💰 Financial Performance

Revenue Growth by Segment

The Agarbathies Division revenue grew by 7.26% YoY, increasing from INR 90.05 Cr to INR 96.59 Cr. The Hotel Division saw a significant recovery growth of 145.89%, rising from INR 13.14 Cr to INR 32.32 Cr as operations stabilized post-pandemic.

Geographic Revenue Split

The company derives a major portion of its revenue from Southern India, specifically Andhra Pradesh, Telangana, and Tamil Nadu, where the 'Ambica' brand has strong recognition. The Agarbathies division specifically accounts for 67% of total company revenues.

Profitability Margins

Profitability has been volatile; the company reported a net loss of INR 17.8 Cr in FY2018 (approx. -14.2% net margin) compared to a net profit of INR 1.5 Cr in FY2017 (1.26% net margin). The decline was primarily due to a one-time inventory write-off.

EBITDA Margin

Core profitability was adversely impacted by a one-time inventory write-off in FY2018 due to quality issues, leading to an operating loss during that period. Recent EBITDA trends are not explicitly detailed in percentage terms in the interim reports.

Capital Expenditure

The company had fund-based facilities of INR 66.00 Cr. As of September 30, 2025, non-current assets including property, plant, and equipment stood at INR 144.30 Cr, reflecting historical investments in the hotel and manufacturing units.

Credit Rating & Borrowing

ICRA assigned a long-term rating of [ICRA]B (Stable) in October 2018, which was subsequently withdrawn in November 2018. The company is currently facing high borrowing stress, evidenced by irregular EMI repayments to LIC Housing Finance Limited.

⚙️ Operational Drivers

Raw Materials

Not disclosed in available documents, though the company provides high short-term advances to raw material suppliers for its agarbathi manufacturing process.

Capacity Expansion

The company operates a 3-star hotel with 87 rooms in Chennai and a manufacturing unit in Eluru, Andhra Pradesh. Specific expansion targets in MT or units are not disclosed.

Raw Material Costs

Raw material costs are a significant driver, with the company maintaining a high working capital intensity of 31-35% primarily due to advances paid to suppliers to secure inventory.

Logistics & Distribution

The company maintains a strong distribution network in Andhra Pradesh, Telangana, and Tamil Nadu to support its 67% revenue-contributing agarbathi segment.

📈 Strategic Growth

Expected Growth Rate

7.26%

Growth Strategy

Growth is pursued through segment diversification and leveraging the established 'Ambica' brand. The company is focusing on recovering its hotel division cash flows (which grew 145.89% recently) and maintaining its dominant market position in the agarbathi segment in Southern India.

Products & Services

Agarbathies (incense sticks), 3-star hotel rooms and hospitality services, maize trading, wind power generation, and construction services.

Brand Portfolio

Ambica

Market Expansion

The company is focused on strengthening its established presence in Andhra Pradesh, Telangana, and Tamil Nadu.

Market Share & Ranking

Not disclosed in available documents, though it is noted as a reputed brand in its core Southern Indian markets.

🌍 External Factors

Industry Trends

The agarbathi industry is characterized by high competition and moderate scale. The hospitality industry is evolving with the rise of online aggregators like OYO and Airbnb, which the management identifies as a specific risk to their hotel division.

Competitive Landscape

The agarbathi segment faces intense competition from both organized and unorganized players. The hotel segment competes with traditional hotels and new-age digital aggregators.

Competitive Moat

The company's moat is built on the 50-year track record of its promoters and the strong brand recall of 'Ambica' in specific Southern states. This brand loyalty provides a defensive cushion against new entrants in the incense market.

Macro Economic Sensitivity

The hotel division is highly sensitive to travel and tourism trends and health crises (COVID-19), which led to the inability to service debt to LIC Housing Finance.

Consumer Behavior

A shift toward online accommodation booking (OYO/Airbnb) is forcing the hotel division to adapt its pricing and distribution strategy.

⚖️ Regulatory & Governance

Industry Regulations

Operations are subject to SEBI (LODR) Regulations and the Companies Act 2013. The hotel division must comply with hospitality standards and local tourism regulations.

Environmental Compliance

The company operates a wind power division, contributing to green energy, though specific compliance costs are not disclosed.

Taxation Policy Impact

The company has a deferred tax liability of INR 16.30 Cr as of September 2025.

Legal Contingencies

The company is currently in default/irregular status regarding EMI repayments to LIC Housing Finance Limited due to inadequate cash flows from the hotel division.

⚠️ Risk Analysis

Key Uncertainties

The primary uncertainty is the company's ability to normalize debt repayments to LIC Housing Finance. Financial risk is high due to the weak coverage indicators and historical operating losses.

Geographic Concentration Risk

High concentration in Andhra Pradesh, Telangana, and Tamil Nadu, making the company vulnerable to regional economic downturns.

Third Party Dependencies

High dependency on raw material suppliers, with 31-35% of revenue intensity tied to supplier advances.

Technology Obsolescence Risk

The hotel division faces digital disruption from online booking platforms and aggregators.

Credit & Counterparty Risk

Trade receivables stood at INR 14.03 Cr as of September 2025, representing a risk if customer collections are delayed in the competitive agarbathi market.