Chendhoor Murughan Yarn Tex India Pvt. Ltd.

Brickwork Ratings assigns the long-term and short-term ratings to BWR BBB/Stable and BWR A3 for the Bank Loan Facilities of Rs. 133.46 Crs. of Chendhoor Murughan Yarn Tex India Pvt. Ltd.

Particulars

Facilities**	Amount(Rs.Crs.)	Tenure	Rating#
Fund Based	123.46	Long Term	BWR BBB /Stable Assignment
Non Fund Based	10.00	Short Term	BWR A3 Assignment
Grand Total	133.46	(Rupees One Hundred Thirty Three Crores and Forty Six 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 the long-term and short-term ratings of BWR BBB/Stable and BWR A3 for the bank loan facilities of Rs. 133.46 Crores of  Chendhoor Murughan Yarn Tex India Pvt. Ltd

The ratings assigned to the bank facilities of Chendhoor Murughan Yarn Tex India Pvt. Ltd . continue to derive strength from its improving track record of operations and the extensive experience of the company, who have been managing the company for more than a decade. The rating also factors in the growing scale of operations and profitability, a healthy financial risk profile, and an adequate liquidity position. The assessment is based on the audited financial statements of FY 2023, FY 2024, and FY 2025.

The rating outlook has been assigned as "Stable" as BWR believes that Chendhoor Murughan Yarn Tex India Pvt. Ltd. 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:

• Locational Advantage :

  The company is located in Namakkal cluster and thus has a competitive advantage in terms of skilled labor, logistics, production knowledge and vendors making the company more efficient and cost effective.

• Extensive industry experience of the promoters: :

  The promoters bring over 50 years of experience in the spinning industry, including prior association with Motis Spinners Private Limited. Their extensive knowledge supports robust operational and strategic decision-making, contributing to consistent business growth. Internal systems and operational processes have been strengthened over time, and continued focus on building a professional management team and succession planning will further enhance operational stability and long-term sustainability.

Credit Risks:

• Competition in the Industry :

  Entry barriers in the industry are low on account of limited capital and technology requirement and also low differentiation in the end product leading to intense competition and limiting the pricing power resulting in low profitability

• Industry cyclicality and market risks: :

  The spinning industry is cyclical and depends heavily on demand and supply conditions, both domestically and globally. Export demand, government regulations, or fluctuations in raw material prices can lead to variability in revenue and operating margins.

ANALYTICAL APPROACH - Standalone

For arriving at its ratings, Brickwork Ratings has applied its rating methodology as detailed in the Rating criteria below(hyperlinks provided at the end of this rationale).

RATING SENSITIVITIES

Going forward the Entity’s ability to improve the scale of operations, improve and maintain profitability, the debt servicing capability & liquidity ,competition of e-commerce industry and manage its working capital efficiently will be the key rating sensitivities.

Positive :

• Improvement in Total Operating Income by around 12% to 15%  annually, improvement in Operating Margin by 3 %, leading to steady growth in cash accruals.

• Improvement in the Current Ratio above unity level, while maintaining debt metric ratios such as ISCR ,DSCR and Total debt/TNW at statisifactory level

Negative :

• Any decline in revenue by 15% or more, or Operating Margin falling below 15%, impacting profitability and cash accruals.

• Substantial increase in leverage and current ratio falling below the current levels.

LIQUIDITY INDICATORS - Adequate

The company maintains an adequate liquidity position, supported by steady net cash accruals of Rs. 28.36 crore in FY2024–25, Rs. 33.50 crore in FY2025–26, and Rs. 35.65 crore in FY2026–27, which are sufficient to meet its CPLTD repayments of Rs. 24.75 crore, Rs. 20.68 crore, and Rs. 20.35 crore during the respective years. The current ratio has remained around 1.0x over the past three years due to their on going capex and repayments thereof.Howver the same as propose to improve to 1.06x in FY2025–26 and 1.24x in FY2026–27, reflecting strengthening short-term liquidity. The company’s debt servicing capability remains comfortable, with ISCR expected to improve from 2.80x in FY2024–25 to 3.21x in FY2025–26 and 3.82x in FY2026–27, while DSCR is projected to strengthen from 1.22x to 1.32x and 1.42x over the same period. Although working capital utilization remains high at around 98%, this is mainly due to higher inventory levels and receivables in line with the scale of operations. Further, a tangible net worth of Rs. 70.78 crore in FY2024–25 provides additional financial strength and flexibility to the company.

