Sri Bhagirath Textiles Ltd

Brickwork Ratings assigns the ratings for the Bank Loan Facilities of Rs. 80.48 Crs. of Sri Bhagirath Textiles Ltd

Particulars

Facilities**	Amount(Rs.Crs.)	Tenure	Rating#
Fund Based	73.48	Long Term	BWR A - /Stable Assignment
	(4.50)
Non Fund Based	7.00	Short Term	BWR A2 Assignment
	(7.00)
	(2.90)
Grand Total	80.48	(Rupees Eighty Crores and Forty Eight 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 (BWR) assigns the bank loan rating of BWR A-/Stable/BWR A2 for a debt size of Rs. 80.48 Crores to of Sri Bhagirath Textiles Ltd. (hereinafter referred as ‘SBTL’ or the ‘Company’).

The rating factors consistent improvement in the company's scale of operations over the past years backed by successful absorption of its expanded capacity. The rating takes into account a moderately leveraged capital structure reflected in debt-funded capex and stressed debt service coverage ratio marked by modest and stable operating margins. However, the financial risk profile draws comfort with no further debt-funded capex planned in near to medium term, allowing for the full stabilisation of previous expansions. The rating, however, remains constrained by the inherent cyclicality of the textile industry, the vulnerability to its profitability by fluctuations in raw material prices (e.g., cotton) and competition from other domestic and international suppliers, along with high customer and geographical concentration risks. The rating draws comfort from the experienced promoters with a longstanding existence of more than three decades in the textile industry. The rating continues to factor in the ample liquidity and efficient management of the working capital cycle, characterised by strong cash accruals and undrawn bank limits, providing a sufficient cushion to maintain a stable credit profile in the medium term.

 

KEY RATING DRIVERS

Credit Strengths:

• Experienced management with established track record of operations :

  SBTL is a flagship company of Shri Bhagirath Rander Group. The company was incorporated in the year 1991 by Mr. Ramesh Rander. The promoters possess a proven track record of over three decades in the textile and trading sectors, having commenced trading in 1992 and diversified into manufacturing in 1995. The company benefits significantly from vertical integration and operational synergies with sister concerns such as Shrigopal Rameshkumar (handling independent cotton trading and ginning), which structurally secures its backward supply chain and procurement ecosystem. SBTL has developed healthy relations with its customers which facilitate in securing repeated orders from them.

   

• Efficient Working Capital Management :

  SBTL demonstrates efficient working capital management, characterised by Cash Conversion Cycle between 46–55 days in the past three fiscal years and with average days receivable of 30-35 days. The Current Ratio has shown consistent improvement, rising from 1.24x in FY23 to 1.34x in FY25, and is projected to reach 1.47x by FY28. The Quick Ratio hovers around 0.74x to 0.80x, which is standard for the textile manufacturing sector where raw cotton and yarn inventory constitute the bulk of current assets. Going further, the working capital operations of the company are expected to remain at the same level, as evident from the modest inventory period of 54-56 days and an efficient collection mechanism. The company's working capital is well positioned to absorb sudden raw-material price shocks or short-term supply chain disruptions.

• Improved operating efficiency and Future visibility :

  The company's revenue portfolio is a mix of manufacturing of yarn & fabrics and trading of cotton bales & yarn. Since 2023, the company has consistently invested in debt-funded capex and increased its capacity utilisation to 92% in FY25 (81% in FY24) and 95% in 9MFY26. The increased volume and better realisation led to significant growth in revenue and profitability over the last couple of years. The company reported a total operating income of Rs. 860.68 Crores in FY25 (FY24: Rs. 674.62 crores) and on a provisional basis, achieved Rs. 863.53 crores for the period ending on 31st December, 2025. The operating profit margins remained at  7.87% in FY25 (FY24:  8.79%) and 7.25% in 9MFY26. 

Credit Risks:

• High Customer and Supplier Concentration Risk :

  The majority of the SBTL's revenue ~ 41% exhibits a customer concentration from the top 3 customers. On the procurement side, the company is highly dependent on The Cotton Corporation of India (CCI), which accounted for ~30% of the total procurement volume. The risk is partially mitigated by long-standing relationships for more than 25 years, hence, any disruption in these key accounts could severely impact raw material availability and operations.

