Rating Rationale
July 23, 2025 | Mumbai
Mangalam Organics Limited
Ratings placed on 'Watch Developing'
 
Rating Action
Total Bank Loan Facilities RatedRs.397 Crore
Long Term RatingCrisil BBB+/Watch Developing (Placed on 'Rating Watch with Developing Implications')
Short Term RatingCrisil A2/Watch Developing (Placed on 'Rating Watch with Developing Implications')
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 placed its ratings on bank facilities of Mangalam Organics Limited (MOL) on ‘Rating Watch with Developing Implications’.

 

Crisil Ratings has placed the ratings on ‘Watch Developing’ following a fire incident at one of the divisions of Camphor plant located at Kumbhivali Village on July 17th, 2025.

 

Fire incidence may have implications on the company's business and financial risk profile. The immediate shutdown of the camphor division in 1 of the plant has disrupted production, which may lead to potential revenue loss until normal operations resume. The extent of the damage to the plant and machinery will likely result in increased near-term capital expenditure for repairs and replacements, further increasing the financial burden.

 

Although there were no human casualties and the goods and plant and machinery were insured, the extent of financial loss and admittance and timely receipt of insurance claim will remain key monitorable.

 

Crisil Ratings will continue to be in discussion with the management and will be taking appropriate rating action with the emergence of clarity of the impact on the business and financial risk profile of the company as well as timelines for settlement of the entire insurance claim.

 

The rating continues to reflect the diversifying product portfolio and an Above average financial risk profile. These strengths are partially offset by susceptibility to volatility in raw material prices and large working capital requirement

Analytical Approach

For arriving at its ratings, Crisil Ratings has consolidated the business and financial risk profiles of MOL and its three subsidiaries which are strategically important to, and have a significant degree of operational integration with MOL. These companies are Mangalam Brands Private Limited (Formerly Campure Private Limited (CPL), Mangalam Pooja Stores Private Limited (MPSPL) and Mangalam Speciality Chemicals Private Limited.

 

Please refer Annexure - List of Entities Consolidated, which captures the list of entities considered and their analytical treatment of consolidation.

Key Rating Drivers & Detailed Description

Strengths:

  • Diversified Product portfolio: MOL’s retail segment which primarily include FMCG products under the brand names of ‘CamPure’ and ‘Mangalam’, has been growing. While camphor manufacturing remains the key product of the company, it has been focusing on further expanding the retail segment which is margin remunerative.

 

  • Above average financial risk profile: Networth, sizeable at Rs 293 crore as on March 31, 2025, supports the financial flexibility of the group. Backed by a robust networth, capital structure is moderate with total outside liabilities to adjusted networth (TOLANW) ratio of 1.13 time as on March 31, 2025.

 

Weaknesses:

  • Susceptibility to volatility in raw material and camphor prices: Operating margin is susceptible to fluctuations in raw materials prices and camphor prices. Alpha pine and gum turpentine, which account for 60-70% of total raw material, are largely imported from Indonesia, Brazil, Russia, and Europe, and their availability and prices are subject to demand and supply situation. Camphor prices are also volatile and impacts realisation and profitability. The business risk profile will continue to be susceptible to changes in input and camphor prices and will remain a major rating sensitivity factor. Operating margin has ranged between (0.49%) to 11.11% for last 3 years through fiscal 2025

 

  • Large working capital requirements: MOL’s operations are working capital intensive with gross current assets (GCAs) of 226 days as on March 31, 2025, with receivables and inventory of 47 days and 167 days, respectively. Inventory levels are generally high during the financial year end as the company builds inventory for the peak season of July to December. Currently the working capital requirements have increased further leading to higher dependence on debt, hence, working capital management will be a key rating sensitivity factor.

Liquidity: Adequate

Bank limit utilization is lower around 61% over the 12 months ended March 2025. Cash accruals are expected to be over Rs 35 crore, which is sufficient against term debt obligation of Rs 15-16 crore per annum over the medium term. In addition, it will act as a cushion to the liquidity of the group. The current ratio is moderate at 1.11 times on March 31, 2025

Rating sensitivity factors

Upward Factors:

  • Growth in revenue and improved profitability resulting in net cash accruals above Rs. 60 crores on a sustainable basis
  • Improved working capital cycle and financial risk profile

 

Downward factors:

