Saanika Polytex Pvt. Ltd

Brickwork Ratings has assigned the long term and short term ratings for the Bank Loan Facilities of Rs. 121.45 Crs. of Saanika Polytex Pvt. Ltd.

Particulars

Facilities	Amount(Rs.Crs.)	Tenure	Rating	Regulator
Fund Based	118.95	Long Term	BWR BBB - /Stable Assignment	RBI
Non Fund Based	2.50	Short Term	BWR A3 Assignment	RBI
Grand Total	121.45	(Rupees One Hundred Twenty One Crores and Forty Five lakhs Only)

Note:
1. Please refer to BWR website www.brickworkratings.com for the definition of the ratings
2. Refer to Annexures I, II, and III for details of rated bank loan facilities, debt instruments, and the List of Entities Consolidated RATING ACTION / OUTLOOK

Brickwork Ratings has assigned the long-term rating and short-term rating of BWR BBB- (Stable) and BWR A3 for the bank loan facilities of Rs. 121.45 Crore of Saanika Polytex Private Limited.

For assigning the ratings, BWR has relied upon the last three year combined financials till FY26 and Projected financials for FY27 and FY28 as well as publicly available information and clarification provided by the management.

Brickwork Ratings (BWR) has assigned the ratings of SPPL considering factors such as the extensive industry experience of the promoters, the group's robust operational scale in Surat's prominent textile hub and its government-recognized status as a Two-Star Export House. The ratings also strongly reflect the group's successful strategic shift toward vertical integration into high-margin finished fabrics, driving a sharp recovery in operating margins and net profitability. Furthermore, the ratings are supported by a stable capital structure and optimized adjusted leverage following the treatment of promoter unsecured loans as quasi-equity, alongside adequate debt coverage indicators.

The ratings are, however, constrained by the group's inherent exposure to raw material price volatility and intense competitive pressures within a highly fragmented textile sector.

The rating outlook has been assigned as "Stable" as BWR believes that Saanika Polytex Private Limited 's business risk profile will be maintained over the medium term. The 'Stable' outlook indicates a low likelihood of rating change over the medium term. The rating outlook may be revised to 'Positive' in case the revenue and profitability margins show sustained improvement. The rating outlook may be revised to 'Negative' if the financial risk profile goes down.

KEY RATING DRIVERS

Credit Strengths:

• Extensive experience of the promoter and established market presence :

  The promoter’s nearly two-decade-long presence in the polyester yarn industry—with operations spanning polyester draw texturised yarn, air textured yarn and knitted fabrics—has helped the Saanika group establish a robust market position. This deep domain expertise is backed by a diversified customer base across domestic and export markets alongside an extensive supplier network.

• Locational Advantage :

  The group's manufacturing facilities are strategically positioned in Surat, Gujarat, the core geographic hub of India's synthetic textile landscape. This location facilitates streamlined logistical access to raw material networks, skilled labor pools, and major domestic trade channels.

• Resilient Growth Trajectory & Improving Core Profitability :

  From a consolidated perspective, the group has successfully scaled its operations over the medium term, expanding Total Operating Income (TOI) from Rs. 664.05 Crores in FY24 to Rs. 698.11 Crores in FY25. Despite a brief macroeconomic consolidation in FY26 to Rs. 674.57 Crores. In response to industry-wide margin pressures on conventional texturised yarn, management successfully pivoted production capacity toward high-margin finished fabrics. This expanded consolidated OPBDIT to an audited high of Rs. 37.58 Crores in FY26, raising consolidated EBITDA margins from 4.4% to 6.2%.

• Stable Capital Structure and Improving Gearing :

  The group’s financial risk profile is underpinned by a stable capital structure and a steadily improving consolidated leverage profile . Evaluated on a combined basis, the group’s gearing (Total Debt/TNW) has shown continuous structural improvement, declining from 1.54 times in FY24 to 1.24 times in FY26, while the consolidated TOL/TNW ratio contracted from 1.82 times in FY24 to 1.61 times in FY26, reflecting a healthy reduction in total external obligations against equity . The capital structure is further strengthened by continuous promoter support via subordinated unsecured loans totaling Rs. 42.90 Crore . Treating these subordinated promoter loans as quasi-equity optimizes the adjusted consolidated gearing to a robust 0.82 times in FY26 against an Adjusted Net Worth of ?227.96 Crore, providing a substantial capital cushion to absorb market volatility .

Credit Risks:

• Highly Competitive & Fragmented Sector :

  The texturised yarn and knitting segments feature low entry barriers, giving rise to fierce competition from a vast network of both organized and unorganized domestic players. This extreme market fragmentation fragments aggregate market share and fundamentally restricts the standalone pricing power of producers, leaving them reliant on operational agility and raw scale to defend margins.

