Rating Rationale

BWR assigns the ratings of 'BWR BBB-/Stable' and 'BWR A3' for the bank loan facilities of Rs 54.76 Crs.

The ratings are supported by Vedant Poly Fabs Limited’s successful transition to integrated in-house manufacturing and its strong 42% growth in operating income to Rs. 115.14 Crore in FY26. The expansion of installed capacity to 1.32 crore kg, utilizing advanced extrusion and printing machinery, enables the production of higher-margin customized packaging and supports future growth. 

The rating outlook is assigned as “Stable,” reflecting BWR’s expectation that Vedant Poly Fabs Ltd. business risk profile will remain steady over the medium term. A stable outlook indicates a low probability of a rating change during this period. The outlook may be revised to “Positive” if the company achieves sustained improvement in revenue and profitability margins, while it may be revised to “Negative” in the event of a deterioration in its financial risk profile.

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

• Experienced Management and Fully Integrated Setup :

  The promoter directors possess adequate industry expertise and demonstrate strong commitment to operations. This is evidenced by personal guarantees and registered mortgages on factory land, buildings, and residential units. The company operates a fully integrated facility covering extrusion, flexo and rotogravure printing, lamination, and pouching. These operations are backed by established ISO 9001:2015, ISO 22000:2018, and HACCP quality certifications.

• Revenue Growth and Stronger Manufacturing Focus :

  Total Operating Income increased by 42.11% year-on-year, growing from Rs. 81.02 crore in FY25 to Rs. 115.14 crore in FY26. More importantly, core domestic manufacturing sales rose sharply by 118.23% from Rs. 50.84 crore to Rs. 110.96 crore. At the same time, lower-margin traded goods sales dropped from Rs. 30.18 crore to Rs. 4.18 crore. This strategic transition has resulted in higher value addition across the business

• Growing Net Worth and Capital Base :

  Tangible Net Worth grew significantly from Rs. 15.42 crore in FY25 to Rs. 42.26 crore in FY26. This increase was supported by retained earnings of Rs. 10.97 crore and an equity infusion of Rs. 15.87 Crores and share capital and share premium through debt-to-equity conversions. The expanded equity base provides a stronger financial cushion against market disruptions. It also significantly enhances the company's overall borrowing capacity

• Environmental and Plastic Waste Regulations :

  As a flexible packaging manufacturer using polymer resins, the company is subject to evolving regulations under the Plastic Waste Management Rules and Extended Producer Responsibility (EPR) mandates. Compliance modifications or state-level restrictions on certain plastic packaging formats could increase operational costs or necessitate capital outlays

• Lengthening Cash Conversion Cycle :

  Trade receivable days increased from 62 days in FY24 to 90 days in FY26 (peaking at 134 days in FY25). Concurrently, inventory turnover slowed from 10.01 times to 5.80 times. This ties up working capital in unsold inventory (Rs. 24.29 crore) and uncollected receivables (Rs. 28.38 crore), heightening reliance on short-term bank borrowings.

Upward Sensitivity

• Achieving a total operating income of Rs. 180 crore or more in FY 27.

• Improving the current ratio beyond 2.50 times.

• Generating net cash accruals of Rs. 20 crore or above.

Downward Sensitivity

• Total operating income falling below Rs. 115 crore in FY 27

• Current ratio deteriorating to below 1.25 times.

• Net cash accruals shrinking to below Rs. 13 crore.

Adequate liquidity is characterized by a sufficient cushion in accruals vis-à-vis repayment obligations.

The Current Ratio of the company stood comfortably at 1.44 times in FY 26. Debt protection metrics remained adequate, with DSCR at 4.29 times in FY 26. The Cash and Bank balance of the company is at Rs. 7.55 Crores as per FY 26 audited financials. The company's EBITDA stood at Rs. 19.31 Crores in FY 26 against interest and finance charges of Rs. 2.21 Crores. The EBITDA level remained adequate to service the interest obligations year on year. The tangible net worth of the company stood at Rs. 42.26 Crores in FY 26. Furthermore, the company generated healthy net cash accruals of Rs. 13.45 Crores against a Current Portion of Long-Term Debt (CPLTD) of Rs. 3.58 Crores, demonstrating that it will be able to pay off its yearly debt obligations easily. Hence, the liquidity position of the company is adequate.

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

Environmental: The company operates in a manufacturing sector where environmental risks are typically driven by high energy consumption and waste generation. To mitigate these risks, Vedant Poly Fabs has implemented sustainable waste management solutions, utilizing advanced waste segregation and energy-efficient recycling techniques to reduce landfill waste and lower its carbon footprint. Furthermore, the company utilizes solventless lamination technology, which actively minimizes environmental impact by reducing harmful emissions and odors during production.

Social: The factors for the company rely heavily on adherence to labor laws, accident prevention frameworks, and human-capital development. Vedant Poly Fabs maintains strict operational and safety protocols, supported by its ISO 9001:2015, ISO 22000:2018, and HACCP (Hazard Analysis Critical Control Point) certifications. These certifications ensure that the company provides a safe, compliant manufacturing environment that protects workforce well-being and ensures high product safety standards.

Governance: The governance assessment focuses on board structure, audit mechanisms, and the robustness of compliance systems. Vedant Poly Fabs demonstrates a structured governance framework with a Board of Directors that includes executive members alongside independent directors (Shikha Gupta, Puja Shaw, and Ravi Todi), ensuring objective oversight. Additionally, the company maintains transparent financial and compliance practices through regular statutory audits conducted by independent chartered accountants.

Based in Kolkata, West Bengal, India, Vedant Poly Fabs Limited (established in 2018) is a leading manufacturer of flexible printed packaging goods and materials. The company specializes in producing co-extruded multi-layered poly films, solventless poly film lamination, and advanced printing solutions (such as 8-Color Rotogravure and CI Flexo Printing) tailored for the flexible packaging industry. The company's board of directors features Pankaj Kumar Maheshwari (Managing Director), Sujata Maheshwari (Whole-Time Director), and Sunil Bihani (Director cum CFO), along with independent directors Shikha Gupta, Puja Shaw, and Ravi Todi.

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.

Not Applicable

BWR Board of Directors have no influence over rating decisions, nor do they sit on the rating committee or review, discuss or evaluate any credit rating during the Board meetings.

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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