Rajgor Castor Derivatives Limited — Credit Ratings, 25-02-2025: Credit Rating

Total Operating Income (TOI) for Rajgor Castor Derivatives Limited reached ₹564.84 crore in FY24, representing a 32% increase from ₹428.78 crore in FY23. A significant driver of this growth can be attributed to increased sales within the agro products sector. However, the company faced challenges in H1FY25, with TOI declining by 10% year-over-year to ₹277.91 crore, leading to an EBITDA drop of 33% to ₹5.46 crore, influenced by higher operational expenses and inventory value adjustments.

Net profit for FY24 improved 76% year-over-year to ₹9.78 crore, with an EPS of ₹0.57. Despite the declining profitability trend in H1FY25 with net profit down to ₹1.72 crore, the overall financial indicators reflect an ongoing positive trajectory in annual performance.

Total debt increased marginally from ₹44.51 crore in FY23 to ₹47.44 crore in FY24, alongside a substantial increase in net worth, which rose to ₹74.22 crore. This solid capital structure presents a gearing ratio of 0.64 times, indicating improved financial stability. However, the EBITDA margin saw a decline to 3.57% in FY24, which may signal the impact of rising costs.

Strategically, the company continues to focus on operational efficiency and leveraging its proximity to raw material sources in Gujarat to maintain competitiveness. However, challenges include significant exposure to commodity price volatility and regional concentration risks.

Given the healthy financial performance and the potential for growth, maintaining a hold position may be prudent until the operational efficiency stabilizes.