• Susceptibility to Raw Material Price Volatility and Agro-Climatic Risks :

  Given that raw cotton and traded goods constitute over 80% of operating income, profitability is highly vulnerable to adverse movements in domestic cotton prices. Because cotton is an agricultural commodity, its availability and pricing are heavily dictated by agro-climatic conditions (monsoons, pest attacks) and government policies like Minimum Support Price (MSP) revisions. The fragmented nature of the spinning industry restricts the company's ability to fully pass on sudden cost spikes to end consumers.

• Highly Leveraged Capital Structure :

  The company has a moderate capital structure marked by gearing of 2.22x in FY25 (FY24: 2.49x). Furthermore, the Total Outside Liabilities to Tangible Net Worth (TOL/TNW) ratio stood elevated at 2.83x in FY25, (FY24: 3.12x), reflecting increased borrowings due to debt-funded capex and trade payables to fund its expanded scale. While subordinated unsecured loans from promoters provide a quasi-equity cushion, the company needs to strictly meet its projected cash accruals to deleverage effectively. With subdued operating margins, the debt service cover remained at 1x in FY25 (FY24: 1.06x). With no major capex planned in the medium term, overall gearing and debt cover are expected to improve in the coming years.

ANALYTICAL APPROACH - Standalone

For arriving at the assigned ratings, BWR has applied its established rating methodologies, as detailed in the applicable Rating Criteria. (Hyperlinks to the detailed criteria are provided at the end of this rationale.)

RATING SENSITIVITIES

Positive 

The rating may be upgraded if there is sustained improvement in scale of operations, along with maintenance of  TOL/TNW below 1.5x 

Negative 

The rating may be downgraded if there is significant debt-funded capex and elongation of the working capital cycle, resulting in TOL/TNW above 3.5x, or weakening in coverage indicators (DSCR below 1x).

LIQUIDITY INDICATORS - Adequate

The liquidity position is supported by sufficient cash accruals of Rs. 38.09 crore in FY2025 against current bank loan repayments of Rs. 36.08 crore. The Cash and bank balances were Rs 2.37 crore as on March 31, 2025, out of which Rs 0.17 crores were encumbered with banks, respectively, and average fund based working capital utilization over the past 13 months ending March 2026 stood at around 70%. Recently, the company has been sanctioned additional Cash Credit (CC) limits. This undrawn working capital limits eases short-term liquidity pressures and supports increased operational scale. The current ratio between 1.3x to 1.4x indicates company has adequate liquidity. Liquidity is further supported by unsecured loans of around Rs. 82 crores from directors and other corporates.

 

ABOUT THE ENTITY

Sri Bhagirath Textiles Ltd was incorporated on February 27, 1991. SBTL, a closely held family owned company, commenced its operation in 1991 by venturing in cotton trading. Primary business activity of SBTL is the manufacturing and sale of cotton/blended yarn. SBTL manufactures ring spun cotton yarn, blended yarn ,100% viscose single and double yarn in the count range of 12 to 60s, and also Fabrics. SBTL is also engaged in the trading of cotton bales and yarn. SBTL is the flagship company of Nagpur-based SB Rander group. The group has its presence in diversified business activities, including ginning, cotton trading, quarries, marbles and infrastructure. SBTL operates at an installed capacity of 95,000 spindles and an annual production capability of 25,000 to 30,000 tons.

ESG Profile

The company demonstrates a Adequate ESG profile based on its environmental, social, and governance practices.

Environmental - Environmental risks are inherently lower as the company operates purely as a spinning, twisting, and knitting unit with no dyeing or processing facilities. There is no hazardous waste generation in factory. Consequently, the operations do not involve water-intensive processes and do not require an Effluent Treatment Plant (ETP) license. The company maintains compliance through a Maharashtra pollution control board license, focusing on the dry conversion of raw cotton to thread and fabric. Disclosure on waste-management practices is centered on cotton-dust control and scrap recycling, they are not performing on-site waste burning or uncontrolled waste land filling. Operational sustainability is further evidenced by a robust monitoring system under GOTS audit standards, with verified test reports (Dec 2023) for Ambient Air, Ambient Noise, Workplace Air, and Workplace Noise Monitoring, ensuring a controlled and compliant factory environment.