• High Supplier Concentration & Raw Material Volatility Risk :

  The group maintains a highly concentrated procurement profile, with the top 5 vendors driving roughly 87% of aggregate raw material purchases. Notably, Reliance Industries Limited serves as the anchor supplier, providing 64% of Partially Oriented Yarn (POY) to SIPL and 70% to SPPL. While counterparty default risk is low, any logistical or commercial disruption at the supplier level poses a direct threat to production continuity.The primary raw materials are petrochemical derivatives, exposing the group's input costs directly to global crude oil price fluctuations and realization cycles.

• Inherent Industry Cyclicality & Seasonal Demand Skenwess :

  Standalone revenue profiles demonstrate susceptibility to broader industry shifts; for instance, SIPL's absolute standalone top-line contracted by Rs. 34.56 Crores over two years due to falling texturised yarn realizations. Revenue streams exhibit noticeable systemic seasonality, with nearly 30% of annual sales volume consistently heavily concentrated in the final quarter (Q4) of the fiscal year. This sharp rise requires stringent working capital coordination and active inventory management to prevent cash flow strains during off-peak quarters.

ANALYTICAL APPROACH - Standalone

BWR has taken a group analytical approach to evaluate the business and financial risk profiles of Saanika Industries Private Limited and Saanika Polytex Private Limited (collectively referred to as the Saanika Group). In line with BWR’s group support criteria, both entities operate under common promoter ownership, share a unified management team and function in the same line of business with significant operational synergies. Crucially, the group exhibits strong financial fungibility, with cash flows and liquidity reallocated seamlessly across entities to meet debt servicing and business requirements. In the absence of a legal parent-subsidiary structure required for formal accounting consolidation, a group analytical approach accurately captures the group’s true economic reality, total debt burden, and aggregate debt-servicing capacity. And there are implicit support within group.

Sr. No.	Risk assessement & Rating Criteria	Remarks
1	Analysing the entity on a standalone basis	Yes, we have analysed entity on standalone basis.
2	Analysing the overall credit quality and rating of the group	Yes, we have analyses overall credit quality of the group
3	Operations similar to those of the group/parent/flagship company	Both SIPL and SPPL operatig in similar line of business.
4	close business and financial linkages with the group/parent/flagship entity or be associated with diversified businesses	Yes, there is close business and financial linkages
	Following adjusments are made while combining financials
1	Cancelling all off-setting reciprocal pairs, such as assets and liabilities, revenues, costs, investment and equity accounts to nullify all intra-group transactions	Yes, adjusments have been made
2	Adjusts and nets-off all the sales made within the group entities. Such a method is referred to as the line-by-line addition method used for subsidiaries, proportionate consolidation method for JVs and equity methods for associates.
3	An investment holding company is one whose major portion of assets are in the form of equity, debts, loans and advances to group companies. Such entities rely mainly on dividends, interests and capital gains on their All investments in related entities and borrowings within the group are netted- off from the group’s net worth.	Not Applicable

 

RATING SENSITIVITIES

Positive Triggers:

All triggers are based on combined financials not based on standalone financials.

• Sustained expansion in scale of operations, with Total Operating Income (TOI) crossing Rs. 750–800 crore
• Stabilization of the core operating profitability, with the OPBDIT margin expanding and sustaining above 6.50%
• Rationalization of the working capital conversion cycle down below 120 days

Negative Triggers:

• A sharp drop or stagnation in top-line growth below Rs. 650 crore, or contraction in the OPBDIT margin below 4.50%
• Any aggressive, un-envisaged debt-funded capex or incremental long-term borrowings that disrupts the deleveraging path, causing Total Debt / TNW to increase or stay above 1.50x
• Increased reliance on short-term bank borrowings driven by a stretched working capital cycle where the operating loop extends beyond 150 days
• Significant funds being moved out of the core entity via loans/advances to group companies or directors exceeding current trends, which would diminish the available liquidity buffer

LIQUIDITY INDICATORS - Adequate

At the group level, the liquidity framework remains adequate and cohesive. Both operating arms—SIPL and SPPL—demonstrate synchronized financial management, effectively utilizing their respective credit lines to drive scale and maintain market momentum.Total short-term group debt stands at Rs. 129.79 crore. Operating both entities at 65% working capital utilization indicates that the group is fully leveraging its available credit facilities to support a high volume of simultaneous project execution, backed by strong banking comfort. The group’s consolidated Current Ratio is healthy at 1.66x, while the consolidated Quick Ratio stands at a defensive 0.63x. This reflects a group-wide focus on maintaining active operational assets, with Rs. 152.31 crore tied up in moving inventory and Rs. 114.43 crore in trade debtors, both of which serve as a reliable pipeline for upcoming cash generation. Total short-term group debt stands at Rs. 129.79 crore. Operating both entities at 65% working capital utilization indicates that the group is fully leveraging its available credit facilities to support a high volume of simultaneous project execution, backed by strong banking comfort. The group’s consolidated Current Ratio is healthy at 1.66x, while the consolidated Quick Ratio stands at a defensive 0.63x. This reflects a group-wide focus on maintaining active operational assets, with Rs. 152.31 crore tied up in moving inventory and Rs. 114.43 crore in trade debtors, both of which serve as a reliable pipeline for upcoming cash generation. The group manages a total consolidated cash pool of Rs. 4.80 crore. While modest against total current liabilities of Rs. 189.88 crore, this streamlined cash position is offset by the steady, rolling monetization of the group's substantial current asset base, ensuring adequate coverage for systemic operational commitments.

