Swaraj Suiting Limited Assigned 'ACUITE A-' Rating by Acuite Ratings
Acuite Ratings & Research has assigned Swaraj Suiting Limited a long-term credit rating of 'ACUITE A-' with a 'Stable' outlook for its ₹123.09 crore bank facilities. The rating reflects the company's strong promoter experience, improving operations, and healthy financial profile, despite working capital intensity.
A good credit rating can improve borrowing costs and access to finance, which is important for a company undertaking significant capital expenditure. However, it is not a direct financial result or a major strategic announcement, hence medium impact.
The assignment of a new credit rating of 'ACUITE A-' with a 'Stable' outlook is a positive development for the company, indicating financial stability and a favorable assessment by a credit rating agency.
Swaraj Suiting Limited (SSL) has been assigned a long-term credit rating of 'ACUITE A-' with a 'Stable' outlook by Acuite Ratings & Research Limited. This rating applies to the company's bank facilities amounting to ₹123.09 crore.
The rating rationale highlights SSL's extensive promoter experience in the textile sector, its established manufacturing capabilities in denim and cotton finished products since 2022, and its improving scale of operations and profitability margins. The company has also strengthened its financial risk profile through equity infusion and possesses a strong liquidity position.
SSL has raised approximately ₹263 crore via warrants and preference shares to fund its capital expenditure and working capital needs. Of this, ₹132 crore was received in FY26, with the balance expected by March 2027. The company is also undertaking a backward integration strategy by setting up new spinning lines with an estimated project cost of ₹421.36 crore, funded by debt and internal accruals/equity. Approximately ₹73.59 crore has been incurred as of May 5, 2026, though financial closure for the remaining project cost is pending.
The company's working capital operations are intensive, with GCA days at 273 for FY26, primarily due to high inventory holding periods (185 days). Profitability is also subject to volatility in raw material prices.
Financially, SSL reported operating income of ₹581.44 crore and PAT of ₹52.37 crore in FY26, with PAT margin at 9.01%. The gearing ratio improved to 0.90 times in FY26 from 1.77 times in FY25. Liquidity is considered strong, supported by net cash accruals and expected equity infusion through warrant conversions.
A plain-language summary of a public exchange filing by Swaraj Suiting Limited. Read the original for the full detail.