RATING RATIONALE
12Aug2020
Dainik Savera News and Media Network
Brickwork Ratings assigns the ratings for the Bank Loan Facilities of Rs.10.00 Crs. of Dainik Savera News and Media Network
Particulars| Facilities** | Amount (Rs.Crs.) | Tenure | Rating# | ||||
|---|---|---|---|---|---|---|---|
| Fund Based | |||||||
| Cash Credit Sanctioned | 05.00 | Long Term | BWR | ||||
| Sub Total | 5.00 | ||||||
| Non-Fund Based | |||||||
| Inland Letter of Credit (ILC) Sanctioned | 05.00 | Short Term | BWR | ||||
| Sub Total | 5.00 | ||||||
| Grand Total | 10.00 | (Rupees Ten Crores Only) | |||||
**Details of Bank Loan facilities,consolidation or instruments are provided in Annexure RATING ACTION / OUTLOOK
BWR assigns the rating of BWR BB- with 'Stable' outlook for the long term bank loan facilities and BWR A4 for short term bank loan facilities of Dainik Savera News and Media Network (The Firm). The ratings take into consideration the Extensive experience of the Partners and Moderate Financial Risk Profile, The ratings are however constrained by decline in revenues & net profit, risk inherent as a partnership constitution and presence in competitive industry.
BWR believes that Dainik Savera News and Media Netwrok business risk profile will be maintained over the medium term. The 'Stable' outlook indicates a low likelihood of rating change over the medium term. The rating outlook may be revised to 'Positive' in case the revenues and profit show sustained improvement. The rating outlook may be revised to 'Negative' if there is any further deterioration in financial risk profile of the firm.
KEY RATING DRIVERS
Credit Strengths:
- (1) Extensive Experience of Partners :
The partners of the firm has rich experience of more than 10 years in the media business that helps them to make a better relationship with there customers and suppliers as well.
- (2) Moderate Financial Risk profile :
The firm has low gearing level with TD/TNW of 0.86 Times, Current ratio of 1.47 Times in FY19 (Audited) along with moderate net worth of Rs 17.41 crores and Debt service indicators with Interest Service Coverage Ratio of 1.56 Times and Debt Service Coverage Ratio of 1.34 Times in FY19 (Audited).
Credit Risks:
- (1) Decline in Revenues & Net Profit :
The firm revenues has declined from Rs 57.30 crores in FY19 (Audited) to Rs 51.88 crores in FY20 (Provisional) due to decline in advertisement income. The firm PAT has declined from Rs 1.66 crores in FY18 to Rs 0.77 crores in FY19 (Audited) due to increase in operating expenses. The firm net worth has declined from Rs 17.41 crores in FY19 (Audited) to Rs 12.32 crores in FY20 (Provisional) as one of Partner has left the partnership.
- (2) Risk Inherent as a Partnership Constitution :
There is a risk of withdrawal of capital by the partners for any personal contingency would adversely affect the capital structure of the firm.
- (3) Presence in Competitive Industry :
The firm has presence in media industry which is highly competitive in nature, comprising of large number of players such as Punjab Kesari, Amar Ujala, Dainik Bhaskar and other newspapers in region.
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 ability of the Firm to Improve their Revenues and Profitability Margins significantly would be key rating sensitives.
Positive: The ratings may be upgraded in the future if the Firm is able to significantly Improve their Revenues, and profitability margins.
Negative: The ratings may be downgraded if any further deterioration in the Financial Risk Profile.
LIQUIDITY INDICATORS -
Stretched
(1) The firm has no associate concern or subsidiary concern.
(2) The firm has cash balances of Rs 0.08 Crores in FY19 (Audited).
(3) The firm has average utilisation of 100% of their cash credit limit from last six months.
(4) The firm has long term debt of Rs 5.04 crores as at FY19 (Audited) which comprises of unsecured loans from directors and relatives of Rs 3.36 crores, and term loan of Rs 1.67 crores which is closed in the month of June 2020. The firm has not submitted its cash flow statements for FY19 (Audited).
(5) The firm has interest service coverage ratio of 1.56 times and debt service coverage ratio of 1.34 times in FY19 (Audited).
