Project Meridian
Executive summary
Project Meridian is a partnership-run manufacturer of specialty paper and packaging materials in western India, supplying FMCG, textile and ceramic converters. The managing promoter plans to retire and is offering the operating business: plant, machinery, business contacts and a structured handover. This summary sets out three audited years, including the items that need explanation.
Turnover was ₹9.80 cr in FY23, ₹7.08 cr in FY24 and ₹12.24 cr in FY25. Inter-state supply rose from under 1% of billings to 71% over the same period.
Reported profit before tax was ₹0.21 cr, ₹0.48 cr and ₹0.30 cr, against borrowings of ₹6.78 cr at 31 March 2025.
The business is not debt-free, and its FY25 result carries two large one-off entries, both bridged in section 09.
FY23 to FY25 accounts, tax-audit annexures and management certificates, under two different statutory auditors.
Basis of preparation
All figures come from the audited accounts and tax-audit annexures for FY 2022-23, FY 2023-24 and FY 2024-25, for one standalone partnership firm, before tax and as reported. EBITDA is profit before tax plus depreciation plus interest on borrowings booked in the profit and loss account. No headline figure is normalised.
FY 2025-26 closed on 31 March 2026 and is not in the pack. Management indicates turnover of about ₹14 crore for that year; it is unaudited, unverified and used nowhere in this document.
Investment highlights
Turnover recovered to a new high
FY25 turnover of ₹12.24 cr is 73% above FY24 and 25% above FY23. Growth came entirely from inter-state supply; within-state billing fell 33%.
+73% year on yearGross margin near 20%
Gross margin was 21.4% in FY24 and 19.8% in FY25, against 14.3% in FY23, on the tax auditor’s basis. It held while turnover rose 73%.
19.8% in FY25Sales reach beyond the local cluster
Inter-state supply was 71% of FY25 gross billings, from 28% in FY24 and under 1% in FY23. Export was 0.6% in FY25.
71% inter-stateTwo coating lines and utilities in place
Two coating lines bought in 2017 and 2020, with a boiler, a thermic-fluid heater, overhead cranes, a weighbridge and about 85,000 sq ft of buildings. Audited additions were ₹1.4 lakh in FY24 and nil in FY25.
45 t/day at 100 GSM (mgmt)Two structures and a structured handover
The managing promoter retires and offers all business contacts plus training of the buyer. The 1.75-acre site is self-owned and can be sold with the business or let to the buyer for five years.
1.75 acres, self-ownedBusiness overview
Meridian coats and converts paper for packaging, textile-printing and industrial customers. Management describes four product lines; the audited accounts do not split turnover by product. The only revenue split the accounts support is by supply type, shown below.
White kraft liner
Liner for packaging and converting customers. Management-stated line; volume and revenue are not recorded separately.
Sublimation paper
Coated transfer paper for textile printing. Management describes two coating lines on site (section 05).
Barrier paper
Coated paper for moisture and grease resistance. Management-stated; coating-input purchases fell sharply in FY25 (section 06).
Thermal paper
Heat-sensitive coated paper. Management-stated; no product-level data is in the pack.
Business model & economics
Meridian buys base paper, coated paper, films and chemicals, converts or resells them, and sells on credit to converters and wholesalers. Margin depends on input cost, the split between own coating and bought-in material, and how long cash stays tied up.
Coated paper, foil and PVC resin cost ₹8.47 cr of ₹10.38 cr purchased. Coating chemicals, binder and kaolin cost ₹0.12 cr.
21.4% in FY24 and 14.3% in FY23 on the tax auditor’s basis: turnover less materials, direct cost and stock movement.
₹4.31 cr of receivables against ₹12.24 cr of turnover; 128 days in FY23 and 231 days in FY24.
