Deft Organics Ltd.

Brickwork Ratings assigns the long-term rating and the short-term rating for the Bank Loan Facilities of Rs. 57.99 Crs. of Deft Organics Ltd.

Particulars

Facilities**	Amount(Rs.Crs.)	Tenure	Rating#
Fund Based	45.31	Long Term	BWR BB + /Stable Assignment
	(3.00)
	(6.50)
Non Fund Based	12.68	Short Term	BWR A4 + Assignment
	(6.00)
Grand Total	57.99	(Rupees Fifty Seven Crores and Ninety Nine 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 assigns the long-term rating of "BWR BB+/Stable" and the short-term rating of "BWR A4+" for the bank loan facilities of Deft Organics Ltd.

BWR has assigned the rating based on the promoters' extensive experience in the pharmaceutical sector, a well-organized of Good Engineering Practices (GEP) procedures, and the presence of a skilled technical team. The ratings factor in the operational and financial support extended by the sister concern. Deft Organics Ltd. holds key certifications, including an FDA manufacturing license, WHO-GMP, and COPP for major products, enhancing its credibility in exports and contract manufacturing. The company’s liquidity position remained stretched; however, there are concerns related to revenue fluctuations and an increase in debt levels.

The Stable outlook on the "BWR BB+" rating reflects BWR's opinion that the financial risk profile of Deft Organics Ltd. is expected to be maintained over the medium term, given steady revenues. 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:

• Long track record of operations and extensive experience of the promoters :

  The promoters’ extensive experience in the manufacturing sector, particularly in the production of specialty bulk drugs, APIs, and finished formulations, will continue to support the business risk profile. The promoters will also extend need-based funding support to the company.

Credit Risks:

• Raw Material Cost Fluctuations :

  The company faces pricing pressure in the API segment due to raw material cost fluctuations, particularly with Heparin, a key imported input subject to global price volatility. Since product pricing is closely linked to input costs, this poses a challenge, especially as the company looks to scale its PFS volumes.

• Increased Competition / Market Pressure :

  The bulk drug industry is highly competitive due to the presence of numerous domestic as well as global players, which exerts pricing pressure on individual entities. This necessitates the company to remain cost competitive to maintain profitability. Due to high competition in the market, companies often lower prices to keep or gain customers. The launch of generic LMWH products by other players can reduce the company’s ability to control prices. Also, strict government rules and any negative policy changes can affect the company’s credit profile, while strong competition in the generics segment limits pricing flexibility.

ANALYTICAL APPROACH - Standalone

Standalone - For arriving at its ratings, BWR has considered the standalone performance of Deft Organics Ltd..BWR has applied its rating methodology as detailed in the Rating Criteria (hyperlinks provided below).

RATING SENSITIVITIES

Going forward, the ability of the firm to increase its scale of operations, improve profitability, efficiently manage its working capital and strengthen itsoverall credit profile would be the key rating sensitivities.

Positive: The outlook may be revised to Positive if the company records significantly better-than-expected growth in revenues along with improvement inprofitability levels and efficient working capital management, resulting in better debt coverage metrics and liquidity profile.

• An increase in Total Operating Income beyond Rs. 50 Cr on a sustained basis while maintaining operating margins above 25%
• Continued growth in PAT beyond Rs.4 Cr, along with healthy accruals.
• The current Ratio remains above 2x, by a stable cash balance

Negative: The outlook may be revised to Negative if the company reports significantly lower-than-expected performance, resulting in lower-than-estimated coverage indicators and a weaker liquidity position.

• Decline in revenue below Rs. 30 Cr or an operating margin falling below 15%
• Increase in Total Debt/TNW beyond 1.15x or weakening of TOL/TNW 

LIQUIDITY INDICATORS - Stretched

The liquidity position of the company remained stretched. The company’s average utilization of its Overdraft and Cash Credit limits stood at 95% over the past 12 months. The current ratio was 1.48x in FY2024, which further improved to 2.88x in Provisional FY2025, indicating better short-term liquidity. The company generated net cash accruals of Rs. 5.64 Cr in FY2024 and Rs. 7.70Cr in FY 25 and Rs. 7.56 cr in projected FY 26 over the CPLTD of Rs. 2.12Cr in FY 24, Rs. 3.25Cr in FY 25 and Rs. 3.03 in projected FY 26, and the company is hopefull of meeting the current obligations. However, the working capital cycle remains increased, with a conversion cycle of 199 days in FY2024 and 159 days in FY 25. The ISCR and DSCR stood at 4.15x and 3.08x, respectively, in FY 25.

