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Acknit Industries Ltd. has had its long-term credit rating confirmed at BBB (Stable) and its short-term rating at A3+ by credit agency ICRA. This decision covers the company's ₹93.22 crore in banking facilities and indicates ICRA's sustained confidence in Acknit's financial standing.
The stable outlook on the long-term rating reflects ICRA's view of Acknit's ability to meet its debt obligations. However, the agency also noted ongoing concerns regarding margin pressure and the need for high working capital.
Such credit ratings serve as a vital indicator for lenders and investors, affirming Acknit Industries' financial reliability. A stable rating helps the company maintain access to essential credit lines and can facilitate more favorable terms for future financing.
Acknit Industries, established in 1990 and based in Kolkata, is a manufacturer and exporter of industrial gloves and garments. Over 90% of its output is directed to European markets. ICRA has consistently maintained these ratings for Acknit since at least March 2023, with recent confirmations in March and July 2025.
Despite a recovery in revenue in FY2025 and plans for a ₹20 crore capital expenditure to establish a new unit for coated gloves, the company faced challenges. Revenue declined by 8% in FY2024, reaching approximately ₹219 crore, largely due to a global economic slowdown impacting key export markets in the US and Europe. Intense competition and significant working capital requirements continue to pressure margins and liquidity.
In October 2025, Acknit Industries announced the closure of a segment of its Falta SEZ Unit-1. This move was attributed to increased US tariffs, though the company anticipates minimal overall impact on its operations.
The reaffirmation of its ratings is expected to bolster lender confidence in Acknit's debt servicing capabilities. It strengthens the company's position in securing new or refinancing existing debt on favorable terms, reinforcing its market perception of financial stability, even as underlying business challenges persist. Lenders will continue to closely monitor the company's performance against its debt obligations.
ICRA retains the right to review or change ratings should circumstances affecting debt servicing capability shift. Investors and stakeholders should monitor several factors, including continued margin pressure from competition and client bargaining power, the vulnerability of profitability to foreign currency fluctuations, and the effective management of high working capital intensity impacting liquidity. The full impact of the Falta SEZ unit segment closure and execution risks associated with the new ₹20 crore coated gloves manufacturing unit are also key areas to watch.
For the fiscal year 2024, Acknit Industries reported revenue of approximately ₹219 crore, a decrease from prior periods but showing signs of partial recovery in fiscal year 2025. Operating Profit Margin (OPM) for the first nine months of fiscal year 2026 stood at 6.5%, a slight dip from 7.0% in the same period of fiscal year 2025, aligning with a historical range of 6-7%. Total revenue for the nine months of fiscal year 2026 was around ₹174 crore.
Acknit Industries competes with other safety wear manufacturers such as Jarsh Safety, KARAM, and Mallcom. Direct credit rating comparisons for these peers were not readily available.
Looking ahead, ICRA will conduct its next surveillance of Acknit's credit ratings within the year. Key areas for tracking include Acknit's ability to maintain its financial profile amidst market challenges and its planned expansion, the performance of the new coated gloves manufacturing unit once operational, the ongoing impact of US tariffs and global economic conditions on export revenues, and management's strategies for addressing working capital intensity and margin pressures.