Swashthik Plascon Limited

Business overview Swashthik Plascon Limited (SPL) is engaged in the manufacturing, importing, exporting, and trading of a diverse range of plastic products, including PET, HDPE, LDPE, plastic polymers, Polystrene, PVC, and Nylon synthetic rubber. The company's key product categories include Pharma Pet Bottles, Liquor Pet Bottles, Other Corporate Pet Products, and Preforms Bottles. SPL primarily serves B2B customers in sectors such as pharmaceutical, liquor, and corporate, operating across both domestic and international markets.

Key facts (FY 2025-26)

• Revenue Mix by Product (Standalone): Liquor Pet Bottles contributed 28.49%, Preforms Bottles 26.43%, Pharma Pet Bottles 25.60%, Other Corporate Pet Products 17.87%, and Trading Products 1.61% of the total standalone operating income.
• Scale: The company reported a standalone income from operations of Rs. 5033.66 Lakhs and a consolidated income from operations of Rs. 15339.33 Lakhs for FY 2025-26.
• Subsidiary: Swashthik Preforms Private Limited is a wholly-owned subsidiary of the company.
• Promoters: Key promoters include Mr. Mahendrakumar Gautam (Managing Director), Mr. Parasmal Mahendra Kumar (Chairman cum Non-Executive Director), Mrs. Mahendrakumar Nirmala (Non-Executive Director), and Mr. Parasmal Ravindra Kumar (Non-Executive Director).

Recent developments (from AR FY 2025-26)

• SPL was listed on the BSE SME platform on December 05, 2023, following an Initial Public Offer (IPO).
• The Board approved significant related party transactions for FY 2026-27, involving sales and purchases of raw materials and finished goods, and rent with entities such as Swashthik Preforms Private Limited (up to Rs. 60 Crore), Swashthik Industries (up to Rs. 60 Crore), Swashthik Pet Packaging (up to Rs. 45 Crore), Paalaghad Pet Bottle (up to Rs. 20 Crore), and Swashthik Poliemers (up to Rs. 50 Crore).
• The company is focused on accelerating business growth by developing technologically advanced and more profitable products, alongside efforts in productivity, efficiency, and cost reduction.
• Management noted no change in the nature of business during FY 2025-26.
• The Board did not recommend a dividend for FY 2025-26, indicating a focus on reinvestment for future performance.

Key risks flagged by management

• Complex Global Supply-Chain: Operational burdens are increasing due to challenges in managing internal and external resources, traceability, and compliance within global supply chains.
• Uncertain Demand: Economic volatility and cyclical demand fluctuations may impact production, requiring efficient lean capabilities to align inventory with demand.
• External Factors: Performance is susceptible to cybersecurity threats, changes in Information Technology & Security Laws, tax laws, litigation, and the global political and economic environment.

Pros (evidenced in AR FY 2025-26)

• The company demonstrated growth in operational income and profitability, with consolidated PAT increasing to Rs. 804.29 Lakhs in FY 2025-26 from Rs. 695.79 Lakhs in FY 2024-25.
• Key financial ratios improved, with the Operating Profit Margin increasing to 10.80% and Net Profit Ratio to 7.02% on a consolidated basis for FY 2025-26.
• SPL maintains established internal control systems that are considered adequate and effective for orderly business conduct and asset safeguarding.

Cons (evidenced in AR FY 2025-26)

• A significant portion of the company's business involves related party transactions, with proposed transactions for FY 2026-27 representing substantial percentages of the previous year's consolidated turnover.
• The consolidated Current Ratio decreased from 7.76 in FY 2024-25 to 3.48 in FY 2025-26, attributed to changes in current assets and liabilities.
• The auditor highlighted that the company does not use accounting software with an edit log facility as required by rules, preventing an opinion on potential tampering with audit trails.