Narmada Gelatines Limited has received credit rating reaffirmation from CARE Ratings Limited for its bank facilities worth ₹51.35 crore. The rating agency has maintained its assessment of the company's creditworthiness while noting significant improvements in financial performance.

Credit Rating Details

CARE Ratings has reaffirmed the following ratings for the company's banking facilities:

The rating reaffirmation reflects the company's stable credit profile and improved operational performance during the current financial year.

Financial Performance Highlights

The rating agency noted significant improvement in Narmada Gelatines' profitability metrics. The company's PBLDT margin improved to 18.26% in 9MFY26 compared to 12.28% in 9MFY25. For FY25, the PBLDT margin stood at 12.96%, up from 11.58% in FY24.

The company generated cash accruals of ₹20.81 crore in 9MFY26 compared to ₹13.77 crore in 9MFY25, demonstrating improved cash generation capabilities.

Key Rating Strengths

CARE Ratings highlighted several positive factors supporting the rating decision. The company benefits from over five decades of operational experience in gelatine manufacturing and has established relationships with reputed customers including pharmaceutical and capsule manufacturers. Following the acquisition by Pioneer Jellice Group in June 2023, Narmada Gelatines has gained access to enhanced technical expertise and improved export market opportunities.

The company maintains a strong financial risk profile with comfortable debt coverage indicators. The PBLDT interest coverage ratio stood at 20.05x for FY25, while total debt to gross cash accruals remained at 0.42x as of March 31, 2025.

Operational Challenges and Future Outlook

Despite the positive rating reaffirmation, CARE Ratings noted certain constraints affecting the company's credit profile. The moderate scale of operations remains a key concern, with total operating income of ₹188.81 crore for FY25. The company's profitability continues to be susceptible to volatile raw material prices, particularly crushed animal bones, which constitute the primary input for gelatine production.

The rating agency has outlined specific rating sensitivities for future assessments. Positive factors include significant growth in total operating income above ₹220 crore while maintaining existing PBLDT margins. Negative factors include decline in total operating income below ₹150 crore or PBLDT margin falling below 10% on a sustained basis.

Expansion Plans and Liquidity Position

Narmada Gelatines has planned capital expenditure of ₹33.00 crore over two years to enhance manufacturing capacity and upgrade machinery. The project, expected to be funded through a term loan of ₹25 crore and internal accruals, aims to increase gelatine production capacity by 600 MT and DCP capacity by 1,500 MT. Commercial production is envisaged from January 2027.

The company maintains adequate liquidity with envisaged gross cash accruals of ₹29-30 crore against scheduled debt repayments of ₹2-3 crore in FY26. Working capital utilization remained low at approximately 14% for the ten months ended January 2026.

Source: None/Company/INE869A01010/ff8e23ea-74ca-4418-8b8c-41f50ecfb78a.pdf

Narmada Gelatines Limited has delivered impressive financial performance for the third quarter of FY26, showcasing significant growth across key financial metrics. The gelatin and ossein manufacturer reported substantial improvements in profitability and revenue generation during the quarter ended December 31, 2025.

Regulatory Filing and Board Approval

The company submitted its unaudited standalone and consolidated financial results to the Bombay Stock Exchange pursuant to Regulation 30 and Regulation 33 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The Board of Directors meeting was held on February 12, 2026, commencing at 10:30 A.M. and concluding at 11:20 A.M., where the results were considered and approved.

Strong Quarterly Performance

The company's Q3FY26 results demonstrate robust operational efficiency and market demand strength. Net profit witnessed remarkable growth, while revenue from operations showed consistent upward trajectory compared to the corresponding period last year.

Nine-Month Period Results

The nine-month performance further reinforces the company's strong operational momentum. Revenue growth remained consistent while profitability margins expanded significantly across the period.

Operational Efficiency and Cost Management

The company demonstrated effective cost management across various expense categories. Cost of materials consumed decreased to ₹3,013 lakhs in Q3FY26 from ₹3,126 lakhs in Q3FY25. Employee benefits expense increased to ₹594 lakhs from ₹402 lakhs, reflecting workforce expansion and enhanced compensation structures. Finance costs declined significantly to ₹29 lakhs from ₹55 lakhs, indicating improved financial management.

Statutory Compliance and Audit Review

The financial results received approval from the Board of Directors and were reviewed and recommended by the Audit Committee. Statutory auditors LODHA & CO LLP conducted the limited review as required under Regulation 33 of SEBI Listing Regulations. The auditors confirmed that the unaudited financial results were prepared in accordance with applicable Indian Accounting Standards and disclosed required information without material misstatement.

Business Segment and Associate Company

Narmada Gelatines operates in the manufacture and sale of ossein and gelatin, treating these as a single reportable segment under Ind AS 108 requirements. The consolidated results include proportionate share of profit from India Gelatine and Chemicals Limited, which became an associate company effective December 5, 2024. The associate contributed ₹100 lakhs and ₹291 lakhs to quarterly and nine-month profits respectively.

Labour Code Implementation Impact

The company recognized an incremental liability of ₹82.56 lakhs towards employee benefits following the implementation of consolidated Labour Codes by the Government of India effective November 21, 2025. This amount was accounted for as employee benefits expense in the nine-month period results, demonstrating proactive compliance with regulatory changes.