Rating Rationale

Brickwork Ratings (BWR) assigns the long-term ratings at "BWR BB+"  with a stable outlook for the bank loan facility of  Shripad Shankar Nagarkar.

The rating has factored, inter alia, extensive experience of the promoters along with  Long-Standing Market Presence of the firm. The rating also considers the company’s healthy financial risk profile with healthy debt coverage metrics on as 31 March 2026 (Provisional)  However, the rating is constrained by risks associated with the intense competition from established market players and volatility in raw material prices.

The Stable outlook on the BWR BB+ rating reflects BWR opinion that the financial risk profile of  Shripad Shankar Nagarkar is expected to be maintained over the medium term, given steady revenues backed by loyal customer base across generations and that it will continue to maintain its comfortable capital structure and healthy debt coverage indicators.

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

• Established operational track record and extensive industry experience, supported by experienced Partners :

  The firm, SSN, was established in 1952 and is one of Pune’s leading jewellery brands, with a legacy spanning over 71 years. The firm is known for its creativity, craftsmanship, and innovation, shaped by the experience of two generations.

  Mr. Vasant Shripad Nagarkar brings over 30 years of expertise to the business. Mr. Prasad Vasant Nagarkar has more than 10 years of experience, while Mr. Pushkar Vallabh Nagarkar has around 8 years of experience in the field. The business is managed by these partners, with additional support from Ms. Swati Vallabh Nagarkar and Mrs. Vasanti Vasant Nagarkar, who has been associated with the business for over 20 years.

  The strong experience of the partners supports critical decision-making and ensures the smooth running of the business. The involvement of the younger generation—Mr. Prasad Vasant Nagarkar and Mr. Pushkar Vallabh Nagarkar—as partners also provides comfort with respect to continuity and smooth succession of the firm’s operations in the future.

   

• Healthy financial risk profile with adequate liquidity supported by an improving scale of operations :

  The firm’s total revenue recorded a year-on-year growth of 74% in FY25, increasing to Rs.204.24 crore, and further grew sharply by 129% to Rs. 468.26 crore in FY26(Provisional). The improvement in revenue was driven by higher overall sales of Gold, Diamonds, Silver ornaments and opening of  additional branches supported by a pickup in jewellery demand following the post-COVID revival, particularly due to weddings and other cultural events in India.

  The firm reported an operating margin of  5.21% and a net profit margin of 2.74% in FY26(P). The tangible net worth remains moderate at around Rs.33.75 crore, with a Total Outside Debt to Tangible Net Worth (TOD/TNW) of 2.78 times as of FY26(P).

  The firm’s working capital cycle improved to an optimal level of 60 days in FY26 from 77 days in FY25. Inventory holding period also improved significantly to 125 days in FY26 from 216 days in FY25, supported by timely realization of receivables. Going forward, the company’s ability to further optimize its working capital cycle amid rising order volumes will remain positive.

   

• Susceptibility of operating profitability due to volatility in in Gold and Silver prices, regulatory changes and high working-capital intensity :

  Operating performance across the gems and jewellery industry remains susceptible to volatility in Gold, Silver and other precious metal stones prices, as these metals constitute the primary raw material and cost driver for jewellers. Precious metal prices are inherently volatile due to global economic uncertainty, inflation and interest rate movements, currency fluctuations (particularly the USD–INR exchange rate), central bank policies, geopolitical developments, speculative trading, and changes in government duties and regulations. Such price fluctuations directly affect inventory valuation, working capital requirements, margins and consumer demand. Sharp price increases can strain liquidity and temporarily dampen demand, while sudden price decreases may result in inventory losses and margin compression, leading to variability in earnings and cash flows. Going forward gold and precious metal price volatility will remain a key monitorable.

  Operations in the gems and jewellery industry are inherently capital intensive, as jewellers must invest substantial funds in precious metals and finished jewellery inventory to maintain a wide range of designs and meet seasonal and event-driven demand. This results in high working capital requirements, with a significant portion of funds tied up in inventory. Elevated working capital needs can strain financial liquidity, particularly during periods of rising metal prices, as inventory replenishment costs increase and dependence on bank borrowings rises. Consequently, higher interest costs, pressure on cash flows, and reduced liquidity buffers may emerge, especially if inventory turnover slows or demand weakens. 

• Intense competition from organized and unorganized players and risks associated with geographical concentration and regulatory changes :

  The Indian gems and jewellery industry is largely unorganized and has traditionally been highly fragmented, dominated by family-run businesses and local artisans. However, the share of organized retail has been increasing as consumers increasingly prefer the trust, quality assurance, transparency, and financing options offered by larger branded players over traditional local jewellers. Urban and metropolitan cities, along with affluent consumers, are increasingly opting for branded jewellery for special occasions, supported by mandatory hallmarking norms and greater confidence in product quality.

