Sita Agro Food Products

Brickwork Ratings assigns the ratings for the Bank Loan Facilities of Rs. 53.83 Crs. of Sita Agro Food Products

Particulars

Facilities	Amount(Rs.Crs.)	Tenure	Rating	Regulator
Fund Based	53.46	Long Term	BWR BB /Stable Assignment	RBI
Non Fund Based	0.37	Short Term	BWR A4 Assignment	RBI
Grand Total	53.83	(Rupees Fifty Three Crores and Eighty Three lakhs Only)

Note:
1. Please refer to BWR website www.brickworkratings.com for the definition of the ratings
2. Refer to Annexures I, II, and III for details of rated bank loan facilities, debt instruments, and the List of Entities Consolidated RATING ACTION / OUTLOOK

Brickwork Ratings has assigned a long-term rating of BWR BB /Stable and a short-term rating of BWR A4 for the bank facilities of M/s Sita Agro Food Products.

The ratings factor in the proprietors' and key management personnel's decade-long experience in the wholesale and retail trading of food grains and pulses, an improving scale of operations and revenue, adequate liquidity, and comfortable debt metrics. However, the ratings are constrained by risks associated with the working capital-intensive nature of operations, susceptibility to raw material price fluctuations, reliance on monsoons, and the highly competitive and fragmented nature of the industry. Additionally, as a proprietorship, the firm faces risks associated with a limited capital base and the possibility of capital withdrawal, compounded by its nascent stage of operations.

KEY RATING DRIVERS

Credit Strengths:

• Extensive Promoter Experience & Proven Track Record :

  The proprietor and her husband bring a combined experience of close to 23 years in the rice milling and trading industry, demonstrated by their execution capabilities in group entities, M/s Hari Narayan Traders and M/s Narayan Traders. Both group entities showcase strong business operations, with M/s Hari Narayan Traders reporting a healthy turnover of Rs. 74.26 Cr and PAT of Rs. 0.54 Cr. Meanwhile, M/s Narayan Traders reported a Revenue of 96.53 Cr and PAT of 0.72 Cr as per ABS FY 25.

• Strategic Locational Advantage :

  The processing facilities is strategically situated in the "Rice Bowl of Bihar", ensuring abundant access to raw materials. This geographical advantage enables procurement of superior-quality paddy and minimises inward freight and transportation costs, ensuring consistent end-product quality.

Credit Risks:

• Intense Competition in a Fragmented Industry :

  The company operates in a fragmented non-basmati rice segment. Low-entry barrier, minimal setup costs and easy access to raw paddy have led to intense competition, which restrict pricing flexibility and caps profitability margins.

• Susceptibility to Agro-climatic risks and Price volatility :

  Profitability is highly susceptible to fluctuations in paddy prices which is the primary raw material. Procurement costs significantly depends on unpredictable factors such as monsoon adequacy, crop yields, and government policy intervention like minimum support price (MSP).

• Risk related to the constitution of the entity :

  As a sole proprietorship firm, the business is continuously exposed to the risk of capital withdrawal by the owner. Significant withdrawals could lead to cash flow constraints, resulting in liquidity shortages and negatively impact the overall capital structure and net worth of the business.

ANALYTICAL APPROACH - Standalone

As part of its credit rating assessment, BWR has conducted a comprehensive evaluation based on the standalone performance of Sita Agro Food Products as outlined in the Rating Criteria, ensuring a systematic and objective approach to the rating process.

RATING SENSITIVITIES

Going forward, the company's ability to scale up capacity utilisation, expand its operating income and strengthen its overall financial profile will remain key rating sensitivities. 

Positive Factor:

• Sustained operating income growth above Rs.100 Cr in FY27 while achieving net profit margins above 1.00%.
• Improvement in overall leverage metrics with gearing ratio maintained below 3.50x and Total Outside Liabilities to Total Net Worth (TOL/TNW) below 3.00x on a sustained basis.

Negative Factor:

• A significant decline in operating income below Rs. 84.00 Cr or contraction in operating profit margins below 5.00%.
• Further stretch in the cash conversion cycle beyond the projected 228 days in FY27 or a decline in net cash accruals below Rs 2.70 Cr, straining the company's liquidity profile. 

LIQUIDITY INDICATORS - Adequate

The liquidity position of M/s Sita Agro Food Products is assessed as adequate, primarily supported by an adequate debt-servicing capacity and available working capital, despite the high requirements associated with its early stage of operations. In the first eight months of operation, the company reported an operating income of Rs. 42.56 crore and a profit after tax (PAT) of Rs. 0.17 crore on a provisional basis. However, liquidity is limited due to a highly elongated conversion cycle of 291 days (annual conversion cycle of 437 days), indicating that significant funds are tied up in inventory. As a result, the company has a high reliance on working capital limits, with an average monthly utilization rate of 86% and occasional instances of overdrawing.

The liquidity profile is supported by net cash accruals of Rs. 2.70 crore against the current maturity of long-term debt (CPLTD) of Rs. 1.77 crore, yielding a debt service coverage ratio (DSCR) of 1.24 times. Additionally, there is sufficient Cash Credit availability, including warehouse receipt (WHR) limits of Rs. 20.00 crore. The company has a moderate analyzed tangible net worth at Rs.19.60 crore, and an adequate current ratio of 1.39 times.

