Advance Cropcare (India) Pvt. Ltd.

Brickwork Ratings assigns the ratings for the Bank Loan Facilities of Rs. 40.00 Crs. of Advance Cropcare (India) Pvt. Ltd.

Particulars

Facilities**	Amount(Rs.Crs.)	Tenure	Rating#
Fund Based	35.00	Long Term	BWR BBB - /Stable Assignment
Non Fund Based	5.00	Short Term	BWR A3 Assignment
Grand Total	40.00	(Rupees Forty Crores 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

BWR has assigned the long-term rating of BWR BBB-/Stable and the short-term rating of BWR A3 to the bank loan facilities aggregating to Rs.40.00 crore of Advance Cropcare (India) Pvt. Ltd., considering the criteria of consolidation for assessment. In this case, the same has been considered on a consolidated basis with Varun Fertilizers Pvt. Ltd.

The rating draws strength from the extensive experience of the promoters in the fertilizer and crop-care industry, the Group’s demonstrated improvement in scale of operations, comfortable consolidated capital structure, and adequate consolidated liquidity profile. The Group has benefited from an expanding presence in government-led agricultural supply programs and established relationships with state and central government agencies, which support revenue visibility. However, the rating is constrained by the highly working-capital-intensive nature of operations, reflected in elevated inventory requirements and a stretched cash conversion cycle, resulting in continued reliance on short-term borrowings. The credit profile is further moderated by moderate consolidated debt protection metrics and exposure of profitability to raw material price volatility, coupled with limited pricing flexibility in a competitive, commodity-oriented market.

The ‘Stable’ outlook indicates a low likelihood of rating change over the medium term. BWR believes that the Group’s business and financial risk profile will be maintained over the medium term. The outlook may be revised to Positive if the Group achieves a sustained improvement in scale of operations, along with higher-than-envisaged profitability, leading to a strengthening of the consolidated financial risk profile and improved debt protection metrics, including a sustained improvement in DSCR. Conversely, the outlook may be revised to Negative if there is lower-than-expected consolidated revenue or profitability, or a deterioration in consolidated DSCR, particularly arising from pressure on working capital management or higher leverage.

For assigning the rating, BWR has relied upon the last three years of consolidated audited financial statements up to FY25, the projected financials for FY26 and FY27, and information and clarifications provided by the management, along with publicly available information.

KEY RATING DRIVERS

Credit Strengths:

• Experienced Promoters :

  The Group is promoted by Mr. Ashish Tiwari and Mr. Abhishek Tiwari, who together have over two decades of experience in the fertilizer and crop-care industry, encompassing product sourcing, formulation, regulatory compliance, dealer network management, and working-capital–intensive operations. Their long-standing presence in the agro-input segment has enabled the company to build strong relationships with suppliers, distributors, and institutional customers, while effectively navigating seasonality, price volatility, and policy-driven demand cycles. The promoters have also demonstrated financial flexibility and commitment to the business through timely equity infusion and unsecured loans treated as quasi-equity, supporting growth and liquidity, which is reflected in the improving scale and profitability of operations.

• Improving Scale of Operations and Strengthening Profitability :

  The Group has demonstrated a consistent improvement in scale of operations, with total operating income increasing to Rs.100.44 crore in FY25 from Rs.88.42 crore in FY24, and further supported by robust consolidated sales of about Rs.107 crore achieved in 9M FY26, providing strong visibility for achieving the projected consolidated revenue in FY26. The increase in scale, coupled with improved capacity utilization and operating efficiencies, has resulted in strengthening of profitability, with consolidated EBITDA increasing to Rs.6.42 crore in FY25 from Rs.5.97 crore in FY24, while margins remained stable at around 6–7%. Profitability is expected to improve further in FY26, with consolidated EBITDA projected at Rs.14.32 crore (margin ~8.3%), supported by operating leverage, improved product mix, and better absorption of fixed costs at the group level.

• Comfortable Capital Structure :

  On a consolidated basis, the company’s capital structure remains comfortable, supported by a strengthened tangible net worth of Rs.32.06 crore as on 31 March 2025 (FY24: Rs.25.62 crore), driven by profit accretion and promoter-backed quasi-equity infusion. This has resulted in an improvement in leverage, with Total Debt/TNW moderating to 1.22x in FY25, indicating adequate capitalization and providing financial flexibility to support growth, despite continued reliance on working-capital borrowings inherent to the business.