ABOUT THE ENTITY

Chendhoor Murughan Yarn Tex India Private Limited was established in 2018 and is located at Veppadai, Namakkal District, Tamil Nadu. The company is engaged in the manufacturing of high-quality yarn, catering to diverse customer requirements in the textile industry.

The company is led by a Managing Director with over three decades of experience in both spinning and weaving, bringing strong technical expertise and industry knowledge. Chendhoor Murughan Yarn Tex operates with an installed capacity of 5,800 spindles equipped with 4 Vortex systems, enabling the production of a wide range of yarn varieties tailored to customer quality specifications.

The product portfolio includes yarn made from Viscose, MicroModal, Lenzin  EcoVer , TENCE, Birla Viscose, Cotton, Linen (Flax), and Bamboo, reflecting the company’s focus on versatility and sustainable materials.

The company follows responsible and sustainable manufacturing practices and is certified by OEKO-TEX® Standard 100 and the Better Cotton Initiative (BCI). Demonstrating its commitment to sustainability, approximately 90% of its energy requirements are met through renewable sources, including wind and solar power.

ESG Profile

The company demonstrates a Adequate 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.	192.38	291.56	213.25
EBITDA	Rs.Crs.	26.33	42.36	44.68
PAT	Rs.Crs.	2.37	0.85	10.24
Tangible Net Worth	Rs.Crs.	59.71	60.56	70.78
Total Debt / Tangible Net Worth	Times	2.33	2.83	2.22
Current Ratio	Times	0.93	0.89	4.80

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

Creadit Rating Agency	Status and Reason for Non-Cooparation	Date of Press Release
CRISIL	In the absence of adequate information from the company.	12Jan2026

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	123.46	BWR BBB/Stable (Assignment)	NA	NA	NA	NA	NA	NA
Non Fund Based	ST	10.00	BWR A3 (Assignment)	NA	NA	NA	NA	NA	NA
Grand Total		133.46	(Rupees One Hundred Thirty Three Crores and Forty Six lakhs Only)

Hyperlink/Reference to applicable Criteria

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

Analytical Contacts
Gokul D Rating Analyst gokul.d@brickworkratings.com	Sabitha M Nayak Associate Director-Ratings sabitha.nayak@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	Cash Credit - Sanctioned	11.49	_	11.49	Simple##
2	Canara Bank	GECL - Out-standing	0.23	_	0.23	Simple##
3	Federal Bank	BG/LC/ILC - Sanctioned	_	10.00	10.00	Simple##
4	Federal Bank	Cash Credit - Sanctioned	10.00	_	10.00	Simple##
5	Federal Bank	Term Loan - Out-standing	19.07	_	19.07	Simple##
6	HDFC Bank	Term Loan - Out-standing	0.04	_	0.04	Simple##
7	HDFC Bank	Term Loan - Out-standing	2.80	_	2.80	Simple##
8	HDFC Bank	Term Loan - Out-standing	33.15	_	33.15	Simple##
9	HDFC Bank	Term Loan - Out-standing	0.02	_	0.02	Simple##
10	HDFC Bank	Term Loan - Out-standing	0.09	_	0.09	Simple##
11	HDFC Bank	Term Loan - Out-standing	0.03	_	0.03	Simple##
12	HDFC Bank	Cash Credit - Sanctioned	25.00	_	25.00	Simple##
13	State Bank Of India (SBI)	Term Loan - Out-standing	5.83	_	5.83	Simple##
14	State Bank Of India (SBI)	Term Loan - Out-standing	5.71	_	5.71	Simple##
15	State Bank Of India (SBI)	Cash Credit - Sanctioned	10.00	_	10.00	Simple##
Total			123.46	10.00	133.46
TOTAL (Rupees One Hundred Thirty Three Crores and Forty Six 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.