| Zodiac Clothing Company Limited | ||||
| Rating reaffirmed at 'Crisil BB / 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 BB/Stable’ rating on the long-term bank loan facilities of Zodiac Clothing Company Limited (ZCCL; part of zodiac group).
The ratings reflect established market presence of the group in men’s clothing and accessories market and moderate capital structure. These strengths are partially offset by working capital intensive nature of operations and volatile operating profitability. |
Analytical Approach For arriving at the ratings, Crisil Ratings has combined the business and financial risk profiles of ZCCL along with its wholly owned subsidiary, i.e., Zodiac Clothing Co. S.A. and step- down subsidiaries, i.e., Zodiac Clothing Bangladesh Limited, Zodiac Clothing Company Inc. (USA), Zodiac Clothing Co. (UAE) LLC. and Zela Technologies, Inc (USA) collectively referred to as ‘Zodiac Group’.
Please refer Annexure - List of Entities Consolidated, which captures the list of entities considered and their analytical treatment of consolidation. |
Key Rating Drivers - Strengths Established market presence: Group has an established market presence in both the domestic and international markets for its brands like “Zodiac’, “ZOD!” and Z3 across different categories. This market position is as a result of extensive experience of the promoters, which has spanned over 7 decades.
Industry experience of navigating across various business cycles long-standing relationships with customers and suppliers has led to a deep understanding of the market dynamics. ZCCL has benefitted from promoter experience as reflected in increasing scale of operations. ZCCL has clocked in a revenue of Rs 39 Cr Q1 fiscal 2026 as against Rs 38 Cr in Q1 of fiscal 2025 and Rs 33 Cr in Q1 of fiscal 2024.
Moderate capital structure: Healthy networth which stood at Rs 205 Cr as on March 31, 2025, coupled with a limited reliance on external debt has led to a moderate capital structure as reflected in gearing and total outside liabilities to adjusted networth ratio of 0.23 time and 0.66 time as on March 31, 2025.
While cash loss has resulted in erosion of networth of the company, it continues to remain healthy at Rs 205 crore as on March 31, 2025. Improvement in profitability levels, thereby leading to an improvement in the networth will remain monitorable. |
Key Rating Drivers - Weaknesses Working capital intensive nature of operations: Although on an improving trend, operations of the group continue to remain working capital intensive as reflected in Gross Current Asset (GCA) of 238 Days as on March 31, 2025, against 269 Days as on March 31, 2024.
Reduction in GCA days was a result of reduction in inventory and debtor levels. Inventory days continue to remain high at 126 days as on March 31,2025 while debtor days are moderate and averaged between 45-55 days for the past three fiscal years. These working capital requirements are met with bank lines and creditors.
Volatile operating profitability: Company has incurred operating loss over the past three fiscal years. Operating loss was in range of 10.85 % to 2.26 % during this period. Operating losses were due to volatile raw material prices, high employee costs and marketing expenses.
With a reduction in employee costs and cost cutting measures taken by the group, operating losses have reduced from Rs 16 Cr in fiscal 2024 to Rs 13 Cr in fiscal 2025. Further improvement in operating profitability levels will remain a key rating sensitivity factor. |
Liquidity Stretched Liquidity position of the group is marked by continuation of cash losses in the past three fiscal years as against nil repayment obligations. Bank limit utilization averaged at 78% for the past twelve months ended August 2025. Liquidity position is partially supported by unsecured loans from promoters and free cash and cash equivalents balance over Rs 40 Cr as on March 31, 2025, and absence of any major debt funded capex plans. |
Outlook Stable Crisil Ratings believe the group will continue to benefit from the extensive experience of its promoter, and established relationships with clients. |
Rating sensitivity factors Upward factors:
Downward factors:
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About the Group ZCCL was initially set up as partnership firm in 1954 and later incorporated as limited company in 1984. ZCCL along with its wholly owned subsidiary & step-down subsidiaries, is engaged in manufacturing of readymade garments, primarily catering to men’s clothing such suits, shirts, trousers, and club and casual wear, as well as accessories comprising belts, cufflinks, handkerchiefs, pochettes, and socks. ZCCL market’s its products through its own brands, “‘Zodiac”- men’s formal wear, “ZOD!”- party/club wear and “Z3”- popular for its relaxed casual wears.
ZCCL is listed on Bombay Stock Exchange (BSE) and National Stock Exchange of India Ltd. (NSE). Currently, its operations are headed by Mr. Anees Yusuf Noorani (Chariman & Director), Mr. Salman Yusuf Noorani (Vice Chairman & Managing Director), Mr. Mohamed Awais Jehangir Noorani (Whole-time Director) and Mr. Adnan Salman Noorani (Whole-time Director). |
Key Financial Indicators
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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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