| Perfectpac Limited | ||||||
| Ratings reaffirmed at 'Crisil BBB-/Stable/Crisil A3' | ||||||
| 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 BBB-/Stable/Crisil A3’ ratings on the bank facilities of Perfectpac Limited (PPL).
The ratings continue to reflect the established position of the company in the corrugated box industry, its longstanding relationships with clients and a comfortable financial risk profile. These strengths are partially offset by modest scale of operations amid intense competition and susceptibility to cyclicality in the paper industry |
Analytical Approach Crisil Ratings has evaluated the standalone business and financial risk profiles of PPL. |
Key Rating Drivers & Detailed Description Strengths: Established market position and longstanding client relationships: Presence of nearly five decades in the corrugated box business has enabled the company to establish healthy relationships with customers. Key clients have been associated with PPL for more than two decades. The company is diversifying its customer mix with a focus on the fast-moving consumer goods (FMCG) industry, which has led to volume growth. Revenue increased at compound annual growth rate (CAGR) of 9-10% over the three fiscals through 2025, backed by volume growth of 7-8%, supporting the business risk profile.
Comfortable financial risk profile: Networth is expected to increase to Rs 40-42 crore as on March 31, 2026 (~Rs 38 crore as on March 31, 2025), backed by accretion to reserve. This, with no sizeable debt funded capital expenditure (capex), will keep gearing at 0.03-0.04 time as on March 31, 2026. Debt protection metrics will be comfortable, with interest coverage and net cash accrual to adjusted debt ratios expected above 4 times and 3.5-3.6 times, respectively, in fiscal 2026.
Weaknesses: Modest scale of operations amid intense competition: Despite increasing at CAGR of 9-10% over the three fiscals through 2025, operating income was modest at Rs 113 crore in fiscal 2025. With the increase in overall capacity along with addition of higher value added products, fetching better realization and profitability, revenue is expected to grow 12-13% in fiscal 2026. Though the management plans to add new products and expand clientele, growth in business and demand from new clients will remain monitorable. Steady orders, leading to significant improvement in the business risk profile, shall remain a key rating sensitivity factor.
Susceptibility to cyclicality in the paper industry: The paper industry is highly fragmented. Consequently, players have limited pricing flexibility and bargaining power. This is expected to continue over the medium-to-long term as consolidation is unlikely because of unviable capacities. The operating margin fluctuated between 4.4% and 6.1% over the three fiscals through 2025. The operating profitability of the company is expected to be moderated to 6% in fiscal 2025, owing to volatility in raw material prices. While the company can partly pass on an increase in input prices to clients, during times of a slowdown and in case of extreme volatility, profitability would remain susceptible to fluctuations in input costs as has been witnessed in the previous fiscal. Stable operating profitability, leading to high net cash accruals, supporting the overall business risk profile shall remain key monitorable. |
Liquidity: Adequate Bank limit of Rs 5.0 crore was utilised around 3% over the 13 months through December 2024. Net cash accrual, expected at Rs 6-7 crore per fiscal, will adequately cover yearly term debt obligation. Current ratio was healthy at 2.81 times as on March 31, 2025, and is expected at a similar level as on March 31, 2026. Low gearing and comfortable networth support financial flexibility, which will help to withstand adverse conditions or downturns in the business. |
Outlook: Stable Crisil Ratings believes PPL will continue to benefit, over the medium term, from its established relationships with customers. |
Rating sensitivity factors Upward factors
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About the Company Incorporated in 1973 as a private limited company and reconstituted as a public limited company in 1994, PPL is promoted by Mr Sanjay Rajgarhia. It manufactures corrugated boxes and boards at its facilities in Greater Noida, Uttar Pradesh. The company is listed on the Bombay Stock Exchange. |
Key Financial Indicators
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Status of non cooperation with previous CRA PPL had not cooperated Brickwork Ratings India Pvt Ltd (BRA) which classified it as non-cooperative vide release dated October 27, 2017. The reason provided was the non-furnishing of information for monitoring of ratings. |
Any other information: Not Applicable |
Note on complexity levels of the rated instrument: |
Annexure - Details of Instrument(s)
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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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