  While the unorganized segment continues to dominate the industry, it faces increasing pressure from regulatory compliance requirements as well as intensifying competition from organized players. Moreover, unlike some peers with a strong presence in both domestic and international markets, SSN is a regional B2C player, currently operating four retail outlets in Pune and Thane. The firm has to expand its retail presence to additional cities and states, which is expected to support business growth and enhance its market reach.

• Constitution of entity as a partnership concern :

  The firm is a family-owned business and is fully managed by members of the Nagarkar family. As it operates as a partnership firm, any withdrawal of capital by the partners for personal contingencies could adversely impact the firm’s capital structure. Further, the partnership structure limits access to institutional funding, as lenders typically assess creditworthiness based on the individual financial strength of the partners rather than that of the entity. This constraint may reduce financial flexibility, particularly during periods of expansion or financial stress.

  However, the firm’s net worth has been improving in recent years, which partially mitigates these risks. Additionally, the involvement of the younger generation in the business provides comfort with respect to continuity and ensures a smooth succession of the firm’s operations in the future.

Going forward, the firm’s ability to increase its scale of operations, improve profitability and margins, efficiently manage working capital requirements with adequate liquidity, maintain satisfactory debt protection metrics, ensure prudent asset–liability matching, and improve the TOL/TNW ratio, while sustaining sufficient levels of current assets—particularly inventory and receivables—in compliance with bank covenants, will have a positive bearing on and strengthen its overall credit profile. These factors will remain the key rating sensitivities.

Any deterioration in the above-mentioned factors or other adverse developments may negatively impact the firm’s financial risk profile.

Positive Rating Factors:

• The rating outlook may be positive if the company exceeds or achieve its FY27 projected revenue from operations supported by improved profitability with EBITDA margins above 10%.
•  Total Debt/TNW to be under 2x, while DSCR to be maintained at existing levels or better and ISCR to be above 3x.
• The company's business constitution to migrate from Partnership to Private  Limited / Limited entity.

Negative Rating Factors:

• The ratings may be negative if revenue declines by more than 10% YoY due to weaker demand alongside EBITDA margins below 5%.
• A rising debt burden, accompanied by a decline in key ratios such as Total Debt to Tangible Net Worth (TOD/TNW)  deteriorated from current levels, Current Ratio (CR) below 1.00x, Interest Service Coverage Ratio (ISCR) and Debt Service Coverage Ratio (DSCR) falling below 3x and 2x.

The company reported an EBITDA of Rs. 24.42 crore in FY26 (Provisional) and net cash accruals of Rs.15.01 crores, which were sufficient to cover interest and finance charges of Rs.9.39 crores and the current portion of long-term debt (CPLTD) term loan obligations of Rs. 1.50 crores. Additional liquidity comfort is derived from a cash balance of Rs. 2.73 crore, a current ratio of 1.12 times, and an optimal working capital cycle of  60 days in FY26(P), supported by spot receivables. As per the projected financials, the company is expected to report an EBITDA of Rs. 44.91 crores. in FY2027 and Rs. 57.22 crores in FY2028 against the interest expenses of Rs.14.16 crores. in FY2027 and Rs. 21.18 crores in FY2028. Net cash accruals is expected to be of Rs  20.67 crores in FY2027 and Rs. 24.69 crores in FY2028 which would be sufficient enough to cover the CPLTD obligations of Rs. 8.55 crores in FY2027 and Rs 7.57 crores in FY2028 Based on these factors, the company’s liquidity position is assessed as Adequate.

NA

Shripad Shankar Nagarkar (SSN) established in 1952, S.S. Nagarkar Jewelers is one of Pune’s leading jewelers' brands with a legacy of over 71 years. Over the decades, the firm has built a strong reputation for creativity, craftsmanship, and innovation, driven by the combined experience of two generations. The brand is recognized for its youth-oriented and artistic jewelers designs and offers an extensive range of gold, diamond, and silver jewelers, including necklaces, earrings, rings, bangles, Nath, and Mangal sutras. S.S. Nagarkar Jewelers operates three stores in different locations across Pune, and its head office is situated at Tulsi Baug, Pune, Maharashtra. The partnership firm comprises Prasad V Nagarkar, Pushkar V Nagarkar, Swati V Nagarkar, Vasanti V Nagarkar, and Vasant S Nagarkar as partners.

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Not Applicable

Not Applicable.

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