Tankeshwari Metal Powder Products Pvt Ltd

Brickwork Ratings reaffirms the ratings for the Bank Loan Facilities of Rs. 29.00 Crs. of Tankeshwari Metal Powder Products Pvt Ltd

Particulars

Facilities**	Amount (Rs.Crs.)		Tenure	Rating#
Facilities**	Previous	Present	Tenure	Previous (28 Aug 2023)	Present
Fund Based	16.50	29.00	Long Term	BWR BB+ /Stable Upgrade and Removed from the INC category	BWR BB + /Stable Reaffirmation
Non Fund Based	(5.00)	(5.00)	Long Term	BWR BB+ /Stable Upgrade and Removed from the INC category	BWR BB + /Stable Reaffirmation
	(5.00)	(0.00)
	(5.00)	(0.00)
	(0.00)	(5.00)
Grand Total	16.50	29.00	(Rupees Twenty Nine 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

The reaffirmation in the rating draws strength from the vast business experience of the promoters, an established track of operations, a comfortable financial /credit risk profile, and a diversified customer base. However, the rating is constrained on account of susceptibility to raw material price movement, supplier concentration risk and modest scale of operations. BWR also notes that the overall scale of operations of the company should improve in the near to medium term upon completion of the project of capacity expansion in FY25. although there was time over run in completion of this project due to delay in civil work and power issues , there was no cost over run as entire project of capacity expansion of Rs 6-7 Crs was funded from internal accruals. However stabalaization risk of increased capacity would be key ratings monitorable.

KEY RATING DRIVERS

Credit Strengths:

Experienced Management :
The promoters of the company Mr. Shivratan Dhandharia and Mr. Rameshwar Roy, directors of the company have experience of ~ two decades in the industry. This has given them a deep understanding of the market dynamics and has helped the company foresee price trends and make purchasing and stocking decisions. The moderate presence since inception has also established a healthy relationship with the customers and suppliers. The extensive experience of promoters and their established relationships with customers and suppliers should continue to support the business risk profile over the medium term
Comfortable financial risk profile: :
The company has a comfortable net worth of Rs. 31.70 crores as on March 31, 2024, on account of steady plough back of profits over the years. Due to efficient management of the working capital cycle, there is low dependence on external borrowings, which has consequently resulted in a comfortable capital structure, reflected in gearing and total outside liabilities to tangible networth (TOLTNW) of 0.75 time and 0.80 time, respectively as on March 31, 2024. The debt protection metrics are comfortable due to limited interest expenditure as reflected in the interest cover and net cash accruals to Total debt ratio of 3.61 times and 0.19 times as on March 31, 2024.
Diversified customer base and long relationships with customers :
Strong long-standing relationship with customers and a diverse customer base gives company an advantage against competitors. Also, company has limited customer concentration risk as the Top five customers account for ~62% of Total Operating income in FY24. Although exports are ~6.19% of Total operating income in FY24 , company is exporting to various countries such as such as UAE, Bangladesh, Thailand, Jordan , Nepal, and Vietnam either on an advanced basis or LC backed. In the domestic market also there is geographical diversificationas most of the sales are in states such as Gujarat, Uttar Pradesh, Andhra Pradesh, Rajasthan, Telangana, Tamilnadu and Maharashtra, thus leading to minimal geographical concentration risk.