ABOUT THE ENTITY

Based in Surat, Gujarat and managed by Mr. Sumit Agarwal, the Saanika Group follows a strategic combined approach by integrating the specialized capabilities of Sanika Industries Private Limited (SIPL) and Sanika Polytex Private Limited (SPPL).

SPPL adding a capacity of 3,07,00,000 Kgs of yarn and 70,06,000 Kgs of knitted fabrics annually, the group is positioned as a one-stop destination for high-quality, sustainable textile solutions. By combining SIPL’s nearly two decades of manufacturing legacy with SPPL’s modern production technology, the Saanika Group optimizes its operational scale to meet the complex demands of both domestic and international markets as a government-certified "Two Star Export House."This unified group structure is to create a vertically integrated textile ecosystem. SIPL (incorporated in 2006) serves as the group’s foundational yarn manufacturing arm with an annual capacity of 32,460,000 Kgs and holds prestigious Global Recycled Standard (GRS) and Oeko-Tex certifications. SPPL (setup in 2019) complements this by diversifying the group’s portfolio into knitting and finished fabrics, having commenced commercial operations in March 2021. With

ESG Profile

NA

KEY FINANCIAL INDICATORS (Standalone)

Key Parameters	Units	FY 23 - 24 (Audited - Annual)	FY 24 - 25 (Audited - Annual)	FY 25 - 26 (Audited - Annual)
Operating Revenue	Rs.Crs.	283.59	346.92	328.67
EBITDA	Rs.Crs.	17.83	21.94	28.26
PAT	Rs.Crs.	3.31	5.31	10.01
Tangible Net Worth	Rs.Crs.	33.39	38.70	91.61
Total Debt / Tangible Net Worth	Times	1.54	1.35	1.15
Current Ratio	Times	1.55	1.64	1.66

KEY FINANCIAL INDICATORS (Consolidated)

Key Parameters	Units	FY 23 - 24 (Audited)	FY 24 - 25 (Audited)	FY 25 - 26 (Audited)
Operating Revenue	Rs.Crs.	664.05	698.11	674.57
EBITDA	Rs.Crs.	30.11	29.15	37.58
PAT	Rs.Crs.	9.39	6.96	14.94
Tangible Net Worth	Rs.Crs.	164.35	169.53	227.37
Total Debt / Tangible Net Worth	Times	1.54	1.35	0.81
Current Ratio	Times	1.55	1.64	1.66

KEY COVENANTS OF THE FACILITY RATED

As per the normal terms and conditions stipulated in the sanction letters.

STATUS OF NON-COOPERATION WITH PREVIOUS CRA

Not Applicable

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

Facilities	Current Rating  (2026)			2025		2024		2023
Type	Tenure	Amount (Rs.Crs.)	Rating	Date	Rating	Date	Rating	Date	Rating
Fund Based	LT	118.95	BWR BBB-/Stable (Assignment)	NA	NA	NA	NA	NA	NA
Non Fund Based	ST	2.50	BWR A3 (Assignment)	NA	NA	NA	NA	NA	NA
Grand Total		121.45	(Rupees One Hundred Twenty One Crores and Forty Five lakhs Only)

Hyperlink/Reference to applicable Criteria

• General Criteria
• Approach to Financial Ratios
• Ratings based on Group Support
• Short Term Debt
• Manufacturing Company

Analytical Contacts
Tripathi Deep GopalKumar Ratings Analyst deep.tripathi@brickworkratings.com	Mukesh Kumar Verma Associate Director mukesh.verma@brickworkratings.com
Media Contact | media@brickworkratings.com	Client Support | clientsupport@brickworkratings.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	Bank of Baroda	Term Loan - Out-standing	5.44	_	5.44	Simple##
2	Bank of Baroda	Term Loan - Out-standing	2.63	_	2.63	Simple##
3	Bank of Baroda	Term Loan - Out-standing	21.66	_	21.66	Simple##
4	Bank of Baroda	Term Loan - Out-standing	9.65	_	9.65	Simple##
5	Bank of Baroda	Term Loan - Out-standing	6.45	_	6.45	Simple##
6	Bank of Baroda	Term Loan - Proposed	9.31	_	9.31	Simple##
7	Bank of Baroda	Cash Credit - Sanctioned	58.00	_	58.00	Simple##
8	Bank of Baroda	Bank Guarantee - Out-standing	_	2.50	2.50	Simple##
9	Bank of Baroda	Emergency Credit Line Guarantee Scheme (ECLGS) - Out-standing	0.81	_	0.81	Simple##
10	Bank of Baroda	PC/PCFC - Sanctioned	5.00	_	5.00	Simple##
Total			118.95	2.50	121.45
TOTAL (Rupees One Hundred Twenty One Crores and Forty Five lakhs Only)

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