Pasupati Acrylon Limited (**PAL**) is a prominent Indian industrial manufacturer established in **1982**, with a centralized manufacturing hub located in **Thakurdwara, Uttar Pradesh**. Historically a specialist in synthetic fibers, the company has recently undergone a strategic transformation into a diversified player with significant interests in flexible packaging and renewable energy. --- ### **Core Industrial Segments & Production Capacities** PAL operates three distinct business verticals, leveraging high-end technology and international quality standards. | Segment | Product Details | Annual Capacity | Technology & Standards | |:---|:---|:---|:---| | **Acrylic Fibre** | Fiber, Tow, and Tops (Dyed/Grey) | **42,000 MT** | Collaboration with **SNIA BPD Italy** (FIAT Group) | | **CPP Film** | Cast Polypropylene Film | **10,000 MT** | European machinery; **BRCGS High Hygiene Grade A** | | **Ethanol** | Grain-based Biofuel (E20) | **150 KLPD** | Aligned with GOI Ethanol Blending Programme | #### **1. Acrylic Fibre: The Legacy Core** As one of only three major manufacturers in India, PAL holds a strong domestic position. Acrylic fiber serves as a lightweight, flexible, and **low-cost alternative** to wool and cotton. * **Applications:** Sweaters, sportswear, socks, home furnishings, and industrial cloth. * **Performance (FY 2024-25):** Produced **35,198 MT** and sold **33,850 MT**, generating revenue of **₹538.1 crore**. * **Market Outlook:** Projected **4.2% CAGR** through **2035**, driven by population growth and fashion industry demand. #### **2. CPP Film: High-Growth Packaging** Cast Polypropylene (CPP) films are favored for their transparency, high impact strength, and heat sustainability. * **Applications:** Food & beverage packaging, e-commerce, apparel, and healthcare. * **Operational Recovery:** PAL successfully reduced its **Loss Before Tax** in this segment by **92.57%** in FY25. Revenue stood at **₹80.67 crore** on sales of **6,409 MT**. * **Export Growth:** Exports surged to **1,107 MT** in FY25, up from **177 MT** the previous year. #### **3. Ethanol: The Strategic Growth Engine** Commencing commercial production on **March 25, 2025**, this segment represents PAL’s pivot toward renewable energy. * **Investment:** Total project cost of **₹188 crore** (initially budgeted at **₹167.58 crore**), funded via a **₹108 crore** term loan and internal accruals. * **Order Book:** Allocated **32,320 kilolitres** for **ESY 2025-26** by Oil Marketing Companies (OMCs), with an estimated value of **₹215.00 crore**. * **Quality:** Achieved **99.83% purity** using maize and broken rice as feedstock. --- ### **Financial Performance & Capital Structure** The company demonstrated a robust recovery in **FY 2024-25**, characterized by a **168.24% growth in Net Profit** despite global supply chain volatility. #### **Key Financial Metrics** | Metric (₹ Crore) | FY 2024-25 | FY 2023-24 | FY 2022-23 | |:---|:---|:---|:---| | **Revenue from Operations** | **621.43** | **575.23** | **827.96** | | **Profit Before Tax (PBT)** | **47.72** | **18.40** | **48.45** | | **Net Profit (PAT)** | **35.38** | **13.19** | **35.91** | | **Cash & Liquid Investments** | **122.83** | - | - | #### **Debt Profile** * **Term Loan:** Sanctioned by **Indian Bank** at **10.20% p.a.** * **Repayment:** **28 ballooning quarterly installments** starting **March 2026**, following a 12-month moratorium. * **Security:** Secured by Ethanol plant assets, **20 acres of land** (valued at **₹5.61 crore**), and a **₹6.5 crore FDR**. --- ### **Operational Efficiency & Sustainability Initiatives** PAL has invested heavily in modernizing its centralized hub to drive down costs and improve environmental footprints. * **Energy Upgrades:** Installed a **750 KW Solar Power System** and high-efficiency air washer/cooling fans. * **Steam Efficiency:** Replaced an **8 MW** impulse turbine with a modern reaction turbine, saving **1.00 Ton/hour** of steam, valued at **₹100 Lakh** annually. * **Certifications:** Holds **ISO 9001:2015** and **OEKO-TEX Standard 100 Class 1** (safe for baby skin) certifications. --- ### **Strategic Restructuring & Governance** In **2025**, PAL completed a major **Scheme of Amalgamation** to simplify its corporate structure. * **Promoter Consolidation:** Several entities (MVA Finance, Inder Overseas, etc.) merged into **Arihant Exports Private Limited**. * **Ownership:** The promoter group maintains a **65.87%** stake. The restructuring eliminated cross-holdings and reduced administrative overhead. * **Leadership Continuity:** **Mr. Satya Prakash Gupta** has been re-appointed as Director (Operations) until **May 2027** to ensure technical stability. --- ### **Risk Profile & Mitigation Strategies** PAL operates in a high-exposure environment due to its reliance on global commodity markets. #### **Primary Risks** * **Raw Material Dependency:** **Acrylonitrile (ACN)**, a crude oil derivative, is **100% imported** and accounts for **~62% of total costs**. The lead time of **~5 months** creates significant price volatility risk. * **Geopolitical Disruptions:** Conflicts in the Middle East and Ukraine have caused logistics failures, including a **15-20 day delay** in shipments that forced a temporary plant shutdown in **March 2026**. * **Regulatory Risk:** Ethanol pricing is controlled by OMCs; the company is vulnerable to "abrupt recalibrations" in government blending policies. #### **Mitigation & Credit Strength** * **Hedging:** Employs **Green Back Advisory Services** for currency and commodity hedging. * **Liquidity:** Maintains a healthy cash balance of **₹122.83 crore**. * **Credit Ratings (as of July 2025):** * **Long Term:** **CARE BBB+; Stable** * **Short Term:** **CARE A2** * **Working Capital:** Managed through a cycle of **51 days**, utilizing Letters of Credit (LC) with credit periods of **90–180 days**. --- ### **Future Growth Outlook** PAL is positioned to benefit from India’s **E20 blending targets** and the global shift toward sustainable packaging. Management is currently focused on: 1. **Stabilizing Ethanol Operations:** Navigating feedstock price volatility (maize/rice) and climatic impacts on grain availability. 2. **Market Expansion:** Increasing the export footprint beyond current markets in **Dubai, Peru, Thailand, Brazil, and Poland**. 3. **New Frontiers:** Exploring long-term opportunities in **aviation biofuels** and **bio-based chemicals**.