Pannalal Exports Pvt. Ltd.

Brickwork Ratings assigns the ratings for the Bank Loan Facilities of Rs. 76.00 Crs. of Pannalal Exports Pvt. Ltd.

Particulars

Facilities**	Amount(Rs.Crs.)	Tenure	Rating#
Fund Based	25.00	Long Term	BWR BBB /Stable Assignment
	51.00	Short Term	BWR A3 + Assignment
	(35.00)
Grand Total	76.00	(Rupees Seventy Six 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

Brickwork Ratings has assigned a long-term rating of BWR BBB/Stable and a short-term rating of BWR A3+ to the bank loan facilities of Pannalal Exports Private Limited, aggregating to Rs. 76.00 crore.

The rating is primarily constrained by the company’s thin profitability margins, inherent to the high-volume trading nature of agricultural commodities, reflecting intense competition in a highly fragmented industry. The company remains vulnerable to regional geopolitical risks due to its historical dependence on exports to Bangladesh and is also exposed to commodity price and climatic volatility.

The rating derives strength from the promoters’ extensive experience and established track record in the agricultural trade industry. Despite a revenue dip in FY25 due to global pricing pressures, the company has demonstrated a strong recovery in FY26, achieving a turnover of approximately Rs. 1,100 crore. The rating also factors in the company’s ongoing revenue diversification towards the domestic market, with domestic sales contributing over 50% of total turnover as of 2026. Furthermore, the company benefits from its locational advantage at Hili, a strategic international trade corridor to Bangladesh.

The Stable Outlook reflects Brickwork Ratings’ expectation that the company’s business and financial risk profile will remain steady over the medium term, supported by improving operational efficiency and stable demand conditions.

The rating is based on the audited financial statements for FY23, FY24, and FY25, provisional financials for FY26, and projected financials for FY27 and FY28, along with publicly available information and management clarifications.

 

KEY RATING DRIVERS

Credit Strengths:

• Experienced Management and Long Operational Track Record :

  The company benefits from the extensive experience of its promoters, Mr. Sawarmal Agarwal and Mr. Ritesh Agarwal, who have a long-standing presence in the agricultural commodities trading industry. This deep expertise helps in managing market cycles and maintaining strong relationships with both suppliers and institutional customers.

• Strategic Revenue Diversification into the Domestic Market :

  The company is successfully pivoting away from a heavy reliance on exports. Domestic sales are projected to grow to over 50% in FY27, supported by new supplier registrations with large corporates like Adani and Patanjali for oil trading. This shift provides more stable revenue streams and reduces exposure to international trade uncertainties.

• Strategic Locational Advantage :

  The company’s warehouse facilities, particularly the 4,000 MT unit in Hili, provide a competitive edge for exports to Bangladesh. Hili is a major international trade corridor, allowing the company to manage logistics and inventory moisture control effectively before cross-border transit.

Credit Risks:

• Susceptibility to Regional Geopolitical and Regulatory Risks :

  A significant portion of the company's business remains tied to the Bangladesh market. This exposes the entity to risks such as political instability, changes in import regulations, and currency volatility in the neighboring region.

• Fragmented Industry with Intense Competition :

  The agricultural trading sector is highly fragmented with low entry barriers. The company faces intense competition from numerous small and large players, which limits its pricing power and results in thin operating margins, typically ranging between 0.78% and 1.27%.

• Exposure to Volatility in Commodity Prices and Climatic Conditions :

  Profitability is sensitive to fluctuations in the prices of raw materials like maize, wheat, and soya seeds. These prices are often influenced by climatic conditions, such as uneven monsoons, and government interventions in the agricultural sector.

ANALYTICAL APPROACH - Standalone

For arriving at its ratings, BWR has considered the standalone performance of Pannalal Exports Pvt. Ltd. BWR has applied its rating methodology as detailed in the Rating Criteria.

RATING SENSITIVITIES

Going forward, the ability of the company to improve its revenue and financial risk profile would remain the key rating sensitivities. 

Positive: 

• Increase in total operating income by around Rs. 100 crore over FY26 levels, along with an improvement in Net Profit Margin above 1.2%.
• Improvement in gearing and strengthening of debt protection metrics.

