💰 Financial Performance

Revenue Growth by Segment

Total Operating Income (TOI) grew at a 5-year CAGR of 7.79% reaching INR 181.56 Cr in FY24. However, revenue declined 5% YoY from INR 191.09 Cr in FY23 due to a reduction in sales volume and realization of Di-calcium phosphate (DCP). 9MFY25 revenue stood at INR 139.15 Cr.

Geographic Revenue Split

Not disclosed in available documents, though the manufacturing facility is located in Jabalpur, Madhya Pradesh, and DCP is sold to local customers.

Profitability Margins

Profitability has shown an upward trend over the last three years. PBILDT margin improved by 127 bps to 11.58% in FY24 from 10.31% in FY23. 9MFY25 provisional PBILDT margin further improved to 12.28%. PAT for FY24 was INR 15.90 Cr (8.75% margin) compared to INR 16.69 Cr (8.73% margin) in FY23.

EBITDA Margin

PBILDT margin was 11.58% in FY24, up from 10.31% in FY23. The improvement is attributed to synergy benefits from the Pioneer Jellice Group (PJG) acquisition and better operational efficiency despite volatile raw material costs.

Capital Expenditure

The company has planned a total capex of INR 33.30 Cr over two years (FY25: INR 16.64 Cr and FY26: INR 16.66 Cr). This includes machinery upgrades and the installation of a 2.15 MW solar plant for captive consumption to reduce power costs.

Credit Rating & Borrowing

Assigned CARE BBB; Stable for long-term facilities (INR 16.40 Cr) and CARE BBB; Stable / CARE A3+ for long-term/short-term facilities (INR 21.60 Cr). Borrowing costs are linked to bank facilities with an interest coverage ratio of 81.14x in FY24 and 20.11x in 9MFY25.

⚙️ Operational Drivers

Raw Materials

Crushed animal bones are the primary raw material. The market is highly unorganized, making margins susceptible to price fluctuations based on slaughtering rates and bone meal movement.

Import Sources

Primarily sourced domestically from unorganized markets; however, manufacturers are expected to import raw materials in FY26 as European bone-based gelatine production decreases.

Key Suppliers

Not disclosed in available documents, but the market is described as highly unorganized.

Capacity Expansion

Current capacity includes 2,400 MT per annum for Gelatine and 10,600 MT per annum for Di-calcium phosphate (DCP). Planned capex of INR 33.30 Cr aims to enhance manufacturing capacity and upgrade machinery by FY26.

Raw Material Costs

Raw material costs are volatile; availability fluctuated in FY24 due to lower slaughtering rates. Prices are expected to decrease in FY26 due to reduced demand from European gelatine producers.

Manufacturing Efficiency

Machinery upgrades and solar plant installation are expected to reduce operational costs and improve production efficiency. Average bank line utilization was 65% for the six months ending February 2025.

📈 Strategic Growth

Expected Growth Rate

7.79%

Growth Strategy

Growth will be driven by synergy benefits from the Pioneer Jellice Group (75% stake), capacity expansion through an INR 33.30 Cr capex plan, and a strategic 14% stake in India Gelatine & Chemicals Limited (IGCL) to increase market influence.

Products & Services

Manufacturing and sale of Gelatine (used in pharma/capsules), Di-calcium phosphate (DCP), and Ossein.

Brand Portfolio

Narmada Gelatines Limited (NGL).

New Products/Services

Not disclosed in available documents beyond existing gelatine and DCP lines.

Market Expansion

Expansion is targeted through machinery upgrades and capacity increases at the Jabalpur facility, alongside synergies with the global Pioneer Jellice Group.

Market Share & Ranking

Not disclosed in available documents, but the company has a 50-year track record in the industry.

Strategic Alliances

Acquired by Pioneer Jellice Group (PJG) in June 2023 (75% stake). NGL also acquired a 14% stake in India Gelatine & Chemicals Limited (IGCL) in December 2024.

🌍 External Factors

Industry Trends

The industry is seeing a shift toward plant-based (vegan) gelatine substitutes. Traditional gelatine growth is currently challenged by these alternatives and religious restrictions.

Competitive Landscape

Competes with traditional gelatine manufacturers and increasingly with producers of vegetarian/vegan substitutes.

Competitive Moat

Moat is built on a 50-year operational track record and strong relationships with major pharmaceutical capsule manufacturers, providing repeated orders.

Macro Economic Sensitivity

Sensitive to slaughtering rates and livestock availability, which impact raw material (bone) prices.

Consumer Behavior

Shift toward veganism and vegetarianism is reducing demand for animal-bone-based gelatine products in certain segments.

Geopolitical Risks

Reduced bone-based gelatine production in Europe is expected to lower global raw material prices in FY26, benefiting Indian manufacturers who import.

⚖️ Regulatory & Governance

Industry Regulations

Operations are subject to cultural and religious restrictions regarding animal-derived products, which can limit market expansion.

Environmental Compliance

Installing a 2.15 MW solar plant for captive consumption to improve energy sustainability.

⚠️ Risk Analysis

Key Uncertainties

Vulnerability to raw material price volatility (crushed animal bones) and the threat of product substitution by vegan alternatives could impact margins by more than 10% if not managed.

Geographic Concentration Risk

Manufacturing is concentrated at a single facility near Jabalpur, Madhya Pradesh.

Third Party Dependencies

High dependency on the unorganized bone collection market for raw materials.

Technology Obsolescence Risk

Risk of traditional gelatine becoming less relevant due to the rise of plant-based technology; company is mitigating this through machinery upgrades.

Credit & Counterparty Risk

Adequate; customer base includes reputed pharmaceutical companies like ACG Associated Capsules and Geltec.