The table converts year-end balances into days of turnover, cost of sales and purchases.
| FY 2022-23 | FY 2023-24 | FY 2024-25 | |
|---|---|---|---|
| Inventory (days of cost of sales) | 160 | 232 | 175 |
| Receivables (days of turnover) | 128 | 231 | 128 |
| Payables (days of purchases) | 69 | 190 | 103 |
| Cash cycle | 219 | 272 | 200 |
Sales commission was ₹15.7 lakh in FY25 (1.3% of turnover) and ₹15.5 lakh in FY24 (2.2%). Power cost ₹39.3 lakh is 3.2% of turnover. Contract terms, price pass-through clauses and customer credit terms are not in the pack.
Operations & capacity
The plant runs from a self-owned 1.75-acre site with about 85,000 sq ft of buildings, grid power and piped gas. Management describes two coating lines with the supporting plant and utilities below. The audited accounts record costs but not volumes, so utilisation cannot be derived from them.
Site photographs
The table lists the coating lines and supporting plant as furnished by management, with year of purchase and value.
| Asset | Year | Specification | Value |
|---|---|---|---|
| Paper coating line 1 | 2017 | 1950 mm width; 20 t/day at 100 GSM; imported; air knife, 8 dryers, 2-roll calender, pope reel, 2 mixer tanks | 185.00 |
| Paper coating line 2 | 2020 | 1950 mm width; 25 t/day at 100 GSM; imported; air knife and blade coater, 9 + 2 dryers, 3-nip calender, pope reel, adhesive cooker | 160.00 |
| Rewinder | 2017 | 3000 mm; jumbo and tambour rolls; 10 tambour rolls | 35.00 |
| Slitter rewinders (2) | 2020 | 75 inch; automatic meter counter and cut-off | 10.00 |
| Overhead cranes (2) | 2017 and 2020 | 7 ton each | 10.00 |
| Forklifts (2) | 2013 and 2021 | 3 ton each; one with forks, one with roll clamp | 14.00 |
| Boiler | 2019 | 5 ton; auto coal feeder; wood-fired at present | to be confirmed |
| Thermic-fluid heater | 2022 | 20 lac kcal; dual-fuel burner | to be confirmed |
| Values furnished, excluding boiler and heater | 414.00 |
Capacity
Management gives 20 t/day for line 1 and 25 t/day for line 2 at an anchor 100 GSM, 45 t/day combined, and cites about 50 t/day for the plant as a whole. Neither figure is verified and FY25 volumes are not recorded, so a buyer’s technical team will need to measure throughput on site.
Inputs & supply chain
Purchases moved in FY25 away from kraft base paper and coating chemicals towards bought-in coated paper, foil and resin. Year-end supplier balances now sit with far fewer counterparties.
The table shows what each input group cost in each year.
| FY 2022-23 | FY 2023-24 | FY 2024-25 | |
|---|---|---|---|
| Kraft base paper | 442.34 | 255.28 | 110.60 |
| Coated paper (bought in) | 0.00 | 120.59 | 577.65 |
| Foil and PVC resin | 0.00 | 0.00 | 269.78 |
| Coating chemicals, binder, kaolin | 159.80 | 50.63 | 11.87 |
| Fuel and gas | 29.86 | 43.18 | 17.80 |
| Other (incl. inter-state purchases not itemised) | 21.33 | 4.76 | 50.77 |
| Total purchases | 653.33 | 474.44 | 1,038.47 |
₹159.8 lakh in FY23 to ₹11.9 lakh in FY25, while bought-in coated paper, foil and resin reached ₹847.4 lakh. The coating line is still on the asset register.
Customer mix & concentration
Customers are converters and wholesalers in packaging, textile printing and ceramics, who reorder as their own production runs require. Customer-level billing is not in the audited pack, so this section works from year-end receivable balances; billing by customer will be provided in the data room.