ABOUT THE ENTITY

Deft Organics Ltd. was incorporated in the year 04Jun1997, located in District Bhind, Gwalior (Central India) fully equipped and compliant with the highest industry standards of safety and governance. The name of the company has been changed from HELIOS LIFESCIENCES LIMITED to DEFT ORGANICS LIMITED with effect from the date 09 July 2021. Mr. Sunil Gandhi, Ms. Reeta Gandhi, and Mr. Dhruv Gandhi are the directors of the company. The company is a manufacturer of organic intermediates, Active Pharmaceutical Ingredients (APIs) and finished dosages (Pre-Filled Syringes). The Company offer a wide range of bulk intermediates, APIs, and Parental Preparations especially Pre-Filled Syringes to customers across the globe. Deft offers one of the largest portfolios for APIs and finished dosages, best-in-class products for pharmaceutical development and manufacturing, and a fully integrated service organization to support even Contract Manufacturing also. Harnessing deep expertise and research in Chemistry, Deft Organics serve a variety of industry segments with Intermediates for API, Agrochemicals, Nutraceuticals and more.

KEY COVENANTS OF THE FACILITY RATED

The terms of sanction of the rated facilities include standard covenants normally stipulated for such facilities.

STATUS OF NON-COOPERATION WITH PREVIOUS CRA

Not Applicable

ANY OTHER INFORMATION

Nil

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	45.31	BWR BB+/Stable (Assignment)	NA	NA	NA	NA	NA	NA
FB SubLimit	LT	(3.00)	BWR BB+/Stable (Assignment)	NA	NA	NA	NA	NA	NA
		(6.50)	BWR BB+/Stable (Assignment)	NA	NA	NA	NA	NA	NA
Non Fund Based	ST	12.68	BWR A4+ (Assignment)	NA	NA	NA	NA	NA	NA
NFB SubLimit	ST	(6.00)	BWR A4+ (Assignment)	NA	NA	NA	NA	NA	NA
Grand Total		57.99	(Rupees Fifty Seven Crores and Ninety Nine lakhs Only)

Hyperlink/Reference to applicable Criteria

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

Analytical Contacts
Sneha S Khapare Rating Analyst sneha.k@brickworkratings.com	Nagaraj K Director - Ratings Board : +91 80 4040 9940 nagaraj.ks@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	HDFC Bank	Letter of Credit - Sanctioned	_	2.50	2.50	Simple##
2	HDFC Bank	Letter of Credit - Sanctioned	_	3.00	3.00	Simple##
3	HDFC Bank	Letter of Credit - Sanctioned	_	6.50	6.50	Simple##
4	HDFC Bank	Adhoc Facilities FB (CC/TL/OD) - Sanctioned	_	0.68	0.68	Simple##
5	HDFC Bank	Working Capital Demand Loan - Sanctioned	2.00	_	2.00	Simple##
6	HDFC Bank	GECL - Sanctioned	1.10	_	1.10	Simple##
	Sub-Limit (Working Capital Term Loan) - Sanctioned	(3.00)
	Sub-Limit (Working Capital Term Loan) - Sanctioned	(6.50)
7	HDFC Bank	GECL - Out-standing	0.86	_	0.86	Simple##
8	HDFC Bank	Working Capital Term Loan - Out-standing	0.46	_	0.46	Simple##
9	HDFC Bank	Cash Credit - Sanctioned	7.00	_	7.00	Simple##
	Sub-Limit (Letter Of Credit) - Sanctioned		(6.00)
10	ICICI Bank	Dropline OD - Out-standing	3.89	_	3.89	Simple##
11	State Bank Of India (SBI)	Term Loan - Sanctioned	30.00	_	30.00	Simple##
Total			45.31	12.68	57.99
TOTAL (Rupees Fifty Seven Crores and Ninety Nine 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.