Texport Syndicate Pvt. Ltd.

Brickwork Ratings has assigned a long-term rating and a short-term rating to the bank loan facilities of Rs. 190.24 Cr of Texport Syndicate Private Limited (TSPL).

Particulars

Facilities**	Amount(Rs.Crs.)	Tenure	Rating#
Fund Based	148.00	Long Term	BWR A - /Stable Assignment
Non Fund Based	42.24	Short Term	BWR A2 + Assignment
Grand Total	190.24	(Rupees One Hundred Ninety Crores and Twenty Four lakhs Only)

#Please refer to BWR website www.brickworkratings.com for definition of the ratings
**Details of Bank Loan facilities,consolidation or instruments are provided in Annexure RATING ACTION / OUTLOOK

Brickwork Ratings has assigned a long-term rating of BWR A- (Stable) and a short-term rating of BWR A2 + to the bank loan facilities of Rs. 190.24 Cr of Texport Syndicate Private Limited (TSPL).

The assigned ratings reflect TSPL’s established operational track record of over four decades in the garment export industry, an experienced and actively involved promoter group, robust and vertically integrated manufacturing capabilities, diversified product portfolio, strong customer relationships with reputed global apparel brands, stable profitability, strengthening capital structure, and efficient working capital management.

However, the ratings remain constrained by high client and geographic concentration, significant dependence on exports to the US and UK markets, exposure to global economic and demand cycles, vulnerability to foreign exchange fluctuations and tariff risks, as well as the inherent competitiveness and policy sensitivity of the apparel export industry.

Outlook: Stable

The Stable outlook reflects TSPL’s established market position, long-standing relationships with reputed global clients, healthy operating performance, and adequate financial flexibility. The company’s strong cash accruals, conservative leverage, and proactive risk management—through diversification of export markets and efficient working capital practices—are expected to support stable business and credit metrics over the medium term. The outlook may be revised if there are significant adverse changes in customer concentration, trade regulations, or operational performance that materially weaken the company’s financial profile.

KEY RATING DRIVERS

Credit Strengths:

• Established Track Record with Experienced Management :

  TSPL has been in the garment export business for over four decades, having started operations in 1978. Promoted and managed by Mr. Rajendra Goenka and his family, the company benefits from the promoters’ deep sector knowledge and hands-on involvement. Mr. Goenka’s leadership is complemented by his sons, Mr. Amit Goenka (production head) and Mr. Anish Goenka (technology and marketing), who have over 25 years of domain experience each.

• Robust Manufacturing Capabilities and Product Diversification :

  TSPL operates multiple manufacturing units across India, with a cumulative installed capacity of approximately 160 lakh garments per annum. Its product mix spans shirts, trousers, jackets, nightwear, and children's garments, catering to global markets. The company’s vertical integration—including design, embroidery, sampling, in-house laundry (70,000 pcs/day), and finishing—enhances control over cost, quality, and timelines.

• Strength in Customer Relationships and Market Access :

  TSPL benefits from long-standing relationships with reputed global clients, which mitigate the risks associated with high customer and geographic concentration. The top 10 clients contribute nearly 90% of revenue, with exports making up 83%, primarily from the U.S. (64%) and the UK (32%). The Company supplies to leading departmental chains and fashion houses across the U.S., UK, EU, and Australia, receiving repeat orders due to its ability to consistently deliver on design, quality, and timely deliveries. These relationships ensure stable order inflows, timely realizations, and consistent business even amid global trade uncertainties. TSPL supports marketing through sampling, merchandising, and buyer-centric customization, adding value and strengthening client engagement. The Company is also proactively diversifying export markets to Europe, GCC countries, and Southeast Asia, leveraging client trust to absorb incremental costs, improving operational efficiency, adopting technology, and exploring new customers and regions. This strategic approach enhances revenue stability, reduces dependence on any single client or geography, and strengthens TSPL’s long-term competitiveness.

• Stable Profitability and Robust Capital Structure :

  TSPL demonstrated stable operational performance in FY25, with total operating income recovering to Rs. 525.84 crore from Rs. 476.94 crore in FY24, a growth of 10.25%. EBITDA increased to Rs. 39.98 crore from Rs. 31.25 crore, with margins improving to 7.60% from 6.55%, supported by higher realizations and cost-efficiency measures.

  However, at the net level, PAT declined to Rs. 16.92 crore in FY25 from Rs. 19.58 crore in FY24, leading to a reduction in net margin to 3.22% from 4.10%. This moderation in PAT was primarily due to a one-time loss of Rs. 9.27 crore on the sale of an asset. Excluding this exceptional loss, the underlying profitability would have reflected an improvement consistent with the operational growth. The company’s financial risk profile remained robust, with overall gearing improving to 0.67x as of March 31, 2025, from 0.90x, and TOL/TNW improving to 1.10x from 1.26x. Coverage metrics stayed healthy, with an interest coverage ratio of 5.08x (4.04x in FY24), and the absence of term debt provides further flexibility to the capital structure.

