Brickwork Ratings revises the ratings for the Bank Loan Facilities of Rs. 11.43 Crs. of Shreelaxmikantam Sales Pvt. Ltd.
ParticularsFacilities** | Amount (Rs.Crs.) | Tenure | Rating# | ||
---|---|---|---|---|---|
Previous | Present | Previous (24 Mar 2020) |
Present | ||
Fund Based | 9.52 | 11.43 | Long Term |
B
/Stable Assignment |
BWR BB -
/Stable Upgrade |
Grand Total | 9.52 | 11.43 | (Rupees Eleven Crores and Forty Three lakhs Only) |
BWR upgrades the long term rating as BWR BB-/Stable assigned to Shreelaxmikantam Sales Pvt. Ltd.
The rating draws strength from the rich experience of the management of the firm in the textiles processing business and increasing scale of operations along with moderate financial risk profile. The rating of the firm is constrained by the competition in the industry.
BWR believes that the business risk profile of “Shreelaxmikantam Sales Pvt. Ltd.” 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 there is significant improvement in revenues, profit margins of the company. The rating outlook may be revised to “Negative” if there is any deterioration in the financial risk profile including liquidity of the company.
KEY RATING DRIVERSCredit Strengths:
The directors are well experienced having industrial expertise ranging from 2 decades to as long as 4 decades in the textiles industry and have long term business associations with their customers and suppliers.
The company has improved its scale of operations as its revenue improved from INR 8.01 Crores in FY19 to 54.40 Crores in FY20. The company has also achieved revenue of Approx INR 50 Crores from Apr'20 till Feb'21. The corresponding profits have also improved from INR 0.01 Crores in FY19 to 0.21 Crores in FY20. Other financial parameters are at moderate level as Net Profit Margin improved from 0.12% in FY19 to 0.39% in FY20, ISCR/DSCR are maintained at 1.92X/1.39X in FY20.
Credit Risks:
Entry barriers in the industry are low on account of limited capital and technology requirement and also low differentiation in the end product leading to intense competition and limiting the pricing power resulting in low profitability
Going forward, the ability of the Firm to improve its revenues and financial risk profile would remain the key rating sensitivities.
Positive: Rating may be upgraded in case of substantial improvement in revenues and profit margins of the firm.
Negative: Rating may be downgraded in case there is deterioration in financial risk profile of the firm including the liquidity of the company.
LIQUIDITY INDICATORS - Adequate
The company has cash and bank balance of INR 0.01 Crores in FY20. The company generated cash surplus of INR 1.25 Crores in FY20 against NIL CPLTD. The CC Utilisation of last six months was around 65.31%.The current ratio is at 1.08 times in FY20. ISCR/DSCR is maintained at 1.92x/1.39x in FY20. The conversion cycle is at 18 days in FY20. Long Term Borrowings of INR 4.86 Crores in FY20 includes unsecured loans from Promoters/Directors INR 0.26 Crores, unsecured loans from friends and family of INR 1.47 Crores and term loan from Canara Bank of INR 3.11 Crores in FY20.
Holding/Subsidiary: NA
ABOUT THE ENTITYShreelaxmikantam Sales Pvt. Ltd., a limited by shares, started its operations in Dec'18. The company directors and shareholders namely Mr. Bhagwan Das Paldiwal, Mrs. Urmila Devi, Mr. Prasann Agarwal, Mr. Lalit Agarwal and other shareholders have extensive experience in the fabrics/textiles industry. The manufacturing facility of the firm is set up in the RIICO Industrial Area in Ajmer, Rajasthan. The firm engages in manufacturing of grey cotton cloth through the processing of Yarn in its manufacturing facility.
KEY FINANCIAL INDICATORS (Standalone)Key Parameters | Units |
FY 19-20 (Audited) |
FY 18-19 (Audited) |
---|---|---|---|
Operating Revenue | Rs.Crs. | 54.40 | 8.01 |
EBITDA | Rs.Crs. | 2.56 | 0.46 |
PAT | Rs.Crs. | 0.21 | 0.01 |
Tangible Net Worth | Rs.Crs. | 2.13 | 1.92 |
Total Debt/Tangible Net Worth | Times | 4.85 | 3.04 |
Current Ratio | Times | 1.08 | 1.18 |
Facilities | Current Rating (2021) | 2020 | 2019 | 2018 | |||||
---|---|---|---|---|---|---|---|---|---|
Type | Tenure | Amount (Rs.Crs.) |
Rating | Date | Rating | Date | Rating | Date | Rating |
Fund Based | LT | 11.43 |
BWR BB-/Stable
|
24Mar2020 |
B/Stable
|
NA |
NA
|
NA |
NA
|
Grand Total | 11.43 | (Rupees Eleven Crores and Forty Three lakhs Only) |
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.
Hyperlink/Reference to applicable CriteriaAnalytical Contacts | |
---|---|
Arushi Jain Trainee Ratings Analyst Board : +91 11 2341 2232 arushi.j@brickworkratings.com |
Rajender Kumar Sharma Principal Director -Ratings Board : +91 11 2341 2232 rksharma@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 CreditSanctioned | 6.00 | _ | 6.00 | ||
2 | Term LoanSanctioned | 3.00 | _ | 3.00 | ||
3 | Working Capital Demand LoanSanctioned | 0.53 | _ | 0.53 | ||
4 | GECLSanctioned | 1.90 | _ | 1.90 | ||
Total | 11.43 | 0.00 | 11.43 | |||
TOTAL (Rupees Eleven Crores and Forty Three lakhs Only) |
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