| Kisan Mouldings Limited | ||||
| Rating Reaffirmed and Withdrawn | ||||
| 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Crisil Ratings has reaffirmed its rating on the long-term bank facilities of Kisan Mouldings Ltd (KML) and subsequently withdrawn the rating following a request from the company and on receipt of no objection certificates from lenders for the same. The withdrawal is in line with the withdrawal policy of Crisil Ratings.
The business risk profile of the company has improved, following the acquisition by Apollo Pipes Ltd (APL) in fiscal 2024, which currently holds a 58.66% stake. In fiscal 2025, KML's revenue grew 2% to Rs 274 crore, despite a slowdown in the end-user industry due to the general elections in the first half of fiscal 2025 and limited spending on real estate and government water infrastructure projects. KML reported positive earnings before interest taxes depreciation and amortisation margin of 3.9% during its first five years because of better fixed cost absorption due to improvements in supply chain and better logistics management. Profitability is expected to improve in medium term with focus on improving the operating leverage with increase in capacity utilizations.
The rating also factors in the vintage of the company in the pipe and fittings industry along with wide product range, which includes unplasticised polyvinyl chloride (PVC) and chlorinated PVC plumbing pipes and fittings, drainage and irrigation pipes.
In fiscal 2025, the capital structure has become comfortable with negligible debt and networth of Rs 157 crore. The financial risk profile is also stable, with gearing of 0.2 time and total outside liabilities to tangible networth ratio of 0.04 time as on March 31, 2025. Additionally, debt protection metrics have improved, with adjusted interest coverage ratio of 6.2 times and net cash accrual to total debt ratio of 0.3 time. These metrics are expected to remain comfortable over the medium term, driven by improving operating efficiency and lower debt levels, indicating strong financial position.
The rating further considers the support provided by the parent, increasing the financial flexibility. APL has provided a shortfall undertaking for the debt facilities of KML and is likely to provide financial support in case of exigencies.
These strengths are partially offset by susceptibility of profitability to fluctuations in raw material prices and exposure to intense competition. |
Analytical approach Crisil Ratings has applied its parent notch-up framework and factored in the operational, managerial and need-based financial support expected from the parent, APL.
Also, Crisil Ratings has combined the business and financial risk profiles of KML and its wholly owned subsidiary, KML Tradelinks Pvt Ltd, on account of their operational and financial linkages.
Please refer Annexure - List of Entities Consolidated, which captures the list of entities considered and their analytical treatment of consolidation. |
Key Rating Drivers - Strengths Strong support from, and established market position of, the parent APL has an established market position, with presence of around two decades in the PVC pipes industry. The parent has over 900 dealers and distributors across India. It has expertise in column pipes, unplasticised PVC and chlorinated PVC plumbing pipes and fittings, domestic and sewage pipes and water tanks. Launch of new products (oriented PVC, PVC windows and door frames and bathroom fittings) will strengthen its product portfolio.
KML is critical to APL as it is in the same business and has operational synergies with the latter. Moreover, the parent has provided a shortfall undertaking for the debt facilities of KML and will bear any scheduled and unforeseen expenditure. KML will continue to benefit from the healthy business prospects of APL over the medium term.
Vintage of KML in the pipe industry The promoters have experience of over four decades in the pipe and pipe fittings industry, which has been instrumental in driving the company’s longstanding presence in west India. Their expertise has helped the company establish a solid manufacturing base, with facilities spread across Madhya Pradesh, Maharashtra and Dadra & Nagar Haveli with total capacity of 60,000 tonne.
Key Rating Drivers - Weaknesses Susceptibility of profitability to fluctuations in raw material prices The operating margin remains susceptible to fluctuations in raw material prices. The price of resin is volatile and susceptible to changes in global prices and regional demand-supply dynamics. The company is also susceptible to cyclicality in the PVC industry.
Exposure to intense competition The company is under intense competitive pressure because of low product differentiation and high price sensitivity. Intense competition constrains scalability, pricing power and profitability. |
Liquidity Adequate Liquidity will remain healthy, supported by the shortfall undertaking from APL, which is likely to provide financial support in case of an exigency. At standalone level, liquidity remains moderate with the company having liquid surplus of Rs 9 crore as on March 31, 2025. The company is expected to generate net cash accrual of Rs 15-20 crore, which will be sufficient to fund regular maintenance capital expenditure (capex) of ~Rs 10 crore per annum in the absence of debt obligation over the medium term. Working capital limit of Rs 50 crore had an average utilisation of 60% as on March 31, 2025. |
Outlook Positive The outlook on KML is based on the positive outlook on the parent. The rating will remain sensitive to any change in Crisil Ratings’ rating on APL. Crisil Ratings believes KML will benefit from the operational and technical support from APL while improving its business performance over the medium term. |
Rating sensitivity factors Upward factors
Downward factors
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About the company Incorporated in 1989 as a private-limited company named Sanwaria Synthetics Pvt Ltd, KML was reconstituted as a public-limited company under the current name in 1993. It manufactures moulded and plastic pipes and fittings, irrigation systems, moulded furniture, solvent cement and rubber lubricants. It has manufacturing facilities in Silvassa, Dadra and Nagar Haveli, Tarapur, Maharashtra, Baddi, Himachal Pradesh, Dewas, Madhya Pradesh, Raipur, Chhattisgarh, and Tumkur, Karanataka. The company is listed on the Bombay Stock Exchange. |
About the group APL was incorporated in 2000 as Apollo Poly Pipes Pvt Ltd by Mr Sameer Gupta and Mr Vinay Gupta. The company was reconstituted as a public-limited company with the current name in April 2009. APL manufactures pressure pipes (PVC, ring-fit and self-fit pipes), column pipes, casing pipes, plumbing pipes, soil-waste-rainwater pipes, fittings and water tanks. It is a part of the Sudesh group. Through a reverse merger with its holding company in November 2017, APL got listed on the Bombay Stock Exchange and the National Stock Exchange. |
Key financials
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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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