| Rajshree Polypack Limited | ||||
| Rating reaffirmed at 'Crisil BBB+/Stable' | ||||
| 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’ rating on the bank loan facilities of Rajshree Polypack Ltd (RPPL).
The ratings continue to reflect the extensive experience of the promoters in the plastic packaging industry, diversified product profile catering to reputed clientele across multiple industries and the strong financial risk profile of RPPL. These strengths are partially offset by increasing yet average scale of operations amid intense competition and exposure to volatility in input cost. |
Analytical Approach CRISIL Ratings has treated the corporate guarantee extended for Olive Ecopak Private Limited of Rs. 118 crore as debt. |
Key Rating Drivers & Detailed Description Strengths: Extensive experience of the promoters and established customer base: The two-decade long experience of the promoters, their strong understanding of the local market dynamics and healthy relationships with suppliers and customers will continue to support the business. The clientele comprises reputed players, such as Nourishco Beverages Ltd, Huhtamaki PPL Ltd and Amcor Flexibles. The company has a diversified clientele, with the top 5 customers contributing around 30-40% of the revenue in fiscal 2025. This has resulted in an increase in revenue over the years to around Rs 320-330 crores in fiscal 2025 as compared with Rs 275 crore in fiscal 2024. The revenues are further expected to increase driven by healthy demand from customers, long-standing relationships with them and planned capacity additions.
Diversified product profile catering to multiple industries: RPPL has a diversified product profile that includes plastic rigid sheets, various types of packaging products and varied sizes of containers, cups made of 100% food grade materials. The products find application in various end-user industries, such as fast-moving consumer goods and food and beverages. Moreover, it has presence across India as well as the European market. The company has further planned to increase its exposure to the US as well as UK. Exports revenues have increased and contribute around 15-16% of the total sales in fiscal 2024 and 2025 (as compared to 5.5% in fiscal 2023), which is further expected to increase over the medium term. A diversified product profile, reputable clientele and wide geographical presence de-risk the business to a large extent.
Comfortable financial risk profile: Net worth was strong at around Rs 165-170 crore as on March 31, 2025 as compared to Rs 154 Crores as on March 31, 2024. The growth in networth is driven by steady accretion to reserves as well as equity infusion in fiscal 2024. Gearing was moderate at around 1.3-1.35 time (debt includes the corporate guarantee extended to Olive Ecopak Private Limited) as on March 31, 2025 (1.2 times as on March 31, 2024). Debt protection metrics were adequate, indicated by interest coverage and net cash accrual to adjusted debt ratios of around 4.8-4.9 times and 0.13-0.14 times in fiscal 2025. The financial risk profile is expected to remain stable despite debt-funded capital expenditure (capex) over the medium term.
Weaknesses: Average scale of operations amid intense competition and exposure to regulatory risks: Though increasing, scale of operations continues to remain average, as indicated by revenue of Rs 320-330 crore in fiscal 2025. The plastic packaging industry is highly fragmented, and the consequent intense competition from various players may continue to constrain scalability, pricing power and profitability. The company is exposed to regulatory risks which can impact the company’s performance Increase in scale of operations would remain a key monitorable over the medium term.
Exposure to volatility in input cost: Major raw materials include high-density polyethylene, low-density polyethylene and polypropylene for manufacturing industrial plastics, which are crude oil derivatives, and hence their prices witness fluctuations. Since raw material prices account for bulk of the total production cost, even a slight variation in the prices may drastically impact profitability. Although raw material costs are revised periodically, operating margin will remain susceptible to sharp fluctuations in input cost. |
Liquidity: Adequate Cash accrual, expected at Rs 33-38 crore per annum, will sufficiently cover yearly debt obligation of Rs 9-10 crore over the medium term. Bank limit was utilised at 69% on average over the 12 months through March 2025. Cash and bank balance stood at around Rs 9-10 crores as on March 31, 2025. Current ratio is 1.29 times as on March 31, 2024. Low gearing and moderate networth support its financial flexibility and provides the financial cushion required in case of any adverse conditions or downturn in the business |
Outlook: Stable RPPL will continue to benefit from healthy revenue visibility backed by healthy relationship with regular customers and the promoters’ extensive experience. |
Rating sensitivity factors Upward factors:
Downward factors:
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About the Company RPPL, originally established as a partnership firm in 2003, was reconstituted as a limited company in 2018. It manufactures plastic packaging products, such as rigid plastic sheets and thermoformed packaging containers, cups, bowls punnets, lids and trays for food packaging. It has two manufacturing units at Daman in Daman and Diu and at Sarigam in Gujarat. Mr Ramswaroop Radheshyam Thard and Mr Naresh Thard are the promoters of the company. It is listed on the National Stock Exchange. |
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 - 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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