ABOUT THE ENTITY

M/s Sita Agro Food Products is a sole proprietorship concern established on August 1, 2025, managed and promoted by Smt. Sita Kumari. The firm is engaged in the core business of paddy processing and rice milling, with a primary specialization in the processing of Parboiled Rice. Specifically, the company is involved in the processing of Sonam and Katarni rice varieties, which are also commonly referred to as HMT or BPT. Along with the primary rice output, the company processes valuable milling by-products, including bran and husk, which are then sold to nearby markets and wholesale traders.

Operating in the "rice bowl" area of Bihar provides the company with a distinct strategic advantage, ensuring a rich and abundant availability of raw paddy for sourcing and processing. The plant operates with an installed processing capacity of 8 TPH (160 Tonnes per day) and is integrated with dedicated godowns and warehouse infrastructure for the safe storage of raw paddy and processed finished goods.

ESG Profile

M/s Sita Agro Food Products demonstrates an adequate Environmental, Social, and Governance (ESG) profile based on its operational practices.

Environmental (E): The company is fully compliant with environmental regulations, holding active emission and discharge consent orders from the Bihar State Pollution Control Board. It adheres to standard pollution control norms, including ambient air monitoring, effluent treatment, and water recycling. Additionally, the company demonstrates an effective waste management strategy by repurposing the husk waste produced during processing. 20% of the husk waste is utilised as a power source for its parboiled machine, while the remaining 80% is resold to promote resource efficiency. Long-term environmental risk is adequately managed through ongoing emission control and energy-efficient milling practices.

Social (S): The company utilises a scalable labour model, supplementing its 15 permanent staff (including 5 women workers) with 20–30 contract workers during peak seasons. Workplace safety and fire prevention measures are functional and adequate, as validated by a recent fire audit in May 2026.

Governance (G): As a sole proprietorship, traditional board and committee structures are not applicable. While there is a notable key-person risk tied to the promoter (Sita Kumari) and her husband (Nitesh Singh), this is partially offset by the firm's transparent reporting and satisfactory track record and conduct with its lenders. Furthermore, related party transaction risk is low, given the minimal volume of transactions with group entities.

KEY FINANCIAL INDICATORS (Standalone)

Key Parameters	Units	FY 23 - 24 (Audited - Annual)	FY 24 - 25 (Audited - Annual)	FY 25 - 26 (Provisional - Annual)
Operating Revenue	Rs.Crs.	Not Available	Not Available	42.56
EBITDA	Rs.Crs.	Not Available	Not Available	4.75
PAT	Rs.Crs.	Not Available	Not Available	0.17
Tangible Net Worth	Rs.Crs.	Not Available	Not Available	16.10
Total Debt / Tangible Net Worth	Times	Not Available	Not Available	3.07
Current Ratio	Times	Not Available	Not Available	1.39

KEY COVENANTS OF THE FACILITY RATED

The sanction terms include standard covenants for such facilities

STATUS OF NON-COOPERATION WITH PREVIOUS CRA

Not Applicable

RATING HISTORY FOR LAST THREE YEARS (including withdrawal and suspended)

Facilities	Current Rating  (2026)			2025		2024		2023
Type	Tenure	Amount (Rs.Crs.)	Rating	Date	Rating	Date	Rating	Date	Rating
Fund Based	LT	53.46	BWR BB/Stable (Assignment)	NA	NA	NA	NA	NA	NA
Non Fund Based	ST	0.37	BWR A4 (Assignment)	NA	NA	NA	NA	NA	NA
Grand Total		53.83	(Rupees Fifty Three Crores and Eighty Three lakhs Only)

Hyperlink/Reference to applicable Criteria

• General Criteria
• Short Term Debt
• Approach to Financial Ratios
• Manufacturing Company

Analytical Contacts
Vidit Balakrishna Shetty Ratings Analyst vidit.s@brickworkratings.com	Mukesh Kumar Verma Associate Director mukesh.verma@brickworkratings.com
Client Support | clientsupport@brickworkratings.com

SL.No.	Name of the Bank/Lender	Type Of Facilities	Long Term(Rs.Crs.)	Short Term(Rs.Crs.)	Total(Rs.Crs.)	Complexity of the Instrument
1	Punjab National Bank	Term Loan - Sanctioned	2.63	_	2.63	Simple##
2	Punjab National Bank	Term Loan - Sanctioned	0.70	_	0.70	Simple##
3	Punjab National Bank	Term Loan - Sanctioned	6.24	_	6.24	Simple##
4	Punjab National Bank	Term Loan - Sanctioned	1.03	_	1.03	Simple##
5	Punjab National Bank	Term Loan - Sanctioned	0.86	_	0.86	Simple##
6	Punjab National Bank	Cash Credit - Sanctioned	12.00	_	12.00	Simple##
7	Punjab National Bank	Cash Credit - Proposed	10.00	_	10.00	Simple##
8	Punjab National Bank	Bank Guarantee - Sanctioned	_	0.37	0.37	Simple##
9	Punjab National Bank	Cash Credit (WHR) - Sanctioned	20.00	_	20.00	Simple##
Total			53.46	0.37	53.83
TOTAL (Rupees Fifty Three Crores and Eighty Three lakhs Only)

## BWR complexity levels are meant for educating investors. The BWR complexity levels are available at www.brickworkratings.com / download / ComplexityLevels.pdf.

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