RATING RATIONALE

23Jan2025

Super Gold Suitings Pvt. Ltd

Brickwork Ratings Upgraded the long term and short term ratings for the Bank Loan Facilities of Rs. 68.69 Crs. of Super Gold Suitings Pvt. Ltd and removed the rating from the Issuer not Cooperating Category.

Particulars

Facilities**	Amount (Rs.Crs.)		Tenure	Rating#
Facilities**	Previous	Present	Tenure	Previous (11 Apr 2024)	Present
Fund Based	55.92	68.69	Long Term	BWR BB /Stable Continues to be in ISSUER NOT COOPERATING* category/Downgraded	BWR BBB /Stable Upgrade and Removed from the INC category
Non Fund Based	(32.00)	(40.00)	Short Term	BWR A4 Continues to be in ISSUER NOT COOPERATING* category/Downgraded	BWR A3 + Upgrade and Removed from the INC category
	(15.00)	(15.00)
	(7.50)	(7.50)
Grand Total	55.92	68.69	(Rupees Sixty Eight Crores and Sixty Nine lakhs 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 Upgraded the long-term rating to BWR BBB /Stable and short-term ratings to BWR A3+ and removed them from the "ISSUER NOT COOPERATING" category for the bank loan facilities of Super Gold Suitings Pvt. Ltd.

The rating upgrade takes into account the healthy experience of the promoters, the Comfortable Financial Risk Profile, and solvency position in FY24, and the adequate liquidity profile of the company and comfortable debt protection metrics. The ratings are, however, constrained by the susceptibility of profitability margins to any adverse movements in the raw material prices, the fragmented and competitive nature of the industry, and the cyclicality associated with the sector.

For assigning the ratings, BWR has relied upon the last three year audited financials till FY24, Projected financials for FY25 and FY26, and publicly available information and clarification provided by the management

BWR believes SGSPL's business risk profile is likely to 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' if the revenues and profit show sustained and significant improvement coupled with a comfortable solvency position of the company. The rating outlook may be revised to 'Negative' if the revenue declines considerably, profit margins are much lower than the expected figures, and/or there is a significant deterioration in the solvency or liquidity profile of the company.

KEY RATING DRIVERS

Credit Strengths:

Extensive experience of the promoters with an integrated nature of operations :
The company is promoted by Mr. Shyam Sunder Chandak (Chairman) and Mr. Manish Chandak (Director) who have rich industry experience. Mr. Shyam Sunder Chandak started his career with fabric trading and thereafter in 2001, formed a company in the name and style of Super Gold Suiting Pvt Ltd. He is supported by qualified and experienced management personnel to run the day-to-day operations. The company has an integrated nature of operations ranging from dying, and weaving to finishing and has an established as well as diversified customer base.
Comfortable Financial Risk Profile :
Networth was healthy at Rs 96.18 crore while gearing was low at 0.89 times as of March 31, 2024, owing to low reliance on external debt. Debt protection metrics are also comfortable, with interest coverage and net cash accrual to total debt ratios of 5.82 times and 0.26 times, respectively, for fiscal 2024. Gearing is expected to decrease during fiscal 2025, with better accretion to reserves and repayment of long-term debt.
Improving revenue from operation and PAT :
The company has been showing a moderate scale of operations, as indicated by the total operating income, which decreased by 4.59% to Rs 287.39 Crs in FY24 (Audited), compared to Rs 301.21 Crs in FY23 (Audited). However, the PAT increased to Rs 9.58 Crs in FY24, compared to Rs 6.51 Crs in FY23, due to improved operational efficiency. The company has achieved a revenue of Rs 270.97 Crs as of 14-01-2025. Furthermore, it is expected to achieve a total operating income of Rs 325 Crs in FY25(Projected), based on the average growth in operating income over the past two years.
Debt Protection Metrics :
DSCR and ISCR of the company stand at 3.37 times and 5.82 times respectively in FY24(Audited) indicating company’s adequacy to meet its debt obligations

Credit Risks:

Vulnerability of profitability margins to adverse fluctuations in key raw material prices :
The margins of the company are largely affected by the raw material price fluctuation which in turn affects the sales realisations. Also, any adverse movement in the price of key raw materials like cotton yarn could have an adverse impact on the company’s margins, as the company may not be able to pass on the price hike to its customers owing to the competitive nature of the industry.
The fragmented and competitive nature of the industry, with cyclicality associated with the denim sector :
The industry is highly fragmented, with a large number of organized and unorganized players and intense competition due to low entry barriers (on account of low capital and technology intensity and low differentiation in end product) which limits the pricing flexibility. The denim sector is also cyclical in nature with demand depending on the overall health of the economy.

ANALYTICAL APPROACH - Standalone

For arriving at its ratings, Brickwork Ratings has adopted a standalone approach and applied its rating methodology as detailed in the Rating criteria.

