Shree Surya Grani Marmo Pvt. Ltd.

Brickwork Ratings assigns the ratings for the Bank Loan Facilities of Rs.4.93 Crs. of Shree Surya Grani Marmo Pvt. Ltd.

Particulars

Facilities**	Amount (Rs.Crs.)	Tenure	Rating#
Fund Based
Cash Credit - Sanctioned	02.00	Long Term	BWR
Term Loan - Sanctioned	02.93
Sub Total	4.93
Grand Total	4.93	(Rupees Four Crores and Ninety Three lakhs Only)

#Please refer to BWR website www.brickworkratings.com for definition of the ratings
**Details of Bank Loan facilities,consolidation or instruments are provided in Annexure RATING ACTION / OUTLOOK

Brickwork rating has assigned the long-term rating BWR B with Stable Outlook on account of prior experience of the management in the field of trading of marbles and mining of granite. The rating is further supported by improvement in capacity utilization.

The ‘stable’ outlook indicates a low likelihood of a rating change in the medium term. BWR expects that the company’s performance is likely to be maintained in the medium term.

The rating, however, is constrained by modest scale of operations, high gearing, stretched liquidity, weak debt protection metrics and highly fragmented and competitive industry.

KEY RATING DRIVERS

Credit Strengths:

• Experienced Management :

  Yograj S. Shaktawat, Sunny Jain and Vishal Niyati are the Directors in the company and they had also been involved in trading of marbles and mining of granite for more than a decade. Prior experience of the promoters has enabled them to establish relations with suppliers and customers and to understand the intricacies of the business.

• Improvement in capacity utilization :

  The company has an installed capacity of processing 12 Lakhs sq.ft. per annum. Initially the company had utilized its capacity upto 50% utilization and currently the company has been at 90% capacity utilization i.e. around 11 Lakhs sq.ft. per annum.

Credit Risks:

• Modest Scale of operations :

  The company reported Total Operating Income amounting Rs.2.31 Cr. in FY19. The company has also achieved a Revenue of Rs.5.95 Cr. in till Feb, FY20 and will be able to achieve more than Rs.6.50 Cr. in current financial year.

• Weak Financial Risk Profile :

  In FY19, the company has a low TNW of Rs.0.98 Cr. against an interest bearing debt of Rs.5.53 Cr. As a result of which Gearing of the company stands high at 5.62X in FY19. Liquidity position of the company is stretched marked by low Current ratio at 1.01X in FY19 which is below the benchmark. Other Liquidity indicators are also stretched marked by elongated conversion cycle of 134 Days owing to high inventory and receivable days. The Cash Credit has also been 95% utilized as per the account statements.

• Intense Competition and fragmented nature of the industry :

  The marble industry is dominated by numerous independent, small-scale enterprises. High degree of fragmentation due to the presence of large number of unorganized players has led to high competitive intensity in the processing segment.

• Weak Debt Protection Metrics :

  Debt protection metrics are considered weak i.e DSCR stands low at 1.02X in FY19. However, ISCR is at 1.81X, is considered moderate depicting timely repayment of its interest obligations.

ANALYTICAL APPROACH

For arriving at its ratings, BWR has applied its rating methodology as detailed in the Rating Criteria detailed below (hyperlinks provided at the end of this rationale).

RATING SENSITIVITIES

Going forward, the company's ability to increase the profitability would be key sensitivity over short to medium term.

Positive: The rating outlook may be revised to positive if the company is able to infuse capital and substantially improve the Profitability.

Negative: The rating may be downgraded if there is further deterioration of gearing, profitability and liquidity profile.

LIQUIDITY INDICATORS -

Liquidity position of the company is stretched marked by low Current ratio at 1.01X in FY19 which is below the benchmark. Other Liquidity indicators are also stretched marked by elongated conversion cycle of 134 Days owing to high inventory and receivable days. The Cash Credit has more than 95% utilized.as per the account statement.

ABOUT THE ENTITY

The company was incorporated on 8th Jan, 2017 and commenced its business operations on 13 October, 2018. SSGMPL is engaged in processing and wholesale trading of high quality granite and marble slabs and tiles. SSGMPL gets its majority of its revenue from the processing and a negligible part of the same comes from trading activities. The company has a total workforce of 23 employees. Yograj S. Shaktawat, Sunny Jain and Vishal Niyati are the Directors in the organization. Besides running SSGMPL, the promoters had also been involved in trading of marbles and mining of granite in distinct companies. The company has an installed capacity of processing 12 Lakhs sq.ft. per annum and currently the company has been at 90% capacity utilization i.e. around 11 Lakhs sq.ft. per annum. Basic raw materials for the company are the Granite blocks which are mainly procured from nearby mines. Further the granite blocks are processed via cutting, grinding, epoxy application and polishing.

KEY FINANCIAL INDICATORS (Standalone)

Key Parameters	Units	FY 18-19 (Audited)	FY 17-18 (Audited)
Operating Revenue	Rs.Crs.	2.31	Not Available
EBITDA	Rs.Crs.	0.57	Not Available
PAT	Rs.Crs.	-0.01	Not Available
Tangible Net Worth	Rs.Crs.	0.98	0.01
Total Debt/Tangible Net Worth	Times	5.62	216.33
Current Ratio	Times	1.01	0.77

NON-COOPERATION WITH PREVIOUS CREDIT RATING AGENCY

ANY OTHER INFORMATION

RATING HISTORY FOR LAST THREE YEARS (including withdrawal and suspended) COMPLEXITY LEVELS OF THE INSTRUMENTS -

BWR complexity levels are meant for educating investors. The BWR complexity levels are available at www.brickworkratings.com / download / ComplexityLevels.pdf. Investors queries can be sent to info@brickworkratings.com.

Analytical Contacts
Aayush Verma Ratings Analyst Board : +91 11 2341 2232 aayush.v@brickworkratings.com	Satvinder Kumar Gakhar Associate Director - Ratings Board : +91 11 2341 2232 satvinder.g@brickworkratings.com
1-860-425-2742 | media@brickworkratings.com

SL.No.	Type Of Facilities	Long Term(Rs.Crs.)	Short Term(Rs.Crs.)	Total(Rs.Crs.)
1	Cash Credit - Sanctioned	2.00	_	2.00
2	Term Loan - Sanctioned	2.93	_	2.93
Total				4.93
TOTAL (Rupees Four Crores and Ninety Three lakhs Only)