Riba Textiles Ltd

Rating action and instruments

• Action: CARE Ratings reaffirmed RTL's bank facilities ratings with Stable outlook.
• Instruments/Facilities Rated: Long-term bank facilities CARE BBB; Stable; Short-term facilities CARE A3+.
• Rationale: Moderate working capital needs; comfortable capitalization; adequate liquidity; promoters' long-standing experience; diversified client base.
• Weaknesses: highly competitive textile industry; currency and raw material price volatility; geographic concentration.
• Liquidity: Adequate liquidity; free cash and bank balance Rs 4.15 crore; gross cash accruals FY27 Rs 13–14 crore.
• Capital structure: Gearing 0.72x; total debt Rs 75.88 crore; debt protection metrics moderate.
• Operating cycle: 95 days (FY26) vs 72 days (FY25); inventory up; receivables slower.
• Rating sensitivities: Positive—scale beyond Rs 300 crore with ROCE ~13%; Negative—gearing >1.0x or WC cycle >70 days.
• Material changes since last rating: Rating reaffirmed; no change in outlook.
• FY26 financials: Revenue Rs 255.38 crore; PBILDT Rs 22.71 crore; PBILDT margin 8.89%; PAT Rs 8.13 crore.

Rating action

• CARE Ratings reaffirmed RTL's bank facilities; Rating Watch removed; Stable outlook.
• Facility details: ₹65 crore; LT/LT-ST Working Capital and ₹29 crore LT; rated.
• Rating agency: CARE Ratings Limited.

Instruments rated

• Fund-based LT/LT-ST Working Capital Limits: ₹65 crore; CARE BBB; Stable.
• Fund-based LT Term Loan: ₹29 crore; CARE BBB; Stable.
• Rating agency: CARE Ratings Limited.

Rationale & drivers

• US tariff reduction to 10% supported the action.
• Diversification into Latin America reduces US exposure.
• Operating cycle around 95 days; inventory up; receivables steady.
• Promoter experience and diversified clientele support credit quality.
• Gearing at 0.72x as of 31 Mar 2026.
• Debt metrics: PBILDT to debt 3.34x; debt to GCA 4.98x.
• Interest coverage 3.50x; liquidity adequate.
• Exports account for 89% of sales; US share 20% in FY26.
• Geographic concentration persists; competition in textile industry.
• Liquidity: free cash ₹4.15 cr; FY27 gross accruals ₹13–14 cr.
• Current ratio 1.19x; quick ratio 0.68x as of 31 Mar 2026.
• WC cycle manageable; borrowings utilization ~65%.

Financial highlights

• FY26 operating income ₹255.38 cr; PBILDT ₹22.71 cr; PBILDT margin 8.89%.
• PAT ₹8.13 cr; tangible net worth ₹106.02 cr; gearing 0.72x.
• Total debt ₹75.88 cr; debt to GCA 4.98x.
• Debt to PBILDT 3.34x; interest coverage 3.50x.
• Liquidity adequacy; free cash ₹4.15 cr; WC cycle 95 days.

Material changes since last rating

• Rating Watch negative implications removed; Stable outlook assigned.

Outlook

• Outlook: Stable.

• No material board meeting outcome disclosed in this chunk.

Financial Results Approval

• Unaudited standalone financial results approved for quarter and nine months ended December 31, 2025
• Audit Committee reviewed the financial results before Board approval
• Limited Review Report issued by statutory auditors M/s. Ashwani K. Sindwani & Co.