Home / RPTs / H.R. HYGIENE PRODUCTS LIMITED

H.R. HYGIENE PRODUCTS LIMITED

H. R. Hygiene Products Limited - Related Party Transactions

Introduction

Based on the Red Herring Prospectus dated July 21, 2026, and subsequent filings, here are the “Related Party Transactions” (RPT) details H. R. Hygiene Products Limited.

Business Model Operations

Business Model: The company manufactures and trades hygiene products (Sanitary Napkins, Adult Diapers, Baby Diapers). It follows a Dual-Channel Strategy:

  1. Offline: A network of 25 Consignment Sale Agents (CSAs) and 202 distributors.
  2. Online: Sales through platforms like Amazon, Flipkart, Meesho, and Jiomart (B2B and B2C).


Advances from Customers: Yes, the company receives advances. As of March 31, 2026, Advance Received from Customers stood at ₹129.83 Lakhs.


Raw Materials: Major materials include fluff pulp and Super Absorbent Polymer (SAP).


Sourcing: Sourced from suppliers in the U.S. and India. Imports have decreased significantly from 46.62% of purchases in FY 2024 to 5.74% in FY 2026.


Raw Material Price Volatility: The company is exposed to price fluctuations, which can materially affect margins if costs cannot be passed on to customers.


Key Vendors: The top 10 suppliers contributed 84.57% of purchases in FY 2026. Major suppliers are not individually named in the text, but the company has served over 88 suppliers in FY 2026.


Key Factors Affecting Business: Raw material pricing/supply, reliance on a single manufacturing facility in Rajkot, market competition, and government hygiene initiatives.


Competitive & Regulatory Landscape: The market is highly competitive with global giants like P&G and Unicharm. Regulations include mandatory BIS certification (IS 5405 for sanitary pads) and environmental policies like Extended Producer Responsibility (EPR).


Total Addressable Market (TAM): The Indian hygiene product market was valued at USD 2,258.30 Mn in 2024 and is projected to grow at a CAGR of 7.43% to reach USD 3,463.86 Mn by 2030.


Key Competitors: Unicharm India, Nobel Hygiene, Procter & Gamble (P&G), Kimberly-Clark, and Wellify (Piramal Group).


Order Book: The company generally does business on a purchase order basis and does not maintain a long-term order book contract.


Revenue Mix (Domestic vs. Exports): The business is almost entirely domestic. Export sales were Nil in FY 2026 and FY 2025, after a minor contribution of ₹17.62 Lakhs (0.21%) in FY 2024.


Growth Plans: Setting up a new manufacturing facility (Unit 2) in Rajkot for diaper production with a proposed capacity of 6 crore pieces per annum.


Government Intervention: Highly visible through schemes like the Menstrual Hygiene Scheme and Swachh Bharat, which boost awareness and demand.


Structural vs. Cyclical Trends: Management views the growth as structural, driven by rising hygiene awareness, urbanization, and a shift from cloth to disposable products.

Financial Performance Health

Balance Sheet Health:

  1. Net Worth: Increased from ₹589.54 Lakhs (FY24) to ₹4,238.44 Lakhs (FY26).
  2. Current Ratio: 1.41 in FY 2026, indicating a generally healthy ability to meet short-term obligations, though it decreased from 1.71 in FY 2025.
  3. Trade Receivables: A major concern, increasing by 112% in FY 2026 to ₹10,475.99 Lakhs, primarily due to government contracts.

Operating Cashflows:

  1. FY 2026: ₹157.79 Lakhs
  2. FY 2025: (₹1,008.38) Lakhs (Negative)
  3. FY 2024: ₹229.03 Lakhs.

Customer Concentration: High. The top 10 customers accounted for 80.41% of revenue in FY 2026.

  1. Total Debt (3 Years): Total borrowings (Secured + Unsecured) were ₹2,152.56 Lakhs as of March 31, 2026. The company repaid several NBFC loans in FY 2025 to reduce its leverage ratio to 0.51.

Capital Expenditure (3 Years): Total additions to Property, Plant & Equipment:

  1. FY 2026: ₹44.89 Lakhs
  2. FY 2025: ₹34.68 Lakhs
  3. FY 2024: ₹565.23 Lakhs (Major expansion).

Return on Capital (ROCE): 24.86% in FY 2026, slightly down from 25.48% in FY 2025.


Asset Turnover Ratio: 20.40 times in FY 2026, up from 10.30 times in FY 2024, showing improved efficiency in generating revenue from fixed assets.