Negative:

• Decline in revenue by more than 25% from the FY26 levels, with PAT margin falling below 0.55%.
• Weakening of liquidity and deterioration in gearing.

LIQUIDITY INDICATORS - Adequate

The liquidity position of Pannalal Exports Private Limited remains adequate, supported by positive cash accruals and a sufficient cushion in working capital facilities. The company reported a cash and bank balance of Rs. 15.74 crore as of March 31, 2025. The current ratio was 1.22x in FY25; however, when considering the liquid nature of Rs. 1.04 crore invested in mutual funds, the adjusted current ratio improves to 1.23x. The company has no long-term debt by way of term loans. Long-term debt consists only of unsecured loans from promoters, which are subordinated to bank debt, resulting in no Current Maturities of Long-Term Debt (CPLTD), and Net cash accruals stood at Rs. 3.49 crore in FY25, providing a healthy buffer for operations. Debt servicing metrics remain comfortable, with an Interest Service Coverage Ratio (ISCR) of 2.37x and a Debt Service Coverage Ratio (DSCR) of 2.08x in FY25. Working capital limits remain moderately utilized, with average utilization at approximately 76% with Union Bank of India.

ABOUT THE ENTITY

Pannalal Exports Private Limited was incorporated on March 27, 2019, and is headquartered in Kolkata, West Bengal. The company is promoted and managed by Mr. Sawarmal Agarwala and Mr. Ritesh Agarwala.

The company is primarily engaged in trading and merchant export activities. It functions as a wholesaler and distributor of agricultural commodities and related products.

Its product portfolio includes food grains and cereals such as maize, wheat, and pulses; rice (parboiled, semi-milled, and wholly milled); and agricultural by-products used in animal feed, including de-oiled rice bran (DORB), mustard oil cake, soybean DOC, rapeseed, and wheat bran. The company also trades in spices and seeds, such as turmeric and cumin.

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 23 - 24 (Audited - Annual)	FY 24 - 25 (Audited - Annual)	FY 25 - 26 (Provisional - Annual)
Operating Revenue	Rs.Crs.	816.41	598.91	1111.78
EBITDA	Rs.Crs.	6.40	7.60	14.77
PAT	Rs.Crs.	4.73	3.18	11.82
Tangible Net Worth	Rs.Crs.	36.24	39.41	51.23
Total Debt / Tangible Net Worth	Times	1.72	1.41	1.47
Current Ratio	Times	1.27	1.22	1.43

KEY COVENANTS OF THE FACILITY RATED

Union Bank of India:

• Maintenance of quasi-equity: Unsecured loans from promoters and related parties, classified as quasi-equity, shall remain interest-free and are not permitted to be withdrawn or repaid during the tenure of the bank facilities.
• The terms of sanction include standard covenants normally stipulated for such facilities.

Federal Bank: 

• The lender has stipulated covenants to mitigate export and foreign exchange risks, including mandatory hedging of currency exposure, timely settlement of MTM losses, and requirement of ECGC coverage for receivables. Further, extension of export credit is restricted in cases where buyer payments remain overdue.
• 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	25.00	BWR BBB/Stable (Assignment)	NA	NA	NA	NA	NA	NA
Fund Based	ST	51.00	BWR A3+ (Assignment)	NA	NA	NA	NA	NA	NA
FB SubLimit	ST	(35.00)	BWR A3+ (Assignment)	NA	NA	NA	NA	NA	NA
Grand Total		76.00	(Rupees Seventy Six Crores Only)

Hyperlink/Reference to applicable Criteria

• General Criteria
• Short Term Debt
• Approach to Financial Ratios
• Trading Companies

Analytical Contacts
Pradnya Tolanavar Ratings Analyst pradnya.t@brickworkratings.com	Sabitha M Nayak Associate Director-Ratings sabitha.nayak@brickworkratings.com
Media Contact | media@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	Federal Bank	Foreign Bill Discounting - Sanctioned	_	51.00	51.00	Simple##
	Sub-Limit (EBRD-1 (Sublimit of Foreign Bill Discounting)) - Sanctioned		(35.00)
2	Union Bank of India	Cash Credit - Sanctioned	25.00	_	25.00	Simple##
Total			25.00	51.00	76.00
TOTAL (Rupees Seventy Six 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.