| Mahalaxmi Associates Private Limited | ||||||
| Ratings downgraded to 'Crisil BB+ / Stable / Crisil A4+ ' | ||||||
| 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 Rating has downgraded its ratings on the bank loan facilities of Mahalaxmi Associates Pvt Ltd (MAPL, part of Mahalaxmi Group) to ‘Crisil BB+/Stable/Crisil A4+' from ‘Crisil BBB-/Stable/Crisil A3’. The downgrade reflects lower than anticipated business risk profile with company achieving 20% lower revenue in FY25 as against Rs 1118 crore in FY24 on account of dip in volume and lower price realizations. Earnings before interest, tax, depreciation and amortisation (Ebitda) margin continues todecline to 2.36 times in fiscal 2025 from 3.96 times in fiscal 2023 and to 1.75% in H1-FY26. This led to dip in net cash accrual to Rs 6 crore in fiscal 2025. Financial risk profile remained average with leverage capital structure driven by TOL/TNW at 2.90 times in FY25 due to higher dependency on external borrowings and modest debt protection metrics, with interest coverage ratio at around 1.35 times in FY25. Operation remained working capital intensive with GCA over 200 days driven by higher debtors and inventory days over 40 days and 110 days in FY25. This led to stretched liquidity risk profile with highly utilized bank lines over 95% in the last six months ending in September 2025. Improvement in the liquidity risk profile with lower utilization of bank lines and sustenance of operating margin over 2% will remain key monitorable.
The ratings continue to reflect the extensive experience of the promoters in the coal trading business and the moderate capital structure of the group. These strengths are partially offset by its susceptibility to counterparty risk, volatility in coal prices and changes in regulatory policies, large working capital requirements and average financial risk profile. |
Analytical Approach Crisil Ratings has combined the business and financial risk profiles of Mahalaxmi Continental Ltd (MCL), MAPL and Mahalaxmi India Pvt Ltd (MIPL), based on the management’s revised stance. The three companies are under the same management and have common shareholding.
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: The three-decade-long experience of the key promoter, Mr Naveen Kumar Gupta, and his family members in the coal trading business, their strong understanding of the market dynamics and healthy relationships with customers and suppliers should continue to support the business risk profile. Steady and repeated orders from key clients like Steel Authority Of India, Dsp; Odisha Mining Corporation Limited, Smc Power Generation Ltd, Atibir Industries Company Ltd. etc will continue to support the scale of operation over the medium term.
Healthy scale of operation: Despite declining realisations, the group recorded topline of around Rs 875 crore in fiscal 2025, down from Rs 1,118 crore in fiscal 2024, backed by its established position market position in the coke and coal trading business in the eastern part of India. With improvement in market dynamics (price realization) and increased in demand, company has booked revenue of Rs 534 crore in H1-FY26, which expects 15% growth over the medium term |
Key Rating Drivers - Weaknesses Susceptibility to counterparty risk, volatility in coal prices and changes in regulatory policies: The clientele primarily comprises players from the steel and cement industries, where demand is cyclical, and includes small entities. The group may face challenges if receivables exceed the usance of letters of credit. Although the transaction size per customer is controlled, exposure to sizeable counterparty risk is likely to persist over the medium term. Furthermore, with coal being an important resource for industrial activity both directly and indirectly, and prices fixed by the government, the group remains susceptible to volatility in coal prices and any change in regulations. For instance, its earnings before interest, tax, depreciation and amortisation (Ebitda) margin fell to 2.36% in fiscal 2025 from 3.96% in fiscal 2023 and 1.75% in H1-FY26. Sustainability of the operating margin over 2% and ability to pass on fluctuations in coal prices will remain monitorable.
Working capital intensive operations: The operations of the company are working capital intensive as reflected in the gross current assets of 200 days as on March 31, 2025. This is mainly driven by debtors of 41 days and high inventory of 117 days as on March 31, 2025. While debtors remain moderte due to the 45-90 days credit period offered to customers in line with market dynamics, however inventory levels remained over 3-4 months due to the lower demand and nature of the business. Overall working capital operations are expected to remain large with GCA ranging 180 to 200 days over the medium term.
Average Financial Profile: Financial risk profile of the company is marked with modest networth of Rs 129.07 crore in FY25. Capital structure continues to be leveraged with total outside liability to adjusted net worth ratio (TOLANW) of 2.94 times as on March 31, 2025 (2.72 times as of March 2024) owing to high LC backed creditors. With no major debt funded capex in upcoming years, capital structure is expected to improve over the medium term. The debt protection measures remained muted with leaned profitability over 2% and with low interest coverage and net cash accruals to adjusted debt ratio at 1.58 times and 0.05 times respectively for fiscal 2025 (1.43 times and 0.06 times a year ago). Improvement in financial risk profile of the company with higher interest coverage ratio will remain key monitorable |
Liquidity Stretched Bank limit utilisation is high at around 93 percent for the past twelve months Sept 2025. Cash accruals are expected to be over Rs 6 crore which are sufficient against term debt obligation of Rs 0.70 – 1.61 crore over the medium term.
Current ratio is moderate at 1.35 times on March 31, 2025. The promoters are likely to extend support in the form of equity and unsecured loans to meet its working capital requirements and repayment obligations. |
Outlook Stable Crisil Ratings believes the Mahalaxmi group will continue to benefit from its established market position in the coal trading business and the extensive experience of its promoters |
Rating sensitivity factors Upward factors
Downward factors
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About the Group MCL, the flagship company of the Mahalaxmi group, is a coal trading company for north-east India for the non-core sector. It was started in 1985 as a sole proprietorship firm named M/s Mahalaxmi Coal Traders in Meerut (Uttar Pradesh), and was reconstituted as a limited company with the present name in 2002. The company trades in coal and coke, primarily in the north-east. Mr Naveen Kumar Gupta and Ms Swapna Singhal are the directors of the company.
MIPL was incorporated in 2000 and its registered office is at Jogighopa in Goalpara, Assam. Mr Naveen Kumar Gupta and Ms Sangeeta Mittal are the directors of the company. It is engaged in bulk trading and supply of coal and coke.
MAPL was incorporated in 1998 and its registered office is at Beltola in Guwahati, Assam. Mr. Naveen Kumar Gupta and Ms Sangeeta Mittal are the directors of the company. It is engaged in bulk trading and supply of coal and coke |
Key Financial Indicators
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Status of non cooperation with previous CRA: |
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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| All amounts are in Rs.Cr. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Annexure - Details of Bank Lenders & Facilities | ||||||||||||||||||||
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Criteria Details
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