Kanpur Plastipack Ltd's Credit Ratings Reaffirmed by CRISIL; Bank Debt Limit Enhanced to Rs 305 Crore

Kanpur Plastipack Ltd's Credit Ratings Reaffirmed by CRISIL; Bank Debt Limit Enhanced to Rs 305 Crore​

CRISIL Ratings Limited has reaffirmed its credit ratings for Kanpur Plastipack Ltd (KPL), noting that the company maintains a comfortable financial risk profile and benefits from the extensive experience of its promoters in the packaging sector. The rated amount for bank debt facilities has been enhanced, with the Long Term Rating being affirmed at Crisil BBB+/Stable and the Short Term Rating maintained at Crisil A2.

The enhancement signifies an increase in the total Bank Loan Facilities Rated to Rs 305 Crore, up from the previous figure of Rs 225 Crore.

Business Performance and Outlook​

The rating rationale notes that KPL's established market position, combined with the experience of its promoters in polypropylene (PP) bags manufacturing and industry dynamics, continues to support the business. Overall revenue has seen growth of approximately 10%, reaching Rs 718.76 crore in fiscal 2026. The company is anticipated to achieve over Rs 770 crore in revenue by FY 27, driven by increased volume and realizations.

KPL caters to a diverse end-user industry base, including agriculture, chemicals, food processing, pharmaceuticals, and construction. Exports constitute over 65% of the company's revenue. A key strategic move involves expansion into the non-woven technical textile segment. The company is targeting diverse end-use sectors such as automotive fabrics, carpets, shoe linings, and geotextiles to drive future growth.

Financial Health and Risk Factors​

The financial risk profile has shown steady improvement. As of March 31, 2026, the networth increased to Rs 268 crore. Debt protection metrics were noted as robust for fiscal 2026, with interest coverage at 5.75 times and net cash accrual to adjusted networth ratio at 0.45 time.

The company is undertaking a capital expenditure (capex) of Rs 108 crores, funded through a term loan of Rs 40 crore and the balance from internal accruals, aimed at improving FIBC capacity and adding value.

However, CRISIL Ratings identified certain susceptibility factors:

• Raw Material Volatility: Raw material cost accounts for 60-65% of the cost of sales. Adverse movements in input prices pose a constraint on the operating margin.
• Revenue Diversification: While KPL's product portfolio includes FIBC, fabrics, and multi-filament yarn, FIBC accounted for 55-60% of revenue in fiscal 2026. Exports constituted around 68% of total revenue, with the top 10 customers contributing approximately 35%.

Liquidity and Financial Indicators​

Liquidity is deemed adequate. Bank limit utilization stood at around 64.43 percent for the preceding twelve months ended March 2026. The Current Ratio was moderate at 1.74 times as of March 31, 2026.

The financial indicators summarized by CRISIL Ratings are provided below:

Banking Facilities Summary​

The company holds various bank facilities backed by multiple lenders including State Bank of India, YES Bank Limited, and Axis Bank Limited. These facilities include:

• Fund-Based Facilities totaling Rs 349 crore across three banks.
• Letter of Credit amounting to Rs 23 crore.
• Non-Fund Based Limit of Rs 15 crore.
• Rupee Term Loan commitments totaling Rs 52.46 crore with various lenders, including State Bank of India, YES Bank Limited, and Axis Bank Limited.

KANPRPLA Stock Price Movement​

Shares of Kanpur Plastipack Limited slipped by 1.68% on Thursday, settling at ₹189.69 in the equity market. The stock traded 11,821 shares during the session.