Brickwork Ratings reaffirms the ratings for the Bank Loan Facilities of Rs. 9.50 Crs. of A.S. Enterprise
Particulars| Facilities** | Amount (Rs.Crs.) | Tenure | Rating# | ||
|---|---|---|---|---|---|
| Previous | Present | Previous (06 Jan 2023) |
Present | ||
| Fund Based | (4.00) | (4.00) | Long Term |
BWR BB+ /Stable
Reaffirmation |
BWR BB +
/Stable Reaffirmation |
| 9.00 | 9.00 | Short Term |
BWR A4+
Reaffirmation |
BWR A4 +
Reaffirmation |
|
| Non Fund Based | 0.50 | 0.50 | Short Term |
BWR A4+
Reaffirmation |
BWR A4 +
Reaffirmation |
| (10.00) | (9.00) | ||||
| (2.00) | (2.00) | ||||
| Grand Total | 9.50 | 9.50 | (Rupees Nine Crores and Fifty lakhs Only) | ||
Brickwork Ratings has relied on the audited financials of A.S. Enterprise for FY22 and FY23 and projected financials for FY24 and FY25, information furnished by the client and its bankers, as well as information available in the public domain, to arrive at the present ratings.
Brickwork Ratings has reaffirmed the long term rating at BWR BB+ (Stable) for the bank loan facilities of Rs. 4.00 Crs (Sub-Limit) and has reaffirmed the short term rating at BWR A4+ for the bank loan facilities of Rs.9.50 Crs (aggregate rated amount of Rs.9.50 Crs). The reaffirmation in the rating draws strength from the vast business experience of the partner, longstanding Relations with The Customers, an established track of operations and acceptable Debt Protection Metrics. However, the rating is constrained on account of inherent risk involved in a partnership concern, negative business sentiments in global markets and exposure to intense competition.
BWR believes that the business risk profile of A.S. Enterprise 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 the revenues and profit show sustained improvement, with improvement in debt protection metrics. The rating outlook may be revised to 'Negative' if the revenues go down, profit margins show lower than expected figures or if there is a delay in debt servicing.
KEY RATING DRIVERSCredit Strengths:
A.S. Enterprise is promoted by two partners, Mr. Amit Shah and Mr. Sandip Kothari. Both partners have almost 3 decades of experience and expertise of Diamond industry.
The firm has established relations with customers resulting in repeat orders providing revenue visibility.
TNW of the company stood at Rs. 16.09 Crs. in FY23 as compared to Rs. 18.33 Crs in FY22 & as projected at Rs 17.00 Crs in FY24.
The company has a moderate financial risk profile (TotalDebt/TNW) & (TOL/TNW) is 0.99x & 2.68x in FY23 as compared to 0.83x & 2.96x in FY22.
There is an inherent risk involved in a partnership concern,wherein any significant capital withdrawal may lead to an adverse capital structure.
Being present in an industry with presence of a number of large and established players, the firm is exposed to competition, which may limit its pricing flexibility and bargaining power with customers, which in turn places pressure on profitability of the firm. Operations of the firm to be working capital intensive, in line with the general industry trends.
The performance of Gems and Jewellery exports over last few years has remained largely on the declining trend led by economic slowdown, China US trade war, Hong Kong protest etc.The available ten-month data of gem and jewellery exports from April 2023 to January 2024 show an over 16 percent fall, at $26.35 billion, compared with the same period last year. Diamond shipments, which have a major share in the exports, touched $13.09 billion, registering a steep fall of 27.58 percent. Though there is optimism for the last quarter's prospects as January 2024 showed signs of recovery, the overall export figures for 2023-24 are projected to decline by 15 to 20 percent.
For arriving at its ratings, BWR has applied its rating methodology as detailed in the Rating Criteria detailed below. The firm has no group entity.
RATING SENSITIVITIES
Going forward, the firm's ability to increase the scale of operations, improve profit margins, and efficiently manage its working capital cycle and control receivables and payable days remains the key rating sensitivities
Positive: The ratings may be upgraded if the firm registers more than envisaged sales and profitability while maintaining its liquidity position.
Negative: The ratings may be downgraded in case revenues of the firm substantially deteriorates from current level. Any additional borrowing by the firm may lead to further deterioration in the financial risk profile such as Debt/Equity ratio, debt protection metrics and profit margins
The average utilization of the PCFC facility is 11.75% during the periods of 01-July-23 to 29-Feb-23. The firm has reported an adequate liquidity position as marked by comfortable current ratio of 1.41 times in FY23. Liquidity is further supported by a healthy ISCR & DSCR of 5.68 times and 4.70 times respectively in FY 2023. The net cash accurals is Rs 0.80 Crs as against the NIL debt obligations Crs in FY23 & projected net cah accurals Rs 2.00 Crs as against NIL debt obligations Crs in FY24. The cash & cash balance stands at Rs 5.76 Crs as on 31st March 2023.