Financial Trends (Increasing?):

  1. Sales: Yes, increased from ₹8,434.76 Lakhs (FY24) to ₹13,072.09 Lakhs (FY26).
  2. EBITDA: Yes, increased from ₹757.66 Lakhs (FY24) to ₹1,708.34 Lakhs (FY26).
  3. PAT: Yes, increased from ₹466.41 Lakhs (FY24) to ₹1,140.66 Lakhs (FY26).
  4. Margins: Both EBITDA Margin (8.98% to 13.07%) and PAT Margin (5.53% to 8.73%) are increasing.


Why they are increasing: Driven by a shift toward higher-margin Own Brand sales (94.47% of revenue in FY26 vs 5.37% in FY24) and cost optimization.


Free Cash Flow & Conversion Analysis


Analysis of the Conversion %

  1. The EBITDA to CFO conversion percentage is not increasing consistently across the three-year period.
  2. It experienced a significant decline from 30.23% in Fiscal 2024 to -68.29% in Fiscal 2025, primarily due to negative operating cash flows driven by working capital changes, specifically an increase in trade receivables.
  3. The ratio improved in Fiscal 2026 to 9.24%, recovering from the previous year's negative conversion, but it remains well below the levels seen in Fiscal 2024.

Risks Management Outlook

Legal Cases:

  1. Against the Company: 9 tax proceedings involving ₹381.95 Lakhs. This includes a major Income Tax demand of ₹374.96 Lakhs for A.Y. 2025-26.
  2. Against Promoters: One Income Tax demand against Sheradia Parth Damjibhai for ₹1.32 Lakhs.


Key Business Risks:

  1. Product Concentration: 95.33% of revenue comes from Sanitary Napkins.
  2. Geographic Concentration: 77.02% of revenue is from Gujarat.
  3. Working Capital: High trade receivables (₹10,475.99 Lakhs) strain liquidity.


Red Flags:

  1. Negative Operating Cash Flow in FY 2025.
  2. Heavy Customer Concentration (Top 10 = 80.41% of sales).
  3. Significant Related Party Transactions (11.9% of revenue involved purchases from a sister concern).
  4. Unsecured loans from promoters are repayable on demand, which could cause a liquidity crisis if recalled.


Debtors Age Analysis (FY 2025-26):

  1. Less than 6 months: ₹6,899.17 Lakhs
  2. 6 months - 1 year: ₹259.52 Lakhs
  3. 1-2 years: ₹2,935.30 Lakhs (Significant amount)
  4. More than 3 years: ₹244.07 Lakhs.

Disclaimer

This document is meant for the recipient only for use as intended and not for circulation. This document should not be reproduced or copied or made available to others. Recipients may not receive this report at the same time as other recipients. The information contained herein is from the public domain or sources are believed to be reliable. While reasonable care has been taken to ensure that information given is at the time believed to be fair and correct and opinions based thereupon are reasonable, due to the very nature of research it cannot be warranted or represented that it is accurate or complete and it should not be relied upon as such. In so far as this report includes current or historical information, it is believed to be reliable, although its accuracy and completeness cannot be guaranteed. Opinions expressed are current opinions as of the date appearing on this material only. While we endeavour to update on a reasonable basis, the information discussed in this material, Mr Avinash Gorakshakar is under no obligation to update or keep the information current. Further there may be regulatory, compliance, or other reasons that prevent me from doing so. Prospective investors and others are cautioned that any forward-looking statements are not predictions and may be subject to change without notice. Avinash Gorakshakar and any person connected with it, will not in any way be responsible for the contents of this report or for any losses, costs, expenses, charges, including notional losses/lost opportunities incurred by a recipient as a result of acting or non-acting on any information/material contained in the report. This is not an offer to sell or a solicitation to buy any securities or an attempt to influence the opinion or behaviour of investors or recipients or provide any investment/tax advice. This report is for information only and has not been prepared based on specific investment objectives. The securities discussed in this report may not be suitable for all investors. Investors must make their own investment decision based on their own investment objectives, goals and financial position and based on their own analysis. Trading in stocks, stock derivatives, and other securities is inherently risky and the recipient agrees to assume complete and full responsibility for the outcomes of all trading decisions that the recipient makes, including but not limited to loss of capital. Opinions, projections and estimates in this report solely constitute the current judgment of the author of this report as of the date of this report and do not in any way reflect the views of Avinash Gorakshakar. The securities described herein may or may not be eligible for sale in all jurisdictions or to certain category of investors. Persons in whose possession this document may come are required to inform themselves of and to observe such restriction.

SEBI REGN NO. INH000001071