Trident Limited — Credit Ratings, 05-04-2025: Credit Rating

Trident Limited has reaffirmed its credit ratings, reflecting strong operational capacity and strategic management despite recent profitability pressures. Long-term bank facilities totaling ₹206.26 crore and short-term facilities of ₹1,540 crore maintain a CARE AA; Stable outlook, indicating stable financial health.

In FY24, Trident reported a total operating income of ₹6,829 crore, marking a 7% growth from ₹6,353 crore in FY23. This recovery was driven by increased demand in both the yarn and home textiles segments. However, the company's profitability faced challenges, with net profit declining to ₹350 crore from ₹442 crore year-on-year. The PBILDT margin decreased to 13.77% in FY24 due to lower cotton yarn spreads and declining sales realizations in the paper segment, significantly affected by oversupply and rising raw material costs. EPS is reported at ₹1.56, consistent with the company's operational trends.

Operational costs remain a key area of focus, showing a moderate increase align with changes in production capacity and market conditions, impacting overall cost efficiencies. The company's working capital-intensive operations necessitate careful management of inventory levels amid fluctuating raw material prices, particularly in cotton.

Despite recent profitability downturns, Trident’s market position remains robust, bolstered by strategic export initiatives and a diversified product range. As such, maintaining a "hold" position could be favorable, given expected gradual improvements in operational performance and market conditions moving forward.