Credit Risks:

• Working-capital-intensive operations :

  The business remains highly working-capital intensive, with a consolidated cash conversion cycle of ~136 days in FY25, resulting in continued reliance on short-term borrowings.

• Moderate debt coverage in FY25 :

  Consolidated Debt protection metrics were moderate in FY25 with DSCR at ~1.14x, though improvement is expected from FY26 onwards with higher cash accruals.

• Commodity-linked pricing :

  Profitability remains exposed to raw-material price volatility and limited pricing flexibility in a competitive, commodity-oriented market.

ANALYTICAL APPROACH - Consolidated

To arrive at the rating, Brickwork Ratings (BWR) has adopted a consolidated approach by considering the financials of Varun Fertilizers Pvt. Ltd. and Advance Cropcare (India) Pvt. Ltd. together, factoring in common promoters and unified management control, strong operational and financial linkages, liquidity and working capital are managed at the group level, supported by promoter funding, unsecured loans/quasi-equity, and internal accruals deployed across entities, the entities operate from the same location, share infrastructure and resources, and function in closely linked segments of the agro-input value chain, indicating strong operational integration and the presence of cross-default arrangements between Varun Fertilizers Pvt. Ltd. and Advance Cropcare (India) Pvt. Ltd., which makes the credit risk inseparable at the group level.

BWR has applied its rating methodology as detailed in the Rating Criteria detailed below (hyperlinks provided at the end of this rationale).

RATING SENSITIVITIES

Going forward, the ability of the group to improve its consolidated scale of operations, sustain higher profitability margins, strengthen its overall consolidated credit risk profile, and efficiently manage consolidated working-capital requirements will remain the key rating sensitivities.

Positive Triggers:

• A significant improvement in consolidated scale of operations, with consolidated total operating income exceeding Rs.250.00 crore, sustained for the next 2 years.
• Strengthening of the consolidated credit profile, led by consolidated tangible net worth exceeding Rs.75.00 crore, along with improved consolidated debt protection metrics, with DSCR consistently above 1.50x, while strengthening of consolidated capital structure, with Total Debt/TNW reducing below 1.0x, indicating lower leverage dependence and improved financial flexibility.

Negative Triggers:

• A Rating downgrade may be triggered by an inability to achieve the consolidated projected revenue and profit growth, with consolidated operating margins dropping below 5% and a decline in consolidated DSCR below 1x for an extended period would signal stress in debt repayment capacity. 
• Stretch in consolidated working-capital cycle beyond 150 days, resulting in the consolidated current ratio falling below 1.3x or increased reliance on short-term borrowings.
• A Rating downgrade may be triggered if any adverse developments occur at the group level, including the removal of existing cross-default in the new sanction letter, which could reduce group-level financial support and increase consolidated credit risk.

LIQUIDITY INDICATORS - Adequate

Liquidity at the consolidated level is adequate, supported by moderate internal cash accruals and continued promoter support. Consolidated net cash accruals for FY25 stood at about Rs.2.68 crore against CPLTD of around Rs.1.80 crore. The debt servicing is supported through the availability of unencumbered fixed deposits and cash balances of about Rs.1.33 crore, providing a further liquidity cushion. The company is expected to generate cash accruals of around Rs.8.03 crore in FY26, which is sufficient to cover the projected consolidated CPLTD of about Rs.3.00 crore, reflecting improving debt-servicing capability. The consolidated current ratio remained adequate at 1.59 times in FY25 and is projected to remain at a similar level in FY26. Further comfort is derived from the strengthened consolidated net worth, including quasi-equity support from promoters, which provides financial flexibility. However, the liquidity profile remains partly constrained by high reliance on working-capital borrowings, as reflected in elevated short-term debt and a stretched working-capital cycle, resulting in continued dependence on bank limits to support operations, with average utilization levels remaining high.