ABOUT THE ENTITY| Macro Economic Indicator | Sector | Industry | Basic Industry |
|---|---|---|---|
| Consumer Discretionary | Consumer Durables | Consumer Durables | Gems, Jewellery And Watches |
Incorporated in Jan 1986 as Partnership firm, A.S.Enterprise is involved in cutting polishing of rough diamonds.The Firm generally imports rough diamonds from Belgium, Thailand, U.S and polish them, and exports them to different countries. US contributes 25% of total exports and firm has its manufacturing division at Dahisar, Mumbai.
KEY FINANCIAL INDICATORS (Standalone)| Key Parameters | Units |
FY 21 - 22 (Audited) |
FY 22 - 23 (Audited) |
FY 23 - 24 (Unaudited) |
|---|---|---|---|---|
| Operating Revenue | Rs.Crs. | 94.99 | 94.55 | 61.25 |
| EBITDA | Rs.Crs. | 2.83 | 2.24 | 5.85 |
| PAT | Rs.Crs. | 2.45 | 2.23 | 2.85 |
| Tangible Net Worth | Rs.Crs. | 18.33 | 16.09 | Not Available |
| Total Debt / Tangible Net Worth | Times | 0.83 | 0.99 | Not Available |
| Current Ratio | Times | 1.36 | 1.41 | Not Available |
The terms of sanction include standard covenants normally stipulated for bank loan facilities
There is no Non Co-operation with other CRAs.
ANY OTHER INFORMATIONNil
RATING HISTORY FOR THE PREVIOUS THREE YEARS (including withdrawal and suspended)| Facilities | Current Rating (2024) | 2023 | 2022 | 2021 | |||||
|---|---|---|---|---|---|---|---|---|---|
| Type | Tenure | Amount (Rs.Crs.) |
Rating | Date | Rating | Date | Rating | Date | Rating |
| FB SubLimit | LT | (4.00) |
BWR BB+/Stable
(Reaffirmation) |
NA |
NA
|
06Jan2023 |
BWR BB+ Stable
(Reaffirmation) |
13Oct2021 |
BWR BB+ Stable
(Reaffirmation) |
| Fund Based | ST | 9.00 |
BWR A4+
(Reaffirmation) |
NA |
NA
|
06Jan2023 |
BWR A4+
(Reaffirmation) |
13Oct2021 |
BWR A4+
(Reaffirmation) |
| Non Fund Based | ST | 0.50 |
BWR A4+
(Reaffirmation) |
NA |
NA
|
06Jan2023 |
BWR A4+
(Reaffirmation) |
13Oct2021 |
BWR A4+
(Reaffirmation) |
| NFB SubLimit | ST | (9.00) |
BWR A4+
(Reaffirmation) |
NA |
NA
|
06Jan2023 |
BWR A4+
(Reaffirmation) |
13Oct2021 |
BWR A4+
(Reaffirmation) |
| NFB SubLimit | ST | (2.00) |
BWR A4+
(Reaffirmation) |
NA |
NA
|
NA |
NA
|
NA |
NA
|
| Grand Total | 9.50 | (Rupees Nine Crores and Fifty 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 Criteria| Analytical Contacts | |
|---|---|
|
Chinmaya R Rating Analyst chinmaya.r@brickworkratings.com |
Nagaraj K Director - Ratings Board : +91 80 4040 9940 nagaraj.ks@brickworkratings.com |
| 1-860-425-2742 | media@brickworkratings.com | |
| SL.No. | Name of the Bank/Lender | Type Of Facilities | Long Term(Rs.Crs.) | Short Term(Rs.Crs.) | Total(Rs.Crs.) | |
|---|---|---|---|---|---|---|
| 1 | Kotak Mahindra Bank | Packing Credit in Foreign Currency (PCFC)Sanctioned | _ | 9.00 | 9.00 | |
| Sub-Limit (FBP/FBD/FBN/FDBP/FUDBP/ AFDBC) Sanctioned | (9.00) | |||||
| Sub-Limit (Overdraft) Sanctioned | (4.00) | |||||
| Sub-Limit (WCDL) Sanctioned | (2.00) | |||||
| 2 | Kotak Mahindra Bank | Forward ContractSanctioned | _ | 0.50 | 0.50 | |
| Total | 0.00 | 9.50 | 9.50 | |||
| TOTAL (Rupees Nine Crores and Fifty lakhs Only) | ||||||
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About Brickwork RatingsBrickwork 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 11,560 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.
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