  • Decline in revenue over the medium term or decline in operating margins leading to net cash accruals below Rs 25 Crores
  • Stretch in working capital cycle or higher-than-expected debt funded capex or Delay in receipt of insurance claim resulting deterioration in financial risk profile

About the Group

Incorporated in 1981, MOL (formerly, Allied Collides Pvt Ltd), is based in Mumbai, and manufactures and trades in fine specialty chemicals, including camphor, resins, and dipentene. The company also has retail operations which includes homecare and personal care products under the brand name of CamPure and Mangalam. Operations are managed by Mr. Kamal Kumar Dujodwala and Mr. Pannkaj Dujodwala MOL is listed on the Bombay Stock Exchange as well as National Stock Exchange

Key Financial Indicators (consolidated)

As on / for the period ended March 31

 

2025

2024

Operating income

Rs crore

530.34

494.16

Reported profit after tax

Rs crore

12.60

4.29

PAT margins

%

2.38

0.87

Adjusted Debt/Adjusted Net worth

Times

0.92

0.62

Interest coverage

Times

2.74

2.52

Any other information: Not Applicable

Note on complexity levels of the rated instrument:
Crisil Ratings` complexity levels are assigned to various types of financial instruments and are included (where applicable) in the 'Annexure - Details of Instrument' in this Rating Rationale.

Crisil Ratings will disclose complexity level for all securities - including those that are yet to be placed - based on available information. The complexity level for instruments may be updated, where required, in the rating rationale published subsequent to the issuance of the instrument when details on such features are available.

For more details on the Crisil Ratings` complexity levels please visit www.crisilratings.com. Users may also call the Customer Service Helpdesk with queries on specific instruments.

Annexure - Details of Instrument(s)

ISIN Name Of Instrument Date Of Allotment Coupon Rate (%) Maturity Date Issue Size (Rs. Crore) Complexity Levels Rating Outstanding with Outlook
NA Cash Credit NA NA NA 147.00 NA Crisil BBB+/Watch Developing
NA Letter of Credit NA NA NA 205.00 NA Crisil A2/Watch Developing
NA Term Loan NA NA 31-Mar-26 45.00 NA Crisil BBB+/Watch Developing

Annexure – List of entities consolidated

Names of Entities Consolidated

Extent of Consolidation

Rationale for Consolidation

Mangalam Pooja Stores Private Limited

Full consolidation

Significant business and financial linkages and common management along with parent-wholly owned subsidiary relationship

Mangalam Brands Private Limited

Full consolidation

Significant business and financial linkages and common management along with parent-wholly owned subsidiary relationship

Mangalam Speciality Chemicals Private Limited

Full consolidation

Significant business and financial linkages and common management along with parent-wholly owned subsidiary relationship
Annexure - Rating History for last 3 Years
  Current 2025 (History) 2024  2023  2022  Start of 2022
Instrument Type Outstanding Amount Rating Date Rating Date Rating Date Rating Date Rating Rating
Fund Based Facilities LT 192.0 Crisil BBB+/Watch Developing   -- 27-05-24 Crisil BBB+/Positive 08-03-23 Crisil BBB+/Stable 30-07-22 Crisil A-/Stable Crisil A-/Positive
Non-Fund Based Facilities ST 205.0 Crisil A2/Watch Developing   -- 27-05-24 Crisil A2 08-03-23 Crisil A2 30-07-22 Crisil A2+ Crisil A2+
All amounts are in Rs.Cr.
Annexure - Details of Bank Lenders & Facilities
Facility Amount (Rs.Crore) Name of Lender Rating
Cash Credit 34 Axis Bank Limited Crisil BBB+/Watch Developing
Cash Credit 41 Axis Bank Limited Crisil BBB+/Watch Developing
Cash Credit 50 HDFC Bank Limited Crisil BBB+/Watch Developing
Cash Credit 22 The Saraswat Co-Operative Bank Limited Crisil BBB+/Watch Developing
Letter of Credit 55 The Saraswat Co-Operative Bank Limited Crisil A2/Watch Developing
Letter of Credit 100 HDFC Bank Limited Crisil A2/Watch Developing
Letter of Credit 50 Axis Bank Limited Crisil A2/Watch Developing
Term Loan 45 HDFC Bank Limited Crisil BBB+/Watch Developing
Criteria Details
Links to related criteria
Basics of Ratings (including default recognition, assessing information adequacy)
Criteria for consolidation
Criteria for manufacturing, trading and corporate services sector (including approach for financial ratios)

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