RATING RATIONALE
14Apr2021

Immortal Tyres Pvt. Ltd. (erstwhile Karan Rubber Private Limited)

Brickwork Ratings revises the ratings for the Bank Loan Facilities of Rs. 6.00 Crs. of Immortal Tyres Pvt. Ltd. (erstwhile Karan Rubber Private Limited)

Particulars
Facilities** Amount (Rs.Crs.) Tenure Rating#
Previous Present Previous
(25 Sep 2020)
Present
Fund Based 6.00 6.00 Long Term BWR B Stable Issuer Not Cooperating
Downgraded
BWR B + /Stable
Upgrade
(0.00) (2.00) Short Term -
BWR A4
Assignment
(0.00) (2.00)
Non Fund Based (0.00) (1.00) Short Term -
BWR A4
Assignment
Grand Total 6.00 6.00 (Rupees Six Crores 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 Ratings (BWR) has upgraded the long-term rating and assigned the short term rating of Immortal Tyres Pvt. Ltd. at BWR B+/A4 with a Stable outlook. BWR has factored in the experienced management, established brand name, diversified product range, installed capacity and its optimum utilization, moderate debt protection metrics.

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

The rating is constrained by modest scale of operations, intense competition, fragmented nature if industry, susceptibility to volatility in raw material prices. 

KEY RATING DRIVERS

:
Credit Strengths:

:

Credit Risks::

RATING SENSITIVITIES

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 demonstrates the significant improvement in the top-line and the bottom line..

Negative : Further deterioration in current liquidity profile and capital structure will be a credit negative.

LIQUIDITY INDICATORS - Stretched

Liquidity position of the company is stretched, marked by an elongated conversion cycle of 108 Days in FY20 owing to the higher duration of time the company takes to sell its inventory. The same has been projected to be at 140 days in FY21 (Proj.). Cash and Cash Equivalents were low at Rs.0.12 Cr. in FY20 which has projected to be at the same level in FY21 (Proj). Average utilization of CC has bee above 90% over the last 6 months.

ABOUT THE ENTITY

Immortal Tyres Pvt. Ltd. (erstwhile Karan Rubber Private Limited) was incorporated on 02 September, 2011. The Company is engaged in manufacturing of auto tyres & tubes for two wheelers, three wheelers, e-rickshaws and heavy vehicles. The manufacturing plant is located in Ludhiana, with an installed capacity of  manufacturing 2000 tyres and 10000 tubes per day. Presently the capacity for manufacturing tyres has been utilized up-to 85%. The capacity utilized for manufacturing tubes has been 75%. The Company sells the products under the brand name of "Immortal". The Company derives 70% of the total revenue from exports and 30% through domestic dealers. The Company also procures raw material from foreign countries which constitutes to 50% of total procurement.

KEY FINANCIAL INDICATORS (Standalone)
Key Parameters Units FY 19-20
(Audited)
FY 18-19
(Audited)
Operating Revenue Rs.Crs. 26.88 29.24
EBITDA Rs.Crs. 2.04 1.51
PAT Rs.Crs. 0.12 0.15
Tangible Net Worth Rs.Crs. 1.89 1.77
Total Debt/Tangible Net Worth Times 9.55 7.26
Current Ratio Times 1.47 1.14

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 6.00
BWR B+/Stable
25Sep2020
BWR B Stable Issuer Not Cooperating
31Jul2019
BWR B+ Stable
NA
NA
Fund Based ST NA
NA
25Sep2020
-
31Jul2019
-
NA
NA
FB SubLimit ST (2.00)
BWR A4
NA
NA
NA
NA
NA
NA
(2.00)
BWR A4
NA
NA
NA
NA
NA
NA
Non Fund Based LT NA
NA
25Sep2020
-
31Jul2019
-
NA
NA
Non Fund Based ST NA
NA
25Sep2020
-
31Jul2019
-
NA
NA
NFB SubLimit ST (1.00)
BWR A4
NA
NA
NA
NA
NA
NA
Grand Total 6.00 (Rupees Six Crores 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.

Analytical Contacts

Aayush Verma

Rating Analyst Board : +91 11 2341 2232 aayush.v@brickworkratings.com

Hari Kishan Yadav

Associate Director - Ratings hari.ky@brickworkratings.com
1-860-425-2742 | media@brickworkratings.com
Immortal Tyres Pvt. Ltd. (erstwhile Karan Rubber Private Limited)
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
Sub-Limit (FOBP/FOUBP) Sanctioned (2.00)
Sub-Limit (ILC/FLC) Sanctioned (1.00)
Sub-Limit (Packing Credit) Sanctioned (2.00)
Total 6.00 0.00 6.00
TOTAL (Rupees Six Crores Only)
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