(6) The current ratio has been 1.47 times as at FY19 (Audited).
(7) The firm has conversion cycle of 44 days due to high days payables of 223 days and day receivables of 242 days in FY19 (Audited).
ABOUT THE ENTITYM/s Dainik Savera News and Media Network was established in November, 2012 as a partnership firm. The partners of the firm are Mr. Shital Kumar Vij and Mrs. Vani Vij. The firm is engaged in printing newspaper and publishing news through electronic media . Dainik Savera Times a Hindi News portal presents breaking news in Hindi from India and across the world on politics, business, sports. Dainik Savera Times, a top Hindi Daily of Punjab which has grown manifold in just Six Years and has presence in Punjab, Haryana, Himachal Pradesh, Chandigarh, Jammu & Kashmir and Delhi-NCR with the circulation of 7,31,320 copies per day. The firm has two printing centers at Jalandhar and Chandigarh and the printing is done on Web Offset Printing Machines (German made) having capacity to print up to 30 coloured pages with 65,000 copies per hour. The firm also publishes magazines like Glamour Savera, Savera Nari and Sunday Savera. The firm has group websites and channels like Dainiksaveratimes.com, Savera Times, Dainik Savera, Savera Star Talks, Savera dharram, Savera health, Savera Music and Savera e paper. The firm has 758 employees.
KEY FINANCIAL INDICATORS (Standalone)| Key Parameters | Units |
FY 18-19 (Audited) |
FY 17-18 (Audited) |
|---|---|---|---|
| Operating Revenue | Rs.Crs. | 57.30 | 55.78 |
| EBITDA | Rs.Crs. | 2.53 | 4.28 |
| PAT | Rs.Crs. | 0.77 | 1.66 |
| Tangible Net Worth | Rs.Crs. | 17.41 | 16.57 |
| Total Debt/Tangible Net Worth | Times | 0.86 | 0.77 |
| Current Ratio | Times | 1.47 | 1.52 |
STATUS OF NON-COOPERATION WITH PREVIOUS CRA ANY OTHER INFORMATION
| CRA Name | Date | Amount | Rating |
|---|---|---|---|
| CRISIL | 30 Jan 2020 | 14.00 | Crisil D |
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 | |
|---|---|
|
Aman Sharma Ratings Analyst Board : +91 172 5032 295 / 6 aman.s@brickworkratings.com |
V.K.Kukreja Associate Director - Ratings Board : +91 11 2341 2232 kukreja.vk@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 | Inland Letter of Credit (ILC)Sanctioned | _ | 5.00 | 5.00 | ||
| 2 | Cash CreditSanctioned | 5.00 | _ | 5.00 | ||
| Total | 10.00 | |||||
| TOTAL (Rupees Ten Crores Only) | ||||||
| Instrument | Issue Date | Amount (Rs.Crs) | Coupon Rate | Maturity Date | ISIN Particulars |
|---|---|---|---|---|---|
| NA | NA | NA | NA | NA | NA |
| Name of Entity | % Ownership | Extent of consolidation | Rationale for consolidation |
|---|---|---|---|
| NA | NA | NA | NA |
The Rating Rationale is sent to you for the sole purpose of dissemination through your print, digital or electronic media. While it may be used by you acknowledging credit to BWR, please do not change the wordings in the rationale to avoid conveying a meaning different from what was intended by BWR. BWR alone has the sole right of sharing (both direct and indirect) its rationales for consideration or otherwise through any print or electronic or digital media.
About Brickwork RatingsDisclaimer
Brickwork Ratings (BWR) has assigned the rating based on the information obtained from the issuer and other reliable sources, which are deemed to be accurate. BWR has taken considerable steps to avoid any data distortion; however, it does not examine the precision or completeness of the information obtained. And hence, the information in this report is presented "as is" without any express or implied warranty of any kind. BWR does not make any representation in respect to the truth or accuracy of any such information. The rating assigned by BWR should be treated as an opinion rather than a recommendation to buy, sell or hold the rated instrument and BWR shall not be liable for any losses incurred by users from any use of this report or its contents. BWR has the right to change, suspend or withdraw the ratings at any time for any reasons.