Social -  The company manages a significant workforce of 830 employees . The company invests heavily in safety performance and continuous training initiatives, which enhance operational resilience. The facility strictly adheres to international labor standards, maintaining a minimum age policy of 18 and prohibiting forced or bonded labor. Workers' rights are protected through the Shri Bhagirath Textiles Kamgar Union and active committees for Health & Safety, Canteen, and Workers' welfare. The company demonstrates strong commitment to social security through the consistent maintenance of employee welfare schemes, Provident Fund (PF), ESIC, and comprehensive insurance coverage. Operational safety is supported by a Building Stability Certificate, potable water testing, and regular training in Fire Safety, First Aid, and PPE usage. Communication remains transparent through appointment letters, displayed policies, and accessible confidential suggestion boxes..

Governance - The governance framework focuses on board independence, committee effectiveness, and the robustness of compliance systems. SBTL maintains a structured board with clear oversight of audit mechanisms and risk-management practices. The company provides transparent disclosures regarding its organizational structure and internal controls. Bolstered by a long-standing promoter track record, the governance remains centered on long-term value creation and maintaining high ethical standards in global trade and financial reporting.

KEY FINANCIAL INDICATORS (Standalone)

Key Parameters	Units	FY 23 - 24 (Audited - Annual)	FY 24 - 25 (Audited - Annual)	FY 25 - 26 (Provisional - Others(9MFY26 (dec 2025)))
Operating Revenue	Rs.Crs.	674.61	860.68	863.53
EBITDA	Rs.Crs.	59.33	67.77	63.64
PAT	Rs.Crs.	19.64	15.68	18.67
Tangible Net Worth	Rs.Crs.	131.61	147.20	165.87
Total Debt / Tangible Net Worth	Times	2.49	2.22	Not Available
Current Ratio	Times	1.28	1.34	1.30

KEY COVENANTS OF THE FACILITY RATED

The sanction terms governing the banking facilities include standard financial and non-financial covenants, which are customary for facilities of this nature.

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	73.48	BWR A-/Stable (Assignment)	NA	NA	NA	NA	NA	NA
FB SubLimit	LT	(4.50)	BWR A-/Stable (Assignment)	NA	NA	NA	NA	NA	NA
Non Fund Based	ST	7.00	BWR A2 (Assignment)	NA	NA	NA	NA	NA	NA
NFB SubLimit	ST	(7.00)	BWR A2 (Assignment)	NA	NA	NA	NA	NA	NA
		(2.90)	BWR A2 (Assignment)	NA	NA	NA	NA	NA	NA
Grand Total		80.48	(Rupees Eighty Crores and Forty Eight lakhs Only)

Hyperlink/Reference to applicable Criteria

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

Analytical Contacts
Muskan Jain Ratings Analyst muskan.j@brickworkratings.com	Niraj Kumar Rathi Senior Director Ratings niraj.r@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	State Bank Of India (SBI)	Term Loan - Out-standing	18.50	_	18.50	Simple##
2	State Bank Of India (SBI)	Cash Credit - Sanctioned	50.00	_	50.00	Simple##
3	State Bank Of India (SBI)	Bank Guarantee - Sanctioned	_	7.00	7.00	Simple##
4	State Bank Of India (SBI)	GECL 2.0 - Out-standing	4.98	_	4.98	Simple##
5	State Bank Of India (SBI)		_	_	0.00	Simple##
	Sub-Limit ((Sub-limit of Cash Credit) EPC/ EBD/ PCFC ) - Sanctioned	(4.50)
6	State Bank Of India (SBI)		_	_	0.00	Simple##
	Sub-Limit (Letter of Credit (Sublimit of BG)) - Sanctioned		(7.00)
7	State Bank Of India (SBI)		_	_	0.00	Simple##
	Sub-Limit (Derivatives/forward contract/CEL (Sublimit of BG)) - Sanctioned		(2.90)
Total			73.48	7.00	80.48
TOTAL (Rupees Eighty Crores and Forty Eight 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.