Credit Risks:

Susceptible to raw material price movement :
Cost of production and profit margin of players are heavily dependent on raw material prices (Aluminium Ingot ). Furthermore, since Aluminium demand is closely linked to economic activity, players are susceptible to cyclicality in demand and fluctuations in realizations.TMPPL incurs 80% of its operating expense towards raw materials, Any downward movement in its raw materials price will have a negative impact on profits.
Supplier concentration Risk :
The company has almost fifteen years of relationship with suppliers and procurement of raw material Aluminium Ingot is on an advance basis, however, there is supplier concentration risk as top five suppliers cover ~94% of purchases in FY24. Most of the purchases are from the states of Maharashtra, Karnataka, and Chattisgarh
Modest scale of operations :
The company has a modest scale of operations, reflected in an operating income of Rs 94.23 Crore in fiscal 2024. The intense competition from several large organized and unorganized players keeps the scale of operations small and precludes benefits from economies of scale that are available to large players. The small scale also restricts the bargaining power with suppliers and customers. Total Operating income of the company increased by 30.59% to Rs.106.92 Crs in FY 23 as compared to Rs. 81.92 Crs in FY 22 due to an improvement in volume sold by 21%. However, in FY 24 the Total Operating income decreased by 11.91% to Rs. 94.23 Crs due to a decline in volume sold by 1.38% and a decline in price realization by 10.65%. Further Company has reported Total Operating income of Rs 49.12 Crs in H1FY25 and PAT of Rs 1.41 Crs in H!FY25 and it is estimated scale of operations should be improved in the near to medium term on completion of the project of capacity expansion in FY25. Stabalaization risk of increased capacity would be key ratings monitorable

ANALYTICAL APPROACH - Standalone

BWR has considered the standalone approach.

RATING SENSITIVITIES

Positive: BWR may revise the ratings upward, if the company’s scale of operations improves on a sustained basis , along with improvement in operating margins above 10%, debt coverage indicators, and liquidity position.

Negative: BWR may revise the ratings downwards if the company’s scale of operations declines on a sustained basis , coupled with a decline in the debt coverage indicators and/or liquidity position.

LIQUIDITY INDICATORS - Stretched

Company is expected to register cash accruals of Rs 4.53 Crs against repayment obligations of Rs 1.22 Crs in FY25. Compnay reported cash balances of Rs 0.16 Crs in FY24. The average utilization of the cash credit facility is 71% during the period March 2024 to Aug 2024. The current ratio has increased and stood above the benchmark level at 2.22 times in FY24 as compared to 2.12 times in FY23,. Cash conversion cycle deteriorated to 158 days in FY24 as compared to 118 days in FY23 due to elongation in receivable and inventory days. Liquidity is stretched due to low cash balance of Rs 0.16 Crs in FY24 and elongated workinhg capital cycle of 158 days in FY24.

ABOUT THE ENTITY

Macro Economic Indicator	Sector	Industry	Basic Industry
Commodities	Metals & Mining	Diversified Metals	Diversified Metals

Tankeshwari Metal Powder Products Pvt. Ltd.(TMPPL) was incorporated in the year 2007, with a registered office at Rabindra Sarani, Poddar Court, Kolkata, West Bengal. TMPPL has its manufacturing unit at Aheri, Durg, Chhattisgarh, over an area of around 7.5 acres registered in the name of the Company. TMPPL has started its commercial operations of manufacturing Aluminium Powder, Aluminium flakes and Aluminium Paste from 01 Nov 2008. The company runs under the directorship of Mr. Shivratan Dhandharia and Mr. Rameshwar Roy. The overall installed capacity of the company has increased from 5565 MT to 7050 MT on an annual basis in FY 24. Capacity utilization of the company stood at 79.26% in FY24.

KEY FINANCIAL INDICATORS (Standalone)

Key Parameters	Units	FY 21 - 22 (Audited - Annual)	FY 22 - 23 (Audited - Annual)	FY 23 - 24 (Audited - Annual)
Operating Revenue	Rs.Crs.	81.92	106.98	94.23
EBITDA	Rs.Crs.	7.08	6.65	7.66
PAT	Rs.Crs.	3.73	3.47	3.51
Tangible Net Worth	Rs.Crs.	24.72	28.19	31.70
Total Debt / Tangible Net Worth	Times	0.93	0.85	0.75
Current Ratio	Times	3.10	2.12	2.22

KEY COVENANTS OF THE FACILITY RATED

The terms of sanction include standard covenants normally stipulated for such facilities .