ABOUT THE ENTITY

Advance Cropcare (India) Pvt. Ltd. (ACPL) was incorporated in 2007 and commenced its commercial operations in 2009. The company is engaged in the manufacturing of a wide range of agro-input products including agro-chemicals, pesticides, insecticides, fungicides, herbicides, micronutrients and bio-fertilizers, catering to the domestic agricultural market.

ACPL is promoted by Mr. Ashish Tiwari and Mr. Abhishek Tiwari, who have been associated with the company since its inception and are actively involved in its day-to-day operations and strategic decision-making.

The company operates three manufacturing facilities, with two units located in Madhya Pradesh. The geographically diversified manufacturing presence supports operational flexibility, better market reach, and mitigates location-specific risks.

In 2011, the group expanded its operations by acquiring Varun Fertilizer Pvt Ltd (VFPL) (incorporated on 31.05.2005), with the objective of strengthening its presence in the fertilizer segment.  The company is engaged in the manufacturing of fertilizers, including chemical fertilizers such as urea and DAP, nitrogen-phosphorus-potassium (NPK), single super phosphate, Micronutrients, Bio Fertilizers along with organic and mixed fertilizers, catering to the domestic agricultural market.

ESG Profile

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

Environmental: Environmental risks are driven by high water usage, waste generation, and reliance on energy-intensive processes, making disclosures on water consumption, waste-management practices, renewable energy share, and emissions levels particularly important.

Social: Social factors hinge on adherence to labour laws, accident prevention frameworks, and human-capital development, with metrics such as workforce mix, safety performance , and training initiatives offering insights into operational resilience.

Governance: Governance assessment focuses on board independence, committee effectiveness, and robustness of compliance systems, supported by readily available disclosures on board structure, audit mechanisms, and risk-management practices.

KEY FINANCIAL INDICATORS (Standalone)

Key Parameters	Units	FY 22 - 23 (Audited)	FY 23 - 24 (Audited)	FY 24 - 25 (Audited)
Operating Revenue	Rs.Crs.	56.76	51.24	61.13
EBITDA	Rs.Crs.	4.24	4.02	4.28
PAT	Rs.Crs.	0.67	0.69	0.85
Tangible Net Worth	Rs.Crs.	14.05	14.74	15.45
Total Debt / Tangible Net Worth	Times	2.00	1.72	1.73
Current Ratio	Times	1.22	1.51	1.56

KEY FINANCIAL INDICATORS (Consolidated)

Key Parameters	Units	FY 22 - 23 (Audited)	FY 23 - 24 (Audited)	FY 24 - 25 (Audited)
Operating Revenue	Rs.Crs.	93.67	88.42	100.44
EBITDA	Rs.Crs.	5.63	5.97	6.42
PAT	Rs.Crs.	0.95	1.10	1.49
Tangible Net Worth	Rs.Crs.	24.53	25.62	32.06
Total Debt / Tangible Net Worth	Times	1.60	1.53	1.22
Current Ratio	Times	1.25	1.49	1.59

KEY COVENANTS OF THE FACILITY RATED

The terms of sanction include standard covenants normally stipulated 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	35.00	BWR BBB-/Stable (Assignment)	NA	NA	NA	NA	NA	NA
Non Fund Based	ST	5.00	BWR A3 (Assignment)	NA	NA	NA	NA	NA	NA
Grand Total		40.00	(Rupees Forty Crores Only)

Hyperlink/Reference to applicable Criteria

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

Analytical Contacts
Chinmaya R Rating Analyst chinmaya.r@brickworkratings.com	Nitika Srivastava Associate Director Ratings nitika.s@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	ICICI Bank	Working Capital Term Loan - Out-standing	0.28	_	0.28	Simple##
2	ICICI Bank	Cash Credit - Sanctioned	11.00	_	11.00	Simple##
3	ICICI Bank	Cash Credit - Proposed	21.14	_	21.14	Simple##
4	ICICI Bank	Bank Guarantee - Sanctioned	_	2.00	2.00	Simple##
5	ICICI Bank	Letter of Credit - Sanctioned	_	3.00	3.00	Simple##
6	ICICI Bank	Dropdown OD - Out-standing	2.58	_	2.58	Simple##
Total			35.00	5.00	40.00
TOTAL (Rupees Forty Crores 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.