities to tangible networth ratio of 0.35 times and 0.91 times, respectively. Capital expenditure (capex) of around Rs. 20-30 Crs was undertaken for new unit set up in Uluberia for OPVC pipes and new machinery for the Jute Mill which has been funded by external funds along with internal accruals. However, funding support to the group in the form of loans and advances with a portion being interest-bearing aggregating to around Rs 130.58 crore as on March 31, 2025, remains a key monitorable. Furthermore, steady profitability led to robust debt protection metrics, with interest coverage and net cash accrual to adjusted debt ratios of 2.89 times and 0.39 times, respectively, for fiscal 20256 (5.35 times and 0.32 times, respectively, previous fiscal). In the absence of any large, debt-funded capex, and fewer advances to the group, financial risk profile should sustain over the medium term. |
Key Rating Drivers - Weaknesses Exposure to regulatory risks, and easy access to cheaper substitutes: The domestic jute industry is highly regulated, especially in key areas such as pricing and sales. The minimum support price for raw jute, announced by the Cabinet Committee on Economic Affairs to prop up jute prices and ensure security for farmers, varies from state to state and with jute variety, thereby affecting the end-price of jute products. Also, under the aegis of the Jute Packaging Material (compulsory use in packaging commodities) Act (JPMA), 1987, the government has made it mandatory to use jute bags for packaging of sugar and food grains for consignments of 26-100 kilogrammes (kg). This regulation has been a key growth driver for the industry. The act, however, exempts consumer packs of 25 kg and below and packaging of food grains and sugar for export. Also, conditions of the act are diluted as substitutes such as plastic bags are available at 30-50% lower prices. Besides, the government occasionally permits reuse of jute sacks for storage of food grains, which affects sales. Additionally, the government is the largest consumer of jute sacks in the domestic market, accounting for nearly 60% of demand. |
Liquidity Strong Healthy bank limit utilisation marked below 50 percent for the past twelve months ended Jan 2026. Cash accruals are expected to be over Rs. 47 crore which are sufficient against term debt obligation of up to Rs.6 over the medium term. In addition, it will be act as cushion to the liquidity of the company. Current ratios are healthy at 1.20 times on March 31, 2025. Moderate cash and bank balance of around Rs 0.40 crore as on March 31, 2025. Low gearing and moderate net worth support it’s financial flexibility and provides the financial cushion available in case of any adverse conditions or downturn in the business. |
Outlook Stable The company is likely to continue to benefit from the experience of its promoter, diversified product profile, and a healthy financial risk profile over the medium term. |
Rating sensitivity factors Upward factors
Downward factors
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About the Company Set up in March 2002 by Mr Abhishek Poddar, GJPL is based in Hooghly, West Bengal, and commenced production in April 2005. It manufactures, processes, and trades in jute and PP bags. Unit has a spinning capacity of 8,392 spindles as well as a lamination plant. The promoter has over three decades of experience in the jute business. |
Key Financial Indicators
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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 - Rating History for last 3 Years | ||||||||||||||||||||||||||||||||||||||||||||||||||||
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| All amounts are in Rs.Cr. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Annexure - Details of Bank Lenders & Facilities | ||||||||||||||||||||||||||||||||||||||||||||
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Criteria Details
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