CRISIL SME Tracker: Working capital woes continue to hobble leather MSEs

Delays in Goods and Services Tax refunds aggravated the problem, resulting in estimated working capital days of 125 days in the last fiscal

For micro and small enterprises (MSEs) in the leather sector, the stretch in working capital requirements that began in fiscal 2017 continues even today, a CRISIL analysis of MSEs with a turnover of less than Rs 250 million — most of them exporters — shows.

MSEs account for about 85 per cent of the leather industry’s production.

Intense competition, raw material shortage and reduction in duty drawback had resulted in an increase in working capital days to 119 in fiscal 2017, from 62 in 2015.

Delays in Goods and Services Tax refunds aggravated the problem, resulting in estimated working capital days of 125