Kennigton Industries Private Limited

Brickwork Ratings assigns the long-term and short-term ratings for the Bank Loan Facilities of Rs. 179.04 Crs. of Kennigton Industries Private Limited

Particulars

Facilities	Amount(Rs.Crs.)	Tenure	Rating	Regulator
Fund Based	36.85	Long Term	BWR BBB /Stable Assignment	RBI
Non Fund Based	142.19	Short Term	BWR A3 Assignment	RBI
Grand Total	179.04	(Rupees One Hundred Seventy Nine Crores and Four 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 of BWR BBB (Stable) and the short-term rating of BWR A3 to the bank loan facilities of Rs. 179.04 Crore of Kennigton Industries Private Limited. (hereinafter referred to as 'KIPL’ or the ‘Company’). For assigning the ratings, BWR has relied upon the last three years' consolidated financial statements up to FY26, projected financials for FY27 and FY28, and publicly available information and clarifications provided by the management.

The rating reflects a robust, volume-led operational improvement and a comfortable financial risk profile in the absence of any major long-term liabilities. Further, the rating is strengthened by the promoters' extensive experience and established presence in international yarn trading and contract manufacturing driven by long-term exclusive distribution partnerships for the past two decades. The rating, however, is constrained by subdued operating margins linked to trading activity, alongside exposure to volatility in raw material (cotton) prices, geographic customer concentration, and supplier concentration. This risk is partially mitigated by prudent working capital management and a low-capital-intensity, asset-light business model.

KEY RATING DRIVERS

Credit Strengths:

• Extensive Promoter Experience and Proven Industry Track Record :

  The group benefits significantly from the established industry presence of its primary promoter, Mr. Rajeev Ratanlal Tulshyan, who holds over 26 years of hands-on domain experience in textile manufacturing, international contract manufacturing of yarn, and fibre trading. Mr Tulshyan's long-standing operational relationships with major global suppliers have enabled the group to secure exclusive distribution and manufacturing partnerships, providing strong strategic direction and operational stability. BWR believes KIPL will continue to benefit from its experienced management and established relationships with customers and suppliers.

• Significant scale-up in operations and Robust revenue visibility :

  On a consolidated basis, Total Operating Income (TOI) expanded by 139.41% YoY in FY26 to reach Rs. 1,234.41 Cr (up from Rs. 515.61 Cr in FY25 and Rs. 523.58 Cr in FY24). This dramatic revenue growth reflects the rapid scaling of imported fibre distribution in South India in the previous year. Supported by top-line growth, Operating EBITDA expanded to Rs. 50.56 Cr in FY26 (from Rs. 42.63 Cr in FY25), while Profit After Tax (PAT) grew to Rs. 19.82 Cr (from Rs. 13.45 Cr in FY25), reinforcing the group's cash-generation capacity. Further, the group is projecting to achieve TOI of Rs. 1811 crores in FY27 and has already achieved revenues of Rs. 570 crores in its 1st quarter.

• Moderate Financial risk profile :

  Kennigton Industries Pvt. Ltd. (LIPL) maintains a stable capital structure with a total debt to.TNW of 1.75x in FY26 and TOL/TNW of 2.26x. Consistent retention of profits has steadily strengthened the consolidated equity base, with Tangible Net Worth (TNW) expanding from Rs. 92.68 Cr in FY24 to Rs. 128.84 Cr in FY26. Despite carrying short-term working capital borrowings across the parent and subsidiary, DSCR and ISCR remain comfortable at 1.83x and  3.04x, respectively, demonstrating a robust cash flow buffer over debt obligations. BWR believes the financial risk profile of the group is likely to remain moderate in the medium term, owing to steady net cash accruals.

Credit Risks:

• High Supplier and Geographical Concentration Risks :

  KIPL's operations exhibit extreme supplier concentration risk, with over 82% of total raw material and traded goods purchases in FY26 originating from just two supplier groups—Asia Fibre Trading Pte Ltd (45.3%) and the PT Delta Group in Indonesia (~40%). Any operational disruption, credit restriction, or trade restriction affecting these key counterparties could severely impair revenue streams. Furthermore, revenue is geographically concentrated in South India, with Tamil Nadu accounting for ~47% of total FY26 sales due to surging domestic demand for Viscose Fibre.

