| Ludlow Jute and Specialities Limited | ||||||
| Ratings reaffirmed at 'Crisil A- / Stable / Crisil A2+ '; Rated amount enhanced for Bank Debt | ||||||
| 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 A2+’ ratings to the bank facilities of Ludlow Jute and Specialities Limited (LJSL). The ratings reflect the extensive experience of the promoters in the jute industry along with the group’s established market position and comfortable capital structure. These strengths are partially offset by exposure to risks related to the regulated nature of the jute industry and large working capital requirement. |
Analytical Approach Crisil Ratings has combined the business and financial risk profiles of LJSL, Bally Fabs International Ltd (BFIL), Ambica Jute Mills Ltd (AJML), Bally Jute Co Ltd (BJCL) and Kelvin Jute Ltd (KJL). This is because all these entities, collectively referred to as the Kankaria group, operate in the same industry and have 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 Extensive experience of the promoters LJSL was acquired by the Kolkata-based Kankaria group, effective September 30, 2024. The promoters have over four decades of experience in the jute industry, enabling them to understand the market dynamics and build strong relationships with key customers and suppliers. Further, the group has a strong record of acquiring underperforming jute mills and turning around operations to make them profitable, as is the case with AJML, BJCL and KJL. Similarly, LJSL was facing operational inefficiencies prior to the acquisition. However, operations quickly turned around post-acquisition with LJSL’s operating margin exceeding 9.3% in every quarter since the March 2025 quarter, starkly contrasting with previous performance of negative to low profit margin. As such, the group’s operating profitability was healthy at over 8.5% in fiscal 2025 and it is estimated to be over 7.1% in fiscal 2026 as well. The decline in margin is attributable to a steep increase in raw jute prices September 2025 onwards and a pause in the pass through of the same in the final jute sacking prices in October and November 2025. However, the pass through has been rectified December 2025 onwards and operating profitability is expected to sustain at a healthy level over the medium term.
Strong market position The Kankaria group enjoys a strong market position in the jute industry with one of the highest allocations of monthly jute production control-cum-supply order (PCSO) procurement by the Office of The Jute Commissioner- of over 9.6% as of November 2025, which should ensure baseline revenue over the medium term. Consolidated revenue was over Rs 1,090 crore in fiscal 2025 (consolidating second half performance of LJSL), while that for fiscal 2026 is estimated at around Rs 1890 crore, reflecting revival in the jute industry’s demand scenario, with higher public procurement, improved sacking realisations and stabilisation of operations in LJSL. Sustained demand scenario, upward trending jute sacking realisations and stabilisation of operations in LJSL should result in sustenance of moderate revenue growth over the medium term.
Comfortable capital structure The group’s networth was over Rs 610 crore as on March 31, 2025, with gearing at 0.80 time and total outside liabilities to tangible networth ratio at 1.02 times. The capital structure is expected to remain comfortable over the medium term, led by healthy accretion to reserve and relatively stable debt levels. Debt protection metrics are expected to be healthy over the medium term with revival in LJSL’s profitability, as reflected in interest coverage ratio estimated at over 2.9 times for the first half of fiscal 2026 and sustenance of the same will remain a key rating monitorable. |
Key Rating Drivers - Weaknesses Exposure to risks related to the regulated nature of the jute industry Pricing and trading of jute in the domestic market is highly regulated by the government. The Cabinet Committee on Economic Affairs announces the minimum support price (different for each state) for raw jute to prop up jute prices and ensure security for farmers. Also, the Jute Packaging Material (compulsory use in packaging commodities) Act, 1987, makes it mandatory to use 100% jute bags for packaging food grains for consignments of 10-100 kilogramme (kg), and 20% of jute bags for packaging sugar for a consignment of 25-100 kg. This regulation is the key growth driver for the jute industry. Consumer packs of 25 kg and below for sugar, 10 kg and below for food grains, and packaging for export of commodities are exempted from this Act. The regulated nature of the industry exposes the group to policy changes and industry risk.
