**GKB Ophthalmics Limited**, established in **1981**, is an Indian-based manufacturer and trader of ophthalmic lenses. Headquartered in **Goa**, the company specializes in **semi-finished plastic and glass lenses** designed to correct visual ailments such as myopia, hypermetropia, and presbyopia. While the company maintains a significant manufacturing footprint and a global subsidiary network, it is currently navigating a complex period of financial restructuring, legal challenges, and strategic pivoting. --- ### Manufacturing Infrastructure and Production Capacity The company operates three manufacturing units (Unit I, II, and III) located at the **Tivim Industrial Estate, Mapusa, Goa**. The facilities are certified **ISO 9001:2015** and have been reclassified from "Orange" to the **"Green" category** by the State Pollution Control Board. | Production Metric | Figures | | :--- | :--- | | **Installed Capacity** | **35,000 lenses per day** | | **Normal Operating Capacity** | **25,000 pieces per day** | | **Actual Production (FY24)** | **4,829,409 pieces** | | **FY 2024-25 Actual Production** | **5,283,567 pieces** | | **FY 2025-26 Production Target** | **15% increase** YoY | | **FY 2025-26 Sales Target** | **Rs. 39.00 Crores** | **Operational Status Note:** As of **October 2025**, production at the Tivim plant was reduced to **50%** capacity. This was a strategic response to sluggish market demand and the cessation of export orders from the US subsidiary following heavy **tariff impositions**. --- ### Global Subsidiary Network and Strategic Realignment GKB Ophthalmics manages its international footprint through a series of subsidiaries, though this structure is currently being streamlined to eliminate unviable operations. * **GKB Ophthalmics Products FZE (UAE):** A wholly-owned subsidiary serving the Middle East. * **Lensco - The Lens Company (USA):** A step-down subsidiary catering to the US market; operations were severely impacted by **US tariffs** in late 2025. * **Prescription Optical Products LLC (Dubai):** A subsidiary of the UAE entity. * **Prime Ophthalmic Products (PTY) Ltd (South Africa):** Approved for **closure in November 2025** due to recruitment failures and unsustainable losses. * **GSV Ophthalmics Private Limited (India):** A **79.54%** held material subsidiary originally intended for **Hi-Index Lenses**. The project was deemed unviable due to COVID-19 disruptions. * **Liquidation Status:** Voluntary winding up initiated in late 2025. * **Capital Recovery:** **Rs. 11.70 Crores** in capital and **Rs. 62.74 Lakhs** in dividends recovered by **February 2026**. --- ### Financial Performance and Credit Profile The company has faced persistent financial headwinds, characterized by **EBITDA losses for six consecutive years** and a strained liquidity position. #### **Comparative Financial Summary (INR Lakhs)** | Parameter | FY 2024-25 | FY 2023-24 | FY 2022-23 | | :--- | :---: | :---: | :---: | | **Revenue from Operations** | **3,274.94** | **3,118.05** | **2,772.93** | | **Net Profit / (Loss)** | **(611.00)** | **(353.07)** | **(288.73)** | | **Domestic Sales** | **2,643.24** | **2,813.11** | **2,455.39** | | **Export Sales** | **631.70** | **304.94** | **5,092.06*** | *\*Consolidated figures for FY23 reflect higher export contributions prior to tariff impacts.* #### **Debt and Credit Ratings** As of **April 2025**, **CRISIL Ratings** reaffirmed the company’s bank facility ratings at **CRISIL D**, indicating ongoing default or high risk of default. * **Total Bank Loan Facilities:** **Rs. 15.1 Crore**. * **Gearing Ratio (Standalone):** Increased sharply to **102.33%** in March 2025 from **45.89%** in March 2024. * **Liquidity:** Classified as **Poor**; net cash accruals are insufficient to cover debt obligations of **Rs. 31-35 Lakhs** over the medium term. --- ### Capital Structure and Funding Strategy To manage liquidity, the company has shifted toward **unsecured loans** from related parties and directors: * **Managing Director Loan:** **Rs. 5.00 Crore** approved in **Nov 2025** at **9.25% p.a.** to repay subsidiary debt. * **Previous MD Loan:** **Rs. 3.00 Crore** at **11% p.a.** for working capital. * **Third-Party Loan:** **Rs. 1.41 Crore** from Shefali Chawala. * **New Borrowing Limits:** Proposed a **Term Loan of Rs. 7.50 Crores** from banks, requiring an increase in borrowing limits under **Section 180(1)(c)**. --- ### Market Dynamics and Growth Strategy Despite financial constraints, the company is pursuing a strategy of **import substitution** and **capacity expansion** to capture domestic growth in Tier-2 and Tier-3 cities. * **Product Evolution:** Shifting focus toward **blue-light-blocking** and **anti-glare lenses** to meet modern consumer needs. * **Modernization:** Investment in **two new advanced machines** for lens development and coating at **Unit II**. * **Capacity Target:** Aiming to scale plastic lens production from **22,000** to **40,000 pieces per day**. * **Export Obligations:** Under its **100% EOU** license, the company must achieve **Net Foreign Exchange (NFE)** earnings of **Rs. 10.48 Crores** by March 2025. As of March 2024, **Rs. 3.88 Crores** was achieved, leaving a **Rs. 6.6 Crore** commitment. --- ### Risk Factors and Mitigation #### **1. Competitive and Geopolitical Risks** * **Chinese Dumping:** Intense pricing pressure from Chinese manufacturers. While an **Anti-Dumping Duty (ADD)** was imposed in **December 2022**, the company has appealed to **CESTAT** for more robust protections. * **Tariff Sensitivity:** The total stoppage of orders from the US subsidiary in October 2025 highlights the company's vulnerability to international trade policy. #### **2. Operational and Financial Risks** * **Raw Material Dependency:** **65%** of materials are sourced from **China and Japan**, creating supply chain and **Foreign Exchange** risks (sensitivity of **1.15** per 1% USD change). * **Working Capital:** High **Gross Current Asset (GCA)** days (**139 days**) and stretched trade payables (**140-150 days**). #### **3. Legal and Regulatory Contingencies** | Issue | Description | | :--- | :--- | | **Labour Dispute** | **Rs. 8.82 Crore** recovery order from Goa Trade Union; currently challenged in **High Court**. | | **GST Penalty** | **Rs. 23.43 Lakh** penalty regarding ITC claims; under appeal. | | **Statutory Dues** | Reported delays in depositing **Provident Fund (PF)** and **TDS**. | | **Licensing** | Factory license renewals for Units I and III are pending due to structural changes. | --- ### Workforce and Internal Innovation The company maintains a stable core workforce of **179 permanent employees**, with **160** having served for over **10 years**. To manage costs during the 2025 slowdown, the company reduced manpower by releasing temporary workers. **Technology Absorption:** No technology was imported between **2022 and 2025**; the company relies on internal R&D to drive cost reductions and efficiency, such as installing advanced controllers in assembly rooms to reduce power consumption. A planned **Solar Panel** installation at Unit I remains on hold pending available funds.