Renol Polychem IPO

The company claims to offer a wide range of products, which enables it to cater to customers across India and extend its presence in international markets.

The company claims to have implemented several cost-efficiency measures, including building strong relationships with vendors for raw material procurement, sourcing materials locally to reduce transportation expenses, focusing on engineering improvements, reducing response time to customer needs, and enhancing after-sales support.

The company states that its products are designed to deliver high performance using lower quantities of masterbatch, which helps manufacturers (especially those producing PVC and UPVC pipes) reduce overall production costs while maintaining product quality.

The company observed a consistent increase in its profit after tax (PAT). It increased from Rs 0.73 crore in FY23 to Rs 1.53 crore in FY24 and Rs 5.00 crore in FY25.

The company manufactures raw materials used in plastic products, which are subject to strict environmental regulations. Any sudden changes in government policies or increased restrictions on plastic usage could adversely impact its business operations and financial performance.

The cost of raw materials accounted for 82.13% of the company’s total revenue in the period ended May 31 2025, 84.31% in FY25, 82.80% in FY24 and 92.01% in FY23. Any sudden increase in raw material prices could lead to higher manufacturing costs, which could hurt the company’s profitability.

The company’s top 10 customers accounted for Rs 4.12 crore (34.36%) of the company’s total revenue in the period ended May 31, 2025, and Rs 18.13 crore (29.10%) in FY25, Rs 19.89 crore (38.05%) in FY24 and Rs 14.25 crore (34.23%) in FY23. Any failure to retain these key customers, expand the customer base, or a loss of business from these clients can adversely affect the company’s business and financial standing.

The company reported negative cash flows from operating activities amounting to Rs 1.09 crore in the period ended May 31, 2025, and Rs 1.24 crore in FY25 and Rs 1.11 crore in FY23. Additionally, negative cash flows from investing activities amounted to Rs 0.04 crore in the period ended May 31, 2025, Rs 0.40 crore in FY25 and Rs 0.35 crore in the period April 1, 2023, to February 17, 2024. The company also reported negative cash flows from financing activities amounting to Rs 1.74 crore in the period ended May 31, 2025, Rs 0.30 crore in the period February 17, 2024, to FY24 and Rs 0.08 crore in April 1, 2023, to February 17, 2024. If cash outflows continue to exceed inflows, the company may face liquidity challenges in the future.

The company derives a significant portion of its revenue from a variety of products. These products accounted for Rs 9.98 crore (83.18%) of the company’s total revenue in the period ended May 31, 2025, and Rs 51.46 crore (82.60%) in FY25, Rs 39.13 crore (74.86%) in FY24 and Rs 29.33 crore (70.38%) in FY23. Any adverse changes in the product quality or a decrease in demand for them could adversely affect the company’s operations and financial performance.

The top 10 suppliers accounted for Rs 33.89 crore (61.53%) of the company’s total raw material purchases in FY25, Rs 35.44 crore (74.88%) in FY24 and Rs 34.28 crore (84.83%) in FY23. Any disruption in supplies from one or more of these suppliers could adversely affect the company’s business and finances.

The company observed a significant increase in its trade receivables. It increased to Rs 12.36 crore in the period ended May 31, 2025, from Rs 8.97 crore in FY25. Any failure to collect these receivables on time or at all can negatively impact the business and its financial condition.

As of May 31, 2025, the company has total borrowings amounting to Rs 5.28 crore. Any failure to service or repay these loans can harm the company’s operations and financial position.