The table gives every open receivable account under a fixed code, so growth and exit are visible.
| Account | FY23 | FY24 | FY25 | FY24→FY25 |
|---|---|---|---|---|
| A | – | – | 123.13 | new |
| B | 121.52 | 121.52 | 121.52 | 0.0% |
| C | – | – | 111.32 | new |
| D | – | 40.66 | 42.98 | +5.7% |
| E | – | – | 20.84 | new |
| F | – | 2.98 | 4.92 | +64.9% |
| G | 8.43 | 4.93 | 2.93 | −40.6% |
| H | – | – | 1.83 | new |
| I | 0.63 | 0.63 | 0.63 | 0.0% |
| J | 0.61 | 0.61 | 0.61 | 0.0% |
| Accounts open in earlier years, nil at 31 Mar 2025 | 211.26 | 275.92 | – | −100% |
| Trade receivables | 342.44 | 447.24 | 430.70 | −3.7% |
Concentration
Customers A, B and C hold 83% of receivables. B’s balance of ₹121.5 lakh has not moved since March 2023, and A and C were not on the ledger a year earlier. What reduces the risk: five further accounts, D to H, are open, and supply now reaches buyers outside the home state.
Customer-level billing will show whether A, C and E are repeat buyers or one-off supply. It is the first item a buyer will request.
Financial snapshot
The three audited years show a dip in FY24 and a recovery above the FY23 level in FY25. Every table below uses the audited line items, unadjusted.
The table sets the audited profit and loss lines side by side.
| FY 2022-23 | FY 2023-24 | FY 2024-25 | |
|---|---|---|---|
| Turnover | 980.26 | 708.04 | 1,224.01 |
| Other income | 0.41 | 1.02 | 137.54 |
| Variation in stock | (123.33) | (15.23) | 117.32 |
| Purchases | (653.33) | (474.44) | (1,038.47) |
| Direct expenses | (63.33) | (66.52) | (60.88) |
| Administrative expenses | (85.23) | (75.27) | (324.12) |
| of which interest on borrowings | 61.32 | 50.33 | 62.39 |
| of which bad debts | 6.29 | 0.00 | 237.19 |
| Profit before depreciation | 55.46 | 77.59 | 55.41 |
| Depreciation | (34.76) | (30.05) | (25.63) |
| Profit before tax | 20.70 | 47.54 | 29.77 |
| Reported EBITDA | 116.78 | 127.92 | 117.79 |
| EBITDA margin | 11.9% | 18.1% | 9.6% |
Turnover grew at a 11.7% CAGR from FY23 to FY25 after a 27.8% fall in FY24. Partners’ capital rose from ₹2.90 cr to ₹3.50 cr, while borrowings moved from ₹6.48 cr to ₹6.78 cr. Fixed assets fell from ₹2.05 cr to ₹1.51 cr as depreciation outran additions.
Weakest metric
Net debt is 5.3x reported EBITDA at March 2025 (5.7x at March 2024). Finance cost of ₹62.4 lakh takes 53% of reported EBITDA, and interest cover has held at about 1.9x in each of the three years.
Quality of earnings
EBITDA here is profit before tax plus depreciation plus interest on borrowings booked in the profit and loss account; profit before tax is before any tax provision, because firm-level income tax is charged to partners’ capital.
The table bridges reported earnings to earnings before the two large FY25 entries, and FY24 profit to a basis with all loan interest included.
| FY24 | FY25 | |
|---|---|---|
| Reported EBITDA | 127.92 | 117.79 |
| Less: creditor balances written back | – | (136.48) |
| Add: receivables written off | – | 237.19 |
| EBITDA before the two items | 127.92 | 218.50 |
| as % of turnover | 18.1% | 17.9% |
| Reported profit before tax | 47.54 | 29.77 |
| Less: loan interest charged to partners’ capital | (17.40) | – |
| Profit before tax, all interest in the P&L | 30.13 | 29.77 |
The creditor write-back is non-recurring and is removed. The receivable write-off is added back because FY23 and FY24 carry no comparable charge (₹6.3 lakh and nil), but it reverses earlier-year revenue, so read the two-year total: reported profit before tax of ₹0.77 cr across FY24 and FY25, or ₹0.60 cr with all loan interest included.
Cash conversion
No cash-flow statement is in the pack, so operating cash flow against EBITDA is not derived. Closing stock rose ₹117.3 lakh in FY25, 3.9 times reported profit before tax.
Add-backs left out
Sales commission of ₹15.7 lakh recurs. No partner remuneration is booked, so a buyer will add a management salary; the cost is not quantified here.
