RATING RATIONALE
19Mar2021

Shreelaxmikantam Sales Pvt. Ltd.

Brickwork Ratings revises the ratings for the Bank Loan Facilities of Rs. 11.43 Crs. of Shreelaxmikantam Sales Pvt. Ltd.

Particulars
Facilities** 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)
#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

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 DRIVERS


Credit Strengths:


Credit Risks:

RATING SENSITIVITIES

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 ENTITY

Shreelaxmikantam 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

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

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 Criteria
Analytical 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
Shreelaxmikantam Sales Pvt. Ltd.
ANNEXURE-I
Details of Bank Facilities rated by BWR
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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About Brickwork Ratings

Brickwork Ratings (BWR), a Securities and Exchange Board of India [SEBI] registered Credit Rating Agency and accredited by Reserve Bank of India [RBI], offers credit ratings of Bank Loan, Non- convertible / convertible / partially convertible debentures and other capital market instruments and bonds, Commercial Paper, perpetual bonds, asset-backed and mortgage-backed securities, partial guarantees and other structured / credit enhanced debt instruments, Security Receipts, Securitization Products, Municipal Bonds, etc. BWR has rated over 11,400 medium and large corporates and financial institutions’ instruments. BWR has also rated NGOs, Educational Institutions, Hospitals, Real Estate Developers, Urban Local Bodies and Municipal Corporations. BWR has Canara Bank, a leading public sector bank, as one of the promoters and strategic partner. BWR has its corporate office in Bengaluru and a country-wide presence with its offices in Ahmedabad, Chandigarh, Chennai, Hyderabad, Kolkata, Mumbai and New Delhi along with representatives in 150+ locations.

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