Large working capital requirement Operations are working capital intensive, reflected in gross current assets of 140-200 days over the three fiscals ended March 31, 2025, corresponding to inventory and receivables of 100-150 days and 30 days, respectively. While inventory levels are expected to reduce over the medium term due to revival in demand, intensity of working capital cycle is expected to sustain due to the inventory-based nature of business. |
Liquidity Adequate Bank limit utilisation was at 87.10% for 12 months through March 2026. Cash accrual is expected at over Rs 80 crore per annum, against yearly debt obligation of Rs 40 crore over the medium term; the surplus cash will act as cushion to liquidity. Unsecured loan of Rs 40 crore from the promoter group is expected to remain in the business and has been treated as 75% equity and 25% debt, while further unsecured loan of Rs 18.80 crore has been treated as debt and should augment the liquidity. Further, need-based promoter funding is available in case of contingencies. Cash and cash equivalents of over Rs 13.7 crore as on December 31, 2025, should support liquidity of the group.
Current ratio stood at 1.36 times on March 31, 2025. |
Outlook Stable The Kankaria group will continue to benefit from the extensive experience of the promoters and its strong market position. |
Rating sensitivity factors Upward factors
Downward factors
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About the Group LJSL, incorporated in December 1979, manufactures jute and its value-added products such as the blending of jute with other natural/manmade fibers. Its facility is located at P.O. Chengail Howrah, West Bengal. LJSL is listed at BSE Ltd. Mr Ashish Chandrakant Agrawal is the managing director.
LJSL is a part of the Kankaria group (with effect from September 30, 2024), founded by Mr Harakh Chand Kankaria in 1941 and presently managed by the promoter, Mr Awanti Kankaria, assisted by the third generation of the family, Mr Yogesh Kankaria, Mr Abhishek Kankaria and Mr Ashish Kankaria.
The Kankaria group operates below jute mills:
AJML was acquired by the group through auction proceedings in 1989. Previously it was a part of the Bagaria group. AJML manufactures jute sacks and its facility of 46,000 metric tonne per annum (MTPA) capacity is located in Belur, Howrah.
BJCL was purchased by the group from the Birla group in 1996. It also manufactures jute sacks and its facility of 46,914 MTPA capacity is located in Bally, Howrah.
Kolkata-based KJL was incorporated in 1995 and was taken over by the group in July 2017. It manufactures jute products and its facility of 25,000 MTPA capacity is located in Titagarh (North 24 Parganas district of West Bengal).
BFIL has three manufacturing units--first in Belur, Howrah (2007), second in Gangarampur, Joka (2018) and third, in Barasat in Regent Textile Park (2021), manufacturing diversified jute products. BFIL was set up under the Kankaria group management in 2007 to cater to exports. |
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)
& - Fully interchangeable with Cash Credit sublimit of Rs 31 crore |
Annexure – List of entities consolidated
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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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Annexure: List of instruments and names of regulators of the instruments As required by SEBI CRA Circular dated Feb 10, 2026, a list of activities or instruments falling under the purview of various FSRs, along with the names of respective FSRs, is being disclosed below:
* Includes securitisation transactions involving assignee payout, acquirer's payout. ~ The rated instrument may involve issuance of different instruments such as debt securities (listed or otherwise), bank loans, commercial paper (listed or otherwise), etc. The regulator of the instrument may accordingly be SEBI, RBI or MCA and can only be determined upon issuance. In PRs subsequent to issuance(s), Crisil Ratings Limited shall separately capture the rated quantum details along with names of respective regulators. ^ Includes bank facilities such as liquidity facility, second loss facility that are part of securitisation transactions. # There is no instrument being rated and hence, Regulator of the Instrument is not applicable. The rating scale and definitions are being followed as stipulated in SEBI Master Circular for CRAs. @ These ratings were assigned during regulatory regime prior to introduction of SEBI CRA Circular dated Feb 10, 2026 and the investor side regulators have accordingly been included.
Note: Kindly note that for activities or instruments falling under the purview of FSRs other than SEBI, the grievance/dispute redressal mechanisms and investor protection mechanisms provided by SEBI shall not be available. |
Criteria Details
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