• Elevated Working capital leverage and Reliance on Non-Fund-Based Limits :

  The group's business model is inherently working capital intensive, driven by an extended operational cycle that includes a 60-day transit time for imported materials, a 30-day inventory stocking period for specialty fancy yarns, and customer credit realization periods ranging between 30 and 60 days. On a consolidated basis, inventories expanded to Rs. 191.61 Cr and trade receivables reached Rs. 67.32 Cr in FY26. The group's current ratio stands at 1.24x. Consequently, operations rely heavily on bank working capital facilities, with short-term borrowings standing at Rs. 216.08 Cr in FY26. The company maintains high utilization of its sanctioned Non-Fund Based (NFB) limits—utilizing Rs. 50 Cr per month in Buyer's Credit 

• Susceptibility to Raw Material Price Volatility, Forex Risk, and Trade Policies :

  The group operates in a highly cyclical textile environment and remains vulnerable to price volatility across cotton, wood pulp (viscose benchmark), and synthetic petrochemical inputs. Inventory holding carries downside valuation risk during sudden market drops. Additionally, imported inventory held in USD during transit remains unhedged prior to being 100% hedged in INR upon purchase. The cost competitiveness of imported Indonesian yarn also relies on international trade policies, specifically zero-duty import benefits under the ASEAN-India Free Trade Area (FTA), leaving operations exposed to potential regulatory or tariff revisions.

ANALYTICAL APPROACH - Consolidated

For arriving at its ratings, BWR has taken a fully consolidated view of KIPL and its 100% subsidiary, Sivaram Yarn Pvt Limited (SYPL; debt rated at BWR BBB-/Stable/BWR A3), reflecting the strong operational, legal and strategic linkages among these two entities. BWR has applied its rating methodology as detailed in the Rating Criteria, as detailed below (hyperlinks provided at the end of this rationale)

RATING SENSITIVITIES

Positive

The rating may be upgraded if there is sustained scale-up in consolidated operating revenues above Rs. 2200 crores, while maintaining the current level of margins, and improvement in key financial metrics such as TOL/TNW below 1.5x.

Negative

The rating may be downgraded if there is a deterioration in the consolidated operating profitability below 3% and TOL/TNW above 3x.

LIQUIDITY INDICATORS - Adequate

On a standalone basis, KIPL generated net cash accruals of Rs. 24.92 crores for FY2026 against current bank loan repayments of Rs. 3.51 crores. The expected cash accruals will remain between Rs. 30 and Rs. 35 crore. The unencumbered Cash and bank balances were Rs 0.17 crores as on March 31, 2025 and Rs. 0.16 crores as of 31st March, 2026. After considering one-way interchangeability from fund-based to non-fund-based, average fund-based working capital utilisation over the past 12 months ended 30th June 2026 stood at around 45%, and non-fund-based utilisation at around 90%. The company has proposed additional non-fund-based banking limits of 50 crores. These additional working capital limits will ease short-term liquidity pressures. The current ratio of 1.32x indicates KIPL has adequate liquidity. Liquidity is further supported by unsecured loans of around Rs. 1.59 crores from corporate entities.

On a consolidated basis, total short-term group debt of KIPL and SYPL stands at Rs. 216 crores. Both entities operate at 90% non-fund-based working capital utilization, indicating that the group is fully leveraging its available credit facilities to support a high volume of imports, backed by strong banking comfort. The group’s consolidated Current Ratio is stable at 1.24x, while the consolidated Quick Ratio stands at a defensive 0.56x. Combined Net cash accruals of Rs. 30.64 crores remain healthy and sufficient to support CPLTD of Rs. 5 crores. The group manages a total consolidated cash pool of Rs. 0.51 crores. 

ABOUT THE ENTITY

Kennigton Industries Pvt Ltd (KIPL) is a Mumbai-based textile company incorporated in 1992. The company is promoted by Mr. Rajeev Ratanlal Tulshyan, who brings over 26 years of business experience in the textile industry. Kennigton operates an asset-light, hybrid model encompassing both trading and manufacturing activities. On the trading side, it holds exclusive India distribution rights for viscose fiber and lyocell fiber sourced from global producer Asia Pacific Rayon (APR). On the production side, the company operates a leased manufacturing facility in Telangana equipped with 17,952 spindles (2,160 MTPA capacity), while complementing its bulk volume requirements through an exclusive contract manufacturing job-work agreement in Indonesia for specialty polyester yarns, cotton yarns, blended yarns (polyester-viscose and cotton-poly mix). Also, Kennigton acquired Siva Ram Yarns Private Limited in 2022 under the NCLT (CIRP) process, making it a 100% wholly owned subsidiary, mainly engaged in the contract manufacturing of Polyester Yarn.