• Efficient Working Capital Management :

  TSPL has maintained an efficient working capital cycle, which stood at 111 days in FY2025 and is expected to remain around 120 days in the future.. The Company generally provides a credit period of 60–80 days to its customers. Despite around 35% of revenue being billed in the last quarter of FY2025, all debtors were recovered within 90 days, demonstrating strong collection efficiency. 

Credit Risks:

• Exposure to Global Demand Cycles and Market Dependence :

  TSPL is a 100% export-oriented company, with total exports accounting for ~79% of revenue in FY2025. Substantial revenue comes from the US (Rs. 265.70 crore; 64% of exports, 50.5% of total revenue), the UK (Rs. 132.77 crore; 25% of exports), and Europe (Rs. 16.16 crore; 3% of exports). Its performance is closely tied to the economic health of these regions. Any slowdown, reduction in discretionary spending, or changes in consumer preferences could lead to lower order volumes, pricing pressure, or delayed payments, directly affecting cash flows and profitability. While TSPL is diversifying into Europe, GCC countries, and Southeast Asia, its dependence on developed economies—particularly the US—remains a key risk.

• US Tariff and Foreign Exchange Risks :

  TSPL faces potential margin pressure from US tariffs on apparel exports (30–50%), particularly if incremental costs cannot be passed on to customers. High-tariff scenarios combined with unfavorable currency movements could materially affect profitability. Most revenue is dollar-denominated, though natural hedges and forward contracts mitigate FX risk; rupee appreciation could still compress margins. As of June 30, 2025, there was no unhedged foreign currency exposure.

  Policy changes in US export duties could affect competitiveness, but TSPL has adopted operational efficiencies, partial tariff pass-through, strategic pricing for new orders, and supply chain optimization. Longer-term mitigation includes geographic diversification into Europe, GCC countries, and Southeast Asia. During the five months ending August 2025, US export volumes exceeded the previous year, with no order cancellations or price renegotiations for existing orders.

• Industry Competition, Client Concentration, and Trade Policy Sensitivity :

  The Indian apparel export sector is highly fragmented and competitive, with strong players like Bangladesh and Vietnam benefiting from lower manufacturing costs and preferential trade access. Rising compliance costs, wage inflation, and evolving ESG/environmental regulations further pressure margins. TSPL’s top 10 clients contribute ~90% of revenue, and the US market alone accounts for over 50% of total revenue, making the company moderately exposed to client- and geography-specific risks. Loss of one or more major clients, particularly in the US, could significantly impact revenue and cash flows. Additionally, changes in trade policies or tariffs in key markets remain structural risks, necessitating proactive strategies such as market diversification, operational efficiencies, and pricing pass-through mechanisms to mitigate potential losses.

ANALYTICAL APPROACH - Standalone

For arriving at the assigned ratings, BWR has applied its established rating methodologies, as detailed in the applicable Rating Criteria. (Hyperlinks to the detailed criteria are provided at the end of this rationale.)

RATING SENSITIVITIES

Upward Sensitivities

• Geographic and Revenue Diversification: Improvement in export diversification such that no single region accounts for more than 40% of total exports, coupled with overall revenue exceeding Rs. 750 crore.
• Profitability and Risk Management: EBITDA margin above 9%, supported by effective management of US tariff exposure, partial tariff pass-through to customers, and favorable currency movements (e.g., dollar appreciation).

Downward Sensitivities 

• Tariff and Currency Pressures: Adverse impact from US tariffs (30–50%) combined with unfavorable currency movements (e.g., rupee appreciation), resulting in operating income below Rs. 500 crore or EBITDA margin below 6%, affecting cash accruals and debt servicing.
• Financial and Client Concentration Risks: Significant increase in debt for capex or working capital (overall gearing > 1.0x, TOL/TNW > 2.0x, interest coverage < 2.5x) or loss of one or more major clients, impacting scale of operations and profitability.

LIQUIDITY INDICATORS - Adequate

TSPL maintains an adequate liquidity position, supported by sufficient cash accruals of Rs. 24.57 crore in FY2025 against minimal bank loan repayments of Rs. 0.07 crore. With no major term loans expected in the long term, the cash accruals are available to fund working capital requirements. The Company held Cash and Bank Balance of Rs. 7.33 crore as on 31st March 2025, and average working capital utilisation over the past 12 months ending June 2025 remained comfortable at 50%, reflecting prudent management of resources. The current ratio improved to 1.19x in FY2025 from 1.10x in FY2024, underscoring stable liquidity. Strong banking relationships, efficient working capital management, and steady accrual generation provide additional financial flexibility, ensuring the Company can comfortably meet its operational and short-term obligations.

