Rating Action Details

CRISIL Ratings reaffirmed the corporate credit rating of Kanchi Karpooram Limited at 'CRISIL BBB-/Stable' through their rating rationale dated October 13, 2026. There is no instrument being rated, and the regulator of the instrument is not applicable.

Financial Position and Performance

  • Operating Income: ₹152.17 crore in fiscal 2026 (compared to ₹148.39 crore in previous period)
  • Reported PAT: ₹14.25 crore in fiscal 2026 (compared to ₹5.16 crore in previous period)
  • PAT Margin: 9.37% in fiscal 2026 (compared to 3.48% in previous period)
  • Networth: ₹217 crore as of March 31, 2026
  • Free Cash & Bank Balance: ₹42 crore as of March 31, 2026
  • Debt Profile: Zero debt (adjusted debt/adjusted networth: 0.00 times)
  • Interest Coverage: 166.79 times in fiscal 2026

Business Risk Profile Assessment

Strengths:

  • Established market position in camphor industry with four decades of promoter experience
  • Healthy financial risk profile with strong liquidity position
  • One of the leading players in Indian camphor market

Weaknesses:

  • Stagnant revenue over two fiscals through 2026
  • EBITDA margin moderated to 5.3% in fiscal 2026 due to elevated raw material prices
  • Operating margin volatility ranging 1.50-17.4% over four fiscals through 2025
  • Susceptibility to gum turpentine price volatility (key raw material, primarily imported)
  • Limited hedging of imported gum turpentine (USD denominated payments)
  • Moderate client concentration: largest customer ~20% of revenue, top three clients ~30% of revenue
  • Intense competition from domestic manufacturers and Chinese imports

Liquidity Position

  • Annual Net Cash Accrual: Expected ₹7-8 crore over medium term
  • Working Capital Facility: ₹25 crore facility in fiscal 2026
  • Facility Utilization: Average 20% utilization for 12 months ended September 2026
  • Debt Obligations: Nil debt obligations
  • Liquidity assessed as "Adequate"

Outlook and Sensitivity Factors

Stable Outlook: CRISIL believes business risk profile will remain stable over medium term supported by strong financial risk profile and liquidity.

Upward Sensitivity Factors:

  • Revenue growth driven by volume and operating margin sustained over 12%
  • Steady net cash accrual
  • Sustenance of healthy financial risk profile and liquidity

Downward Sensitivity Factors:

  • Revenue decline over 30% due to volume degrowth
  • Significant decline in operating margin leading to lower net cash accrual
  • Stretch in working capital cycle
  • Higher-than-expected debt-funded capex
  • Large dividend payouts weakening financial risk profile

Operational Details

  • Manufacturing facility located in Kanchipuram, Tamil Nadu
  • Products: camphor, dipentene, sodium acetate trihydrate, pine tar
  • Promoted by Mr. Suresh Shah and family
  • Incorporated in 1992
  • Listed on Bombay Stock Exchange

Rating History

The rating has been maintained at 'CRISIL BBB-/Stable' since November 28, 2024. Previous rating history shows:

  • November 29, 2023: CRISIL BBB-/Stable
  • November 26, 2025: CRISIL BBB-/Stable
  • July 19, 2023: CRISIL BBB/Stable
  • June 30, 2023: CRISIL BB+/Stable (Issuer Not Cooperating)