| Mangalam Organics Limited | ||||||
| Ratings continues on 'Watch Developing' | ||||||
| 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 continued its ratings on the bank facilities of Mangalam Organics Ltd (MOL) on ‘Rating Watch with Developing Implications’.
Crisil Ratings had placed the ratings on ‘Watch Developing’, following a fire incident at one of the divisions of a camphor plant at Kumbhivali village in Maharashtra on July 23, 2025.
The fire incident may have implications on the company's business and financial risk profiles. The immediate shutdown of the camphor division in 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 (capex) 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 monitorable.
Crisil Ratings will continue to be in discussion with MOL management and will be taking appropriate rating action with the emergence of clarity of the impact on the business and financial risk profiles of the company as well as timelines for settlement of the entire insurance claim.
The ratings continue to reflect the diversifying product portfolio and above-average financial risk profile. These strengths are partially offset by susceptibility to raw material prices and large working capital requirement. |
Analytical approach Crisil Ratings has consolidated the business and financial risk profiles of MOL and its three subsidiaries, which are strategically important to and have significant degree of operational integration with MOL. These companies are Mangalam Brands Pvt Ltd (formerly Campure Pvt Ltd [CPL]), Mangalam Pooja Stores Pvt Ltd (MPSPL) and Mangalam Speciality Chemicals Pvt Ltd (MSCPL).
Please refer Annexure - List of Entities Consolidated, which captures the list of entities considered and their analytical treatment of consolidation. |
Key rating drivers - Strengths Diversified product portfolio MOL’s retail segment, which primarily includes fast-moving consumer goods under CamPure and Mangalam brands, has been growing and accounted for 38% of revenue in fiscal 2025 compared with 16% in fiscal 2023. While camphor manufacturing remains the key product of the company, it has been focusing on further expanding the retail segment, which is margin remunerative. During the first quarter of fiscal 2026, the group achieved sales of Rs 146.55 crore with earnings before interest, taxes, depreciation and amortization (EBITDA) margin of 14.75%.
Above-average financial risk profile: Networth, sizeable at Rs 293 crore as on March 31, 2025, supported the financial flexibility of the group. Backed by robust networth, the capital structure was moderate with total outside liabilities to adjusted networth ratio of 1.13 times as on March 31, 2025. |
Key rating drivers - Weaknesses Susceptibility to raw material and camphor prices The operating margin is susceptible to fluctuation in raw material 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. The operating margin has been at 0.49-11.11% for the three fiscals through 2025.
Large working capital requirement MOL’s operations were working capital intensive as reflected in gross current assets at 226 days as on March 31, 2025, with receivables and inventory of 47 days and 167 days, respectively. Inventory is generally high during the fiscal end as the company builds inventory for the peak season of July to December. Currently, the working capital requirement has increased, further leading to high dependence on debt, hence, the working capital management will be a key rating sensitivity factor. |
Liquidity Adequate Bank limit utilisation was low around 61% on average for the 12 months ended March 31, 2025. Annual cash accrual is expected above Rs 40 crore against yearly term debt obligation of Rs 15-16 crore over the medium term and will cushion liquidity. The current ratio was moderate at 1.11 times as on March 31, 2025. |
Rating sensitivity factors Upward factors:
Downward factors:
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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 include homecare and personal care products under the CamPure and Mangalam brands. Operations are managed by Kamal Kumar Dujodwala and Pannkaj Dujodwala. MOL is listed on the Bombay Stock Exchange as well as National Stock Exchange. |
Key financial indicators (Consolidated)
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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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| All amounts are in Rs.Cr. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Annexure - Details of Bank Lenders & Facilities | ||||||||||||||||||||||||||||||||||||
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Criteria Details
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