Brickwork Ratings revises the ratings for the Bank Loan Facilities of Rs. 6.93 Crs. of Tejas Rasayan Pvt Ltd
ParticularsFacilities** | Amount (Rs.Crs.) | Tenure | Rating# | ||
---|---|---|---|---|---|
Previous | Present | Previous (11 Jan 2020) |
Present | ||
Fund Based | 6.24 | 6.93 | Long Term |
BWR B (Stable)
Reaffirmed |
BWR B +
/Positive Upgrade |
Grand Total | 6.24 | 6.93 | (Rupees Six Crores and Ninety Three lakhs Only) |
Brickwork rating has upgraded the long-term rating of Tejas Rasayan Pvt. Ltd. at BWR B+ with a Positive Outlook on account of diversified experience of the management, moderate capital structure, healthy debt protection metrics, moderate production capacity and optimum capacity utilization.
The revision in outlook to 'Positive' reflects improvement in the company's business and financial risk profile. The company reported Total Operating Income amounting Rs.9.81 Cr. in FY20 and further projects to achieve over Rs.15.00 Cr. in FY21 (Proj.).
The rating, however, is constrained by intense competition, fragmented nature of the industry, regulatory risk and agro climatic risk.
KEY RATING DRIVERSCredit Strengths:
The company is managed by Mr. Mukesh Kumar, Mr. Udit Jain and Mr. Arpit Garg who all are directors in the company. All the directors are experienced and qualified. Mr. Mukesh Kumar has experience in the field of finance and real estate development. Mr. Udit Jain also comes from a business family and Mr. Arpit Garg is a chemical engineer and has an MBA degree in marketing. The directors have also been involved in doing business in various industries spanning rolling mills, paper mills, trading of sponge iron.
The company set up a fertilizer and pesticide manufacturing plant in FY18 with total capacity of 4800 MT Per Annum. Over the years the installed production capacity of the Plant has been enhanced to 5500 MT which has been utilized up-to 5261 MT in FY21. Currently the total production of the Plant has been utilized upto 95% of its installed capacity.
In FY20 the Company has reported a moderate Capital Structure with Tangible Net Worth (Analysed) of Rs.4.33 Cr, owing to which Gearing (Analysed) is moderate at 1.53X in FY20. Debt servicing capabilities remained moderate, reflected by ISCR and DSCR at 2.83X and 1.49X respectively in FY20. As per FY21 (Proj) ISCR and DSCR have been estimated to be at 2.74X and 1.38X respectively in FY21 depicting the financial capacity of the company to repay its interest and principal obligations. Profitability Margins are also strong. Operating Profit Margin and Net Profit Margin were at 20.17% and 3.52% respectively in FY20. Both the ratios have been projected to be at 16.95% and 4.47% respectively in FY21 (Proj.)
Credit Risks:
The fertilizer and pesticides 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.
Fertilizer Industry is highly regulated by the government. Prices of fertilizers also depend upon the policies of the government. Climatic conditions like drought and rainfall deficiency may negatively impact the demand of the fertilizers.
Going forward, the company's ability to maintain its business and financial risk profile would be the key sensitivities over the short to medium term.
Positive : The rating may be upgraded if the company maintains the current liquidity profile and profitability margins.
Negative : The rating may be downgraded if there is a dip in top-line and deterioration in current capital structure.
LIQUIDITY INDICATORS - Adequate
Liquidity position of the Company is adequate, marked by moderate Net Cash Accruals of Rs.1.28 Cr. in FY20 which has been projected to increase to Rs.1.48 Cr. in FY21 (Proj.) The same are sufficiently matched with debt obligations of Rs.0.81 Cr. depicting the company's more than sufficient liquidity. Average utilization of CC is 82.57% in the last 6 months. However the Conversion cycle has been elongated at 135 Days in FY20 mainly because of the higher inventory days. Cash and Cash Equivalents were low at Rs.0.04 Cr. in FY20 which has projected to be at the same level i,e. at Rs.0.03 Cr. in FY21.
ABOUT THE ENTITYTejas Rasayan Pvt Ltd was incorporated in the year 2011 with registered office located at Hauz Khas, Delhi. The company set up a fertilizer and pesticide manufacturing plant in 2018 at Muzaffarnagar, Uttar Pradesh with total capacity of 4800 MT Per Annum. Over the years the installed production capacity of the Plant has been enhanced to 5500 MT which has been utilized up-to 5261 MT in FY21 which comes out to be 95% utilization of the total production capacity.
Mr. Mukesh Kumar, Mr. Udit Jain, Mr. Umang Jain and Mr. Arpit Garg are directors and handling all the affairs of the company. The directors have also been involved in doing business in various industries spanning rolling mills, paper mills, trading of sponge iron.
The name of the company at the time of incorporation was “M/s Silverton Holiday Homes (P) Ltd., initially the main object of the company was to set-up a hotel but the same couldn’t be materialized and directors of the company decided to establish a fertilizer manufacturing unit and the name of the company was changed to M/s Tejas Rasayan (P) Ltd.
KEY FINANCIAL INDICATORS (Standalone)Key Parameters | Units |
FY 19-20 (Audited) |
FY 18-19 (Audited) |
---|---|---|---|
Operating Revenue | Rs.Crs. | 9.81 | 0.86 |
EBITDA | Rs.Crs. | 1.98 | 0.11 |
PAT | Rs.Crs. | 0.34 | -0.49 |
Tangible Net Worth | Rs.Crs. | 2.34 | 1.99 |
Total Debt/Tangible Net Worth | Times | 3.69 | 3.92 |
Current Ratio | Times | 1.49 | 1.16 |
Facilities | Current Rating (2021) | 2020 | 2019 | 2018 | |||||
---|---|---|---|---|---|---|---|---|---|
Type | Tenure | Amount (Rs.Crs.) |
Rating | Date | Rating | Date | Rating | Date | Rating |
Fund Based | LT | 6.93 |
BWR B+/Positive
|
11Jan2020 |
BWR B (Stable)
|
NA |
NA
|
19Jun2018 |
BWR B (Stable)
|
Grand Total | 6.93 | (Rupees Six Crores and Ninety 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.
Analytical Contacts | |
---|---|
Aayush Verma Rating Analyst Board : +91 11 2341 2232 aayush.v@brickworkratings.com |
hari.ky@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 | 2.00 | _ | 2.00 | ||
2 | Term LoanSanctioned | 3.73 | _ | 3.73 | ||
3 | GECLSanctioned | 1.20 | _ | 1.20 | ||
Total | 6.93 | 0.00 | 6.93 | |||
TOTAL (Rupees Six Crores and Ninety Three lakhs Only) |
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