RATING RATIONALE
30Apr2021

Shri Ram Industries

Brickwork Ratings reaffirms/revises the ratings for the Bank Loan Facilities of Rs. 5.00 Crs. of Shri Ram Industries

Particulars
Facilities** Amount (Rs.Crs.) Tenure Rating#
Previous Present Previous
(24 Apr 2020)
Present
Fund Based 6.75 5.00 Long Term BWR B Stable Issuer Not Cooperating*
Downgrade
BWR B /Stable
Reaffirmation
Grand Total 6.75 5.00 (Rupees Five 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

BWR has reaffirmed the rating at “BWR B'' with “Stable” outlook for the bank loan facilities of Shri Ram Industries. The rating draws strength from experienced management, and integrated nature of operations with location advantage . However, the rating is constrained on account of susceptibility to risks relating to input cost, realisations, cyclicality in the cement industry and Limitations of a partnership firm.

The rating outlook has been assigned as "Stable" as BWR believes that Shri Ram Industries`s 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 there is improvement in revenues and profit margins. The rating outlook may be revised to 'Negative' if there is any deterioration in financial risk profile or liquidity issues.

KEY RATING DRIVERS


Credit Strengths:


Credit Risks:

RATING SENSITIVITIES

Going forward, the ability of the firm to improve its financial risk profile and maintaining adequate liquidity will remain the key rating sensitivities.

Positive: The rating may be upgraded if the company interalia, is able to improve its topline, profitability  or on account of any other favourable factor.  

Negative: The rating may be downgraded if inter alia, there is any deterioration in financial risk profile, fails to maintain adequate liquidity or on account of any unforeseen unfavourable events.

LIQUIDITY INDICATORS - Adequate

 

  1. The entity has no liquid investments in FY 20,  and cash balances in FY19 (Audited) is Rs. 0.04 crs.

  2. The Cash Credit Utilization from Sept-20 to Feb-21 stands at 100%.

  3. There is a Long-term borrowing in FY 20 of Rs 3.88 crs includes unsecured loans from related parties, these loans are interest-free and have no fixed repayment schedule. The company has not provided cash flows for the same.

  4. The company has a DSCR of 2.47x & ISCR of 0.16x in FY20 (Audited).

  5. Current ratio of the company stands at 1.40x in FY20 (Audited).

  6. There is no subsidiary.

ABOUT THE ENTITY

Shri Ram Industries ( ‘SRI’ or ‘The Firm’) is a partnership firm established in December 2016. The main line of business of the firm is into manufacturing of clinker and cement. The firm sells cement for the following brands namely Cemcom, Jinder, OPC Gold and SR. Their plant is located at Battal Ballian, district Udhampur, Jammu & Kashmir. The firm has an installed capacity of 150 tpd of clinker and 220 tpd of cement.

KEY FINANCIAL INDICATORS (Standalone)
Key Parameters Units FY 19-20
(Audited)
FY 18-19
(Audited)
Operating Revenue Rs.Crs. 16.75 17.70
EBITDA Rs.Crs. 0.14 0.48
PAT Rs.Crs. 1.42 1.55
Tangible Net Worth Rs.Crs. 6.32 5.73
Total Debt/Tangible Net Worth Times 1.10 1.94
Current Ratio Times 1.40 0.96

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 5.00
BWR B/Stable
(Reaffirmation)
24Apr2020
BWR B Stable Issuer Not Cooperating*
(Downgrade)
NA
NA
10Jul2018
BWR B+ Stable
(Assinged)
Grand Total 5.00 (Rupees Five 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

Chaitanya Tambe

Trainee Ratings Analyst Board : + 91 22 2831 1426/6745 6666 chaitanya.t@brickworkratings.com

V.K.Kukreja

Associate Director - Ratings Board : +91 11 2341 2232 kukreja.vk@brickworkratings.com
1-860-425-2742 | media@brickworkratings.com
Shri Ram Industries
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 5.00 _ 5.00
Total 5.00 0.00 5.00
TOTAL (Rupees Five Crores Only)
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