ESG Profile

The company demonstrates an evolving ESG profile based on its environmental, social, and governance practices.

Environmental: Environmental risks remain low and primarily center on supply chain logistics, energy efficiency, and waste management; the company reports no past environmental violations or regulatory penalties.

Social: Kennigton adheres strictly to statutory labor laws and safety norms across its leased facility in Telangana and administrative offices. While overall workforce metrics are not publicly disclosed, gender diversity is reflected at the leadership level, with Mrs. Pooja Rajeev Tulshyan serving on the Board.

Governance: The company is led by a promoter-dominated, two-member Board of Directors (Mr. Rajeev R. Tulshyan and Mrs. Pooja R. Tulshyan) without independent director representation. Internal governance is supported by established accounting controls, statutory compliance frameworks, and strict adherence to international trade regulations, including ASEAN-India FTA zero-duty import compliance.

KEY FINANCIAL INDICATORS (Standalone)

Key Parameters	Units	FY 23 - 24 (Audited)	FY 24 - 25 (Audited)	FY 25 - 26 (Provisional)
Operating Revenue	Rs.Crs.	504.46	492.21	1119.42
EBITDA	Rs.Crs.	26.65	36.48	50.65
PAT	Rs.Crs.	7.36	13.29	24.32
Tangible Net Worth	Rs.Crs.	93.33	106.85	131.46
Total Debt / Tangible Net Worth	Times	1.67	1.56	1.37
Current Ratio	Times	1.14	1.15	1.32

KEY FINANCIAL INDICATORS (Consolidated)

Key Parameters	Units	FY 23 - 24 (Audited)	FY 24 - 25 (Audited)	FY 25 - 26 (Provisional)
Operating Revenue	Rs.Crs.	523.58	515.60	1234.41
EBITDA	Rs.Crs.	31.59	42.63	50.56
PAT	Rs.Crs.	6.83	13.45	19.82
Tangible Net Worth	Rs.Crs.	92.68	106.41	128.84
Total Debt / Tangible Net Worth	Times	1.85	1.70	1.75
Current Ratio	Times	1.21	1.21	1.24

KEY COVENANTS OF THE FACILITY RATED

The terms of the sanction include standard covenants typically required for such facilities

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	36.85	BWR BBB/Stable (Assignment)	NA	NA	NA	NA	NA	NA
Non Fund Based	ST	142.19	BWR A3 (Assignment)	NA	NA	NA	NA	NA	NA
Grand Total		179.04	(Rupees One Hundred Seventy Nine Crores and Four lakhs Only)

Hyperlink/Reference to applicable Criteria

• General Criteria
• Approach to Financial Ratios
• Short Term Debt
• Consolidation of Companies
• Trading Entities
• Manufacturing Company

Analytical Contacts
Muskan Jain Ratings Analyst muskan.j@brickworkratings.com	Niraj Kumar Rathi Senior Director Ratings niraj.r@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 Maharashtra	Cash Credit - Sanctioned	7.50	_	7.50	Simple##
2	Bank of Maharashtra	Letter of Credit (Inland/Import) / Buyers Credit - Sanctioned	_	22.50	22.50	Simple##
3	Punjab National Bank	GECL - Out-standing	1.10	_	1.10	Simple##
4	Punjab National Bank	Cash Credit - Sanctioned	6.00	_	6.00	Simple##
5	Punjab National Bank	Letter of Credit (Inland/Import) / Buyers Credit - Sanctioned	_	56.00	56.00	Simple##
6	Saraswat Bank	Forward Contract - Sanctioned	_	2.19	2.19	Simple##
7	Saraswat Bank	Cash Credit - Sanctioned	11.50	_	11.50	Simple##
8	Saraswat Bank	GECL - Out-standing	0.75	_	0.75	Simple##
9	Saraswat Bank	Letter of Credit (Inland/Import) / Buyers Credit - Sanctioned	_	32.50	32.50	Simple##
10	Yes Bank	Letter of Credit (Inland/Import) / Buyers Credit - Sanctioned	_	29.00	29.00	Simple##
11	Yes Bank	Cash Credit - Sanctioned	10.00	_	10.00	Simple##
Total			36.85	142.19	179.04
TOTAL (Rupees One Hundred Seventy Nine Crores and Four lakhs Only)

## BWR complexity levels are meant for educating investors. The BWR complexity levels are available at www.brickworkratings.com / download / ComplexityLevels.pdf.

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