ABOUT THE ENTITY

Texport Syndicate Private Limited (TSPL), formerly known as Texport Syndicate (India) Limited, is a Mumbai-based, 100% export-oriented garment manufacturing company promoted and closely held by the Goenka family since its inception in 1978. TSPL is one of India’s oldest and most reputed apparel exporters, known for its ethical standards, production capabilities, and consistent quality. The company caters to leading fashion brands across the US, Europe, Canada, and Australia.

TSPL operates multiple manufacturing facilities across Mumbai, Bengaluru, Tirupur, and Koduru (AP), with an installed capacity of 160 lakh garments annually. It produces a wide range of woven and knitted garments such as shirts, trousers, jackets, T-shirts, nightwear, and children's clothing. TSPL has deep expertise in product development, and its operations are supported by in-house sampling, CAD/CAM systems, multi-head embroidery machines, and an in-house laundry facility capable of processing up to 70,000 garments daily.

The company follows a vertically integrated business model with capabilities spanning design, sourcing, cutting, stitching, washing, finishing, and packaging, supported by a strong quality control framework at every stage. It sources fabrics and trims from reputed Indian mills and has a skilled workforce of over 7,000 employees. TSPL places strong emphasis on product innovation, lean manufacturing, and customer-specific design execution.

KEY COVENANTS OF THE FACILITY RATED

The sanction terms governing the banking facilities include standard financial and non-financial covenants, which are customary for facilities of this nature.

STATUS OF NON-COOPERATION WITH PREVIOUS CRA

Not Applicable

RATING HISTORY FOR LAST THREE YEARS (including withdrawal and suspended)

Facilities	Current Rating  (2025)			2024		2023		2022
Type	Tenure	Amount (Rs.Crs.)	Rating	Date	Rating	Date	Rating	Date	Rating
Fund Based	LT	148.00	BWR A-/Stable (Assignment)	NA	NA	NA	NA	NA	NA
Non Fund Based	ST	42.24	BWR A2+ (Assignment)	NA	NA	NA	NA	NA	NA
Grand Total		190.24	(Rupees One Hundred Ninety Crores and Twenty Four lakhs Only)

Hyperlink/Reference to applicable Criteria

• General Criteria
• Approach to Financial Ratios
• Short Term Debt
• Manufacturing Company

Analytical Contacts
Shreekant Digambar Kadere Senior Rating Analyst shreekant.dk@brickworkratings.com	Niraj Kumar Rathi Senior Director Ratings niraj.r@brickworkratings.com
1-860-425-2742 | media@brickworkratings.com	Customer Support | CustSupport@brickwrokratings.com

SL.No.	Name of the Bank/Lender	Type Of Facilities	Long Term(Rs.Crs.)	Short Term(Rs.Crs.)	Total(Rs.Crs.)	Complexity of the Instrument
1	Canara Bank	Forward Contract - Sanctioned	_	1.74	1.74	Simple##
2	Canara Bank	FBWC (CC/EPC/FBD/FBP) - Sanctioned	36.00	_	36.00	Simple##
3	Canara Bank	ILC/FLC/BG - Sanctioned	_	13.75	13.75	Simple##
4	IndusInd Bank	FBWC (CC/EPC/FBD/FBP) - Sanctioned	36.00	_	36.00	Simple##
5	IndusInd Bank	ILC/FLC - Sanctioned	_	8.00	8.00	Simple##
6	IndusInd Bank	Forward Contract - Sanctioned	_	4.50	4.50	Simple##
7	RBL Bank	FBWC (CC/EPC/FBD/FBP) - Sanctioned	40.00	_	40.00	Simple##
8	RBL Bank	Loan Equivalent Risk - Sanctioned	_	7.00	7.00	Simple##
9	State Bank Of India (SBI)	Letter of Credit - Sanctioned	_	4.85	4.85	Simple##
10	State Bank Of India (SBI)	FBWC (CC/EPC/FBD/FBP) - Sanctioned	36.00	_	36.00	Simple##
11	State Bank Of India (SBI)	Forward Contract - Sanctioned	_	2.40	2.40	Simple##
Total			148.00	42.24	190.24
TOTAL (Rupees One Hundred Ninety Crores and Twenty Four lakhs Only)

## BWR complexity levels are meant for educating investors. The BWR complexity levels are available at www.brickworkratings.com / download / ComplexityLevels.pdf. Investors queries can be sent to info@brickworkratings.com.