Capex cycle
Additions were ₹1.4 lakh in FY24 and nil in FY25, against depreciation of ₹25.6 lakh. No refit or maintenance programme appears in the accounts.
Perimeter
One standalone partnership firm in all three years, with no subsidiaries. The statutory auditor changed from FY24, and stock is labelled traded goods from FY24 where earlier years show raw material and finished goods.
Related parties
₹169.8 lakh is due from one partner, 87% of loans and advances. Unsecured loans of ₹61.0 lakh come from two individuals. The tax audit reports no related-party payments in FY24 or FY25.
Recency
The latest audited year ended 31 March 2025 and was signed in October 2025. FY26 has since closed and is not in the pack (section 01).
Management & organisation
Four partners own the firm, in the profit shares below. The pack describes no manager, employee count or organisation chart.
| Role | Profit share | Capital, 31 Mar 2025, ₹ lakh |
|---|---|---|
| Partner (1), managing promoter and signatory | 32% | 137.14 |
| Partner (2) | 35% | 93.60 |
| Partner (3) | 17% | 111.67 |
| Partner (4) | 16% | 7.94 |
| Total | 100% | 350.35 |
Books are computerised and the accounts are audited under section 44AB by an independent chartered accountant, who changed at FY24. Cash, stock, receivables and fixed assets are certified by the managing partner. FY25 tax-audit observations: supplier MSME status was only partly provided (₹3.68 lakh disallowed under section 43B(h)), and the split of expenditure by GST registration is not maintained.
Key person
One partner signs the accounts and every management certificate, and the client describes him as sole managing owner. His retirement is the reason for sale. Handover of contacts and buyer training are part of the offer; their length and depth have not been set, and no second-line manager is identified.
M&A proposition
The client has indicated two structures. Option A sells the operating business, including the self-owned site, factory building, plant, machinery and inventory. Option B sells the plant and machinery alone and lets the land to the buyer on a five-year rental contract. Both include a handover of business contacts and buyer training.
The managing promoter’s retirement is the stated reason for sale, and the offer includes a handover of contacts and training.
Turnover reached ₹12.24 cr, above the FY23 level of ₹9.80 cr, so the business is offered after a growth year.
Option A sells the site; option B lets it to the buyer for five years. Land is carried at ₹33,014 historic cost, and its market value is not in the pack.
Strategic producer
A specialty-paper or coated-materials producer wanting plant, customer relationships and a working coating line without a greenfield build.
Converter or trader
A packaging-materials converter or trader seeking supply integration; FY25 purchases show ₹8.47 cr already bought in.
Operator-investor
An operator with a plant manager, able to fund a cash cycle of about 200 days and to replace the management the retiring partner provides.
Working capital
Cutting receivable days from 128 to 90 on FY25 turnover frees about ₹1.3 cr. This is arithmetic on audited figures, not a forecast.
In-house coating
FY23 bought ₹159.8 lakh of coating inputs; FY25 bought ₹11.9 lakh. Coating in-house or buying in is a margin choice a buyer can test on the existing line.
Reach
Inter-state supply is 71% of billings and export 0.6%. Export is untested, and no order book or pricing evidence is in the pack.
Use of proceeds
This is a sale by the partners, not a capital raise, so there is no use of proceeds. Treatment of borrowings, the partner balance and working capital will be set in the process letter.
Risks & mitigants
Process & next steps
Process
Important notice. This summary is confidential and is provided by CA Dhiraj Ostwal & Co. solely to help a recipient decide whether to proceed to an NDA. It is not an offer, invitation or recommendation to buy or sell any asset or security, and it forms no part of any contract.
Financial information is taken from audited accounts and tax-audit annexures supplied by the seller. The adviser has not independently verified them, and statements marked “management” are the seller’s own and unverified. No representation or warranty, express or implied, is made as to accuracy or completeness, and no liability is accepted for any loss arising from its use. Recipients must rely on their own enquiries and due diligence. The seller and the adviser may change the process or withdraw at any time without notice.