Bhavik Enterprises IPO

The company claims to have a wide product portfolio in polyethylene (PE) and polypropylene (PP), which are used in varied industries such as packaging, agriculture, and infrastructure. Its range covers different grades like LLDPE, LDPE, HDPE, MLLDPE, homo polymer, impact co-polymer, and random co-polymer.

The company claims to operate 11 warehouses and 12 depots across Gujarat, Maharashtra, Daman, and Silvassa. These facilities are said to be well connected by road, rail, and air, which the company believes reduces transportation costs, saves spillages, and improves its distribution efficiency.

The company claims to have a debt-free structure. This reduces the risks and cost of borrowing, giving it more flexibility to reinvest in its operations and pursue growth opportunities.

The company is ISO 9001:2015 certified for quality management systems.

The company has seen a consistent increase in revenue from operations from Rs 487.26 crore in FY23 to Rs 494.12 crore in FY24 to Rs 527.27 crore in FY25.

The company has reported a consistent decrease in profit after tax (PAT). It decreased from Rs 15.56 crore in FY23 to Rs 7.89 crore in FY24 and Rs 5.68 crore in FY25. This is despite a consistent increase in revenue from operations. Continued declines in PAT could adversely affect investor confidence and the company’s overall financial stability.

The company’s top 5 suppliers accounted for Rs 532.07 crore (99.65 percent) of the company’s total cost of material consumed in FY25, Rs 431.53 crore (99.82 percent) in FY24, and Rs 425.58 crore (99.55 percent) in FY23. Any disruption in supplies from one or more of these suppliers could adversely affect the company’s business and finances.

The company’s operations are concentrated in Gujarat, and it derives significant revenue from the state. It accounted for Rs 244.89 crore (45.21 percent) of the company’s total revenue in FY25, Rs 214.40 crore (43.39 percent) in FY24, and Rs 193.75 crore (39.76 percent) in FY23. Any political, social, or economic developments in this region or any sudden regulatory restrictions could adversely affect the company’s business operations and finances.

Any adverse changes in regulations related to plastic usage in India could materially affect the company’s operations. Many governments, including India, are implementing policies to limit or ban certain types of plastic products. If any key plastic materials traded or used by the company are restricted, it may impact the company’s business and finances.

The company relies heavily on imports for its raw materials. In FY25, FY24, and FY23, import purchases accounted for 99.47 percent, 99.60 percent, and 98.54 percent of total purchases, respectively. Regulatory restrictions on imports, including anti-dumping duties or changes in trade policies, could adversely impact the company’s ability to source materials.

The company reported negative cash flows from operating activities amounting to Rs 32.96 crore in FY25 and Rs 2.77 crore in FY24, primarily due to an increase in trade receivables, inventories, short-term loans & advances, trade payables, and a decrease in other current liabilities. It also experienced negative cash flows in investing activities, amounting to Rs 1.53 crore in FY25 and Rs 1.46 crore in FY23 on account of purchases of fixed assets, sale of investments, advance given against property purchase, and interest income. It also reported a minimal negative cash flow from financing activities. If these negative cash flows persist, it could adversely affect the company's ability to meet its working capital needs or repay loans without raising additional external financing, thereby impacting its financial condition and operations.

As of FY25, the company had trade receivables of Rs 60.17 crore, up sharply from Rs 34.65 crore in FY24. If these receivables are not collected on time or at all, it can negatively impact the business and its financial condition.

The company derives a major portion of its revenue from its top 10 customers. It accounted for Rs 125.50 crore (23.80 percent) of the company’s total revenue in FY25, Rs 111.07 crore (22.48 percent) in FY24, and Rs 151.44 crore (31.08 percent) in FY23. Loss of these customers or a decline in business from them could adversely affect the company’s finances and operations.

The company, its directors, promoters, subsidiaries, and group entities are involved in various legal proceedings, including tax and criminal cases. Any adverse judgment in any of these cases could be detrimental to the company’s business prospects.

As of FY25, the company had contingent liabilities amounting to Rs 25.57 crore. If any of these contingent liabilities materialise, it could adversely affect the company’s financial condition.