Rating Rationale

Brickwork Ratings has assigned the long-term and short-term ratings at “BWR BBB+/Stable and BWR A2” for the bank loan facilities of Rs. 95.00 Cr of Sar India Private Limited. The ratings factor in the company’s moderate financial risk profile, low gearing ratios, the extensive industry experience of its directors. Moving forward, the company's ability to enhance its revenue profile and strengthen its overall financial risk profile will be key rating sensitivities.

The rating outlook has been assigned as "Stable" as BWR believes that Sar India Private Limited 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.

The key covenants are the standard terms as stipulated in the sanction letters of the rated facilities. However there are financial covenants by Federal Bank on Current Ratio not below 1.33x, TOL/TNW not to exceed 3x which are met  by the company and the Total Debt/EBITDA lesser than 3.50x,covenant remains breached ( As per BWR, the EBITDA Calculation does not include Other Income)

• Experienced Promoters and Established Industry Presence :

  The group benefits from over 14 years of operational history in polymer trading, anchored by primary promoter Mr. Rohit Parmar, who brings over 20 years of domain experience. The group maintains procurement relationships with more than 15 global petrochemical majors such as Taiyo Vinyl Corporation, Hanwha Solutions, Sinochem International, and IRPC Public Company Limited and serves approximately 1,000 customers across 9+ countries.

• Strategic Shift to Asset-Light, High-Turnover Business Model :

  During FY26, the group completed its transition away from an inventory-heavy stock-and-sell model to an asset-light, ~95% back-to-back execution framework. All warehouses were surrendered and workforce headcounts were reduced from 82 to 12 employees, significantly lowering fixed operating overheads. Order pre-commitment minimizes unsold inventory risk and holding expenses, keeping year-end inventory holding periods low.

• Enhanced Capital Efficiency and Margin Profile :

  Despite a planned scale compression during the FY26 inventory liquidation phase, the revenue adjusted to Rs.787.64 Cr in FY26 from Rs.1,965.61 Cr in FY25, consolidated Operating Profit (OPBDIT) rose to Rs.11.38 Cr (1.45% margin) from Rs.9.93 Cr (0.51% margin) in FY25. PAT turned positive to Rs.2.10 Cr in FY26.

• Scale Contraction During Transitional Phase :

  Top-line turnover contracted sharply from peak levels of Rs.2,524.44 Cr in FY24 to Rs.787.64 Cr in FY26 (Prov.). This scale compression was driven by a deliberate strategic exit from direct domestic stock-and-sell operations, during which the group surrendered its warehousing infrastructure, liquidated legacy inventory, and voluntarily repaid Rs.360 Cr of bank borrowings.  While operational recovery is underway, the group demonstrated the revenue achievement of about Rs.602 Cr through August 2026.

• Exposure to Regulatory, Foreign Exchange, and Cross-Border Counterparty Risks :

  Expanding international operations through offshore subsidiaries exposes the consolidated entity to multi-jurisdictional trade regulations, stringent central bank statutory compliance timelines, and global counterparty credit risk. Managing cross-border trade legs across multiple international banking channels requires strict adherence to trade clearance frameworks and timely proceeds realization. While these operational exposures are partially cushioned, underlying risks related to international trade policy shifts, geopolitical disruptions, and counterparty defaults persist across global supply chains.  

Positive Rating Sensitivities:

• Sustained revenue growth beyond projections on a continuous basis, driven by the successful scaling of international operations through SAR Overseas FZE.

• Expansion in operating margins consistently above 2.50% and PAT margins improving above 1.50%, supported by higher-margin product lines.

Negative Rating Sensitivities:

• Compression in operating margins below 1.00% or occurrence of net losses due to adverse price fluctuations in bulk polymer resins (PVC, PE, PP) or inventory write-downs.

• Significant increase in aggressive unhedged international exposures, or substantial reliance on bank limits leading to Total Debt/TNW exceeding 1.00x or high utilization of Non-Fund Based (LC) facilities leading to bank line devolvement.

On a Standalone basis, the Company has Adequate liquidity supported by adequate cash accruals of Rs.3.18Cr in FY2026 (Prov.) as against nil debt obligations and moderate cash balance of Rs.20.76Crore. Over the medium term, accruals are expected in the range of Rs.2-2.50Cr, against the debt repayment obligations of about Rs.0.25Cr. The current ratio of Sar India Private Limited stood at 1.55x indicating the adequate liquidity.

On a Consolidated basis, the group has Adequate liquidity supported by sufficient cash accruals of Rs.4.35Cr in FY2026 (Prov.) as against nil debt obligations and moderate cash balance of Rs.19.91Crore. Over the medium term, accruals are expected in the range of Rs.10-12.84Cr, against the debt repayment obligations of about Rs.0.25Cr. The group is currently not utilizing its fund based bank limits providing the cushion and the current ratio of the group stood at 1.32x indicating the adequate liquidity maintained in the group.

Based on the assessment, the entity’s ESG profile is not expected to materially affect its creditworthiness

SAR India Private Limited, incorporated on March 4, 2010, was formerly named Sushila Parmar International Pvt Ltd before rebranding to align under a unified corporate identity. The company functions as a trading entity for polymers and associated raw materials, handling key product lines such as Polyvinyl Chloride (PVC) Resin, Polyethylene (PE) & Polypropylene (PP), Linear Low-Density Polyethylene (LLDPE), High-Density Polyethylene (HDPE), Ethylene-Vinyl Acetate (EVA), and Acrylonitrile Butadiene Styrene (ABS). Its raw materials supply diverse domestic manufacturing sectors, including automotive, medical devices, furniture, electronics, consumer durables, horticulture, transportation, and luggage.

Operationally, SAR India has restructured its business setup by shifting away from a traditional stock-and-warehouse distribution model to a leaner, asset-light structure focused on minimizing holding costs and reducing local infrastructure. Under this model, approximately 95% of sales are conducted on a back-to-back order basis, leaving minimal transit or unsold inventory. During its transition away from direct warehouse distribution, the company utilized an alternate online sales platform, "Source," run by group entity SPCX Private Limited, to route products to domestic buyers. The company services key domestic customers, such as SPCX Private Limited, Suraj Logistix, and Kisan Irrigations and Infrastructure, extending a standard 45-day credit period before interest charges apply.

The Complexity Indicator refers to the ease with which the returns associated with the rated instrument could be estimated. It does not indicate the risk related to the timely payments on the instrument, which is rather indicated by the instrument's credit rating. It also does not indicate the complexity associated with analysing an entity's financial, business, industry risks or complexity related to the structural,transactional or legal aspects. Details on the complexity levels of the instruments are available on BWR's website Complexity Levels.

Credit Rating Agency	Status and Reason for Non-Cooperation	Date of Press Release
ACUITE	In the absence of adequate information by the company	03Aug2026

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Brickwork Ratings (BWR), a Securities and Exchange Board of India [SEBI] registered Credit Rating Agency and accredited by Reserve Bank of India [RBI]. BWR is the 5th agency to get a credit rating registration in India in 2009 and its corporate office in Bengaluru. It has a country-wide presence with representatives in 150+ locations. Canara Bank is an institutional investor in Brickwork.

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