STATUS OF NON-COOPERATION WITH PREVIOUS CRA

Creadit Rating Agency Status and Reason for Non-Cooparation Date of Press Release
CRISIL Crisil has reaffirmed the ratings at B+(Stable)/A4 , in ISSUER NOT COOPERATING catergory as on 14 October 2024 14Oct2024

Creadit Rating Agency	Status and Reason for Non-Cooparation	Date of Press Release
CRISIL	Crisil has reaffirmed the ratings at B+(Stable)/A4 , in ISSUER NOT COOPERATING catergory as on 14 October 2024	14Oct2024

ANY OTHER INFORMATION

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
Fund Based	LT	29.00	BWR BB+/Stable (Reaffirmation)	19May2023	BWR BB- Stable (Continues to be in ISSUER NOT COOPERATING* category/Downgraded)	29Apr2022	BWR BB+ Stable (Reaffirmation/ISSUER NOT COOPERATING)	02Feb2021	BWR BB+ Stable (Reaffirmation)
		0.00	NA	28Aug2023	BWR BB+ Stable (Upgrade and Removed from the INC category)	NA	NA	NA	NA
Non Fund Based	LT	0.00	NA	19May2023	BWR BB- Stable (Continues to be in ISSUER NOT COOPERATING* category/Downgraded)	29Apr2022	BWR BB+ Stable (Reaffirmation/ISSUER NOT COOPERATING)	02Feb2021	BWR BB+ Stable (Reaffirmation)
		0.00	NA	28Aug2023	BWR BB+ Stable (Upgrade and Removed from the INC category)	NA	NA	NA	NA
NFB SubLimit	LT	(5.00)	BWR BB+/Stable (Reaffirmation)	NA	NA	NA	NA	NA	NA
		(5.00)	BWR BB+/Stable (Reaffirmation)	NA	NA	NA	NA	NA	NA
Non Fund Based	ST	0.00	NA	19May2023	BWR ()	29Apr2022	BWR ()	02Feb2021	BWR ()
		0.00	NA	28Aug2023	BWR ()	NA	NA	NA	NA
Grand Total		29.00	(Rupees Twenty Nine Crores Only)

Hyperlink/Reference to applicable Criteria

Analytical Contacts
Karan Ahluwalia Ratings Analyst karan.ahluwalia@brickworkratings.com	Ravi Rashmi Dhar Associate Director - Ratings ravi.d@brickworkratings.com
1-860-425-2742 \| media@brickworkratings.com

Tankeshwari Metal Powder Products Pvt Ltd

ANNEXURE-I

Details of Bank Facilities rated by BWR

SL.No.	Name of the Bank/Lender	Type Of Facilities	Long Term(Rs.Crs.)	Short Term(Rs.Crs.)	Total(Rs.Crs.)	Complexity of the Instrument
1	Axis Bank Ltd.	Cash Credit - Sanctioned	29.00	_	29.00	Simple##
	Sub-Limit (BG) - Sanctioned	(5.00)
	Sub-Limit (EPC/RPC/PCFC) - Sanctioned	(0.00)
	Sub-Limit (FBP/FBD/EBRD/PSCFC/Collection Bill) - Sanctioned	(0.00)
	Sub-Limit (LC/BG) - Sanctioned	(5.00)
Total			29.00	0.00	29.00
TOTAL (Rupees Twenty Nine Crores 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.

ANNEXURE-II

INSTRUMENT DETAILS

Instrument	Issue Date	Amount (Rs.Crs)	Coupon Rate (%)	Maturity Date	ISIN Particulars	Complexity of the Instrument
Nil	Nil	Nil	Nil	Nil	Nil	Nil

ANNEXURE-III

List of entities consolidated

Name of Entity	% Ownership	Extent of consolidation	Rationale for consolidation
Nil	Nil	Nil	Nil

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