RATING SENSITIVITIES

Going forward, the ability of the company to increase its scale of operations, improve profitability, efficiently manage its working capital, and strengthen its overall credit profile would be the key rating sensitivities.

Positive: The ratings may be upgraded if the company is able to report substantial and sustained improvement in revenue and profitability levels (15%) coupled with improved working capital cycle and overall solvency position, and maintain an adequate liquidity profile.

Negative: The rating may be to downgraded if the company reports significantly lower than expected performance, in the revenues and profit margins (-15%), interest coverage ratios and debt coverage metrics, and a high inventory position, resulting in deterioration in the Company’s liquidity position and any delays in payment of its debt obligations would also be a negative factor.

LIQUIDITY INDICATORS - Adequate

The Company's liquidity position is adequate. The company has been generating adequate average EBITDA of Rs 19.01 Crs in the last 3 years FY22~24 against an average interest cost of Rs. 3.46 Crs during the same period. The company had a scheduled repayment obligation of 6.33 Crs in FY24. Net Cash Accruals of Rs 21.93 Crs as against the CPLTD 6.33 Crs in FY24(Audited). In FY25, the company is estimated to generate a net cash accrual of Rs 21.83 Crs with an annual repayment CPLTD of Rs 5 Crs. The tangible net worth increased to Rs. 96.18 Crs in FY24(Audited), as compared to Rs. 88.27 Crs in FY23(Audited). The company’s average utilisation of cash credit facility from HDFC Bank stood at 15 to 20% in the past 12 months (ended Dec -2024) Further, the company doesn't have any plans to go for debt-funded capex for another 2-3 years. The cash conversion cycle of the company stood moderate at 75 days (PY: 50 days) with gross receivable days of 73 days in FY24 (PY: 49 days)

ABOUT THE ENTITY

Macro Economic Indicator	Sector	Industry	Basic Industry
Consumer Discretionary	Textiles	Textiles & Apparels	Other Textile Products

Super Gold Suiting Private Limited was incorporated on 24.07.2001 and was into trading of different types of fabric like shirting, suiting etc. Later on after 10 years of successfully being settled in the textile world, Later on, the company introduced a Weaving Unit and a Yarn Texturing Unit. SGSPL is the 6th company which has come up with a denim plant in Rajasthan and the 3rd company to set up a textured yarn plant in Rajasthan (India). The Company has three Lines of Manufacturing and an Installed capacity of 363.00 Lakh Meter Fabric PA. The registered office and manufacturing facility is located in Bhilwara, Rajasthan. The company is led by Mr. Shyam Sunder Chandak, who is supported by Mr. Manish Chandak, Mrs. Vijay Laxmi Chandak, and Mrs. Shital Chandak.

KEY FINANCIAL INDICATORS (Standalone)

Key Parameters	Units	FY 21 - 22 (Audited)	FY 22 - 23 (Audited)	FY 23 - 24 (Audited)
Operating Revenue	Rs.Crs.	247.95	301.21	287.39
EBITDA	Rs.Crs.	15.74	15.22	26.08
PAT	Rs.Crs.	6.88	6.51	9.58
Tangible Net Worth	Rs.Crs.	81.65	88.27	96.18
Total Debt / Tangible Net Worth	Times	0.66	0.64	0.89
Current Ratio	Times	1.80	1.41	1.61

KEY COVENANTS OF THE FACILITY RATED

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

Minimum DSCR To Be Maintained at 1x during The Currency of Facility Including Proposed TL Obligation.

STATUS OF NON-COOPERATION WITH PREVIOUS CRA

Not Applicable

ANY OTHER INFORMATION

Not Applicable

RATING HISTORY FOR THE PREVIOUS THREE YEARS (including withdrawal and suspended)

Facilities	Current Rating (2025)			2024		2023		2022
Type	Tenure	Amount (Rs.Crs.)	Rating	Date	Rating	Date	Rating	Date	Rating
Fund Based	LT	68.69	BWR BBB/Stable (Upgrade and Removed from the INC category)	11Apr2024	BWR BB Stable (Continues to be in ISSUER NOT COOPERATING* category/Downgraded)	24Jan2023	BWR BB+ Stable (Downgrade/ISSUER NOT COOPERATING*)	14Jan2022	BWR BBB Stable (Reaffirmation)
NFB SubLimit	ST	(40.00)	BWR A3+ (Upgrade and Removed from the INC category)	11Apr2024	BWR A4 (Continues to be in ISSUER NOT COOPERATING* category/Downgraded)	24Jan2023	BWR A4+ (Downgrade/ISSUER NOT COOPERATING*)	14Jan2022	BWR A3+ (Reaffirmation)
NFB SubLimit	ST	(15.00)	BWR A3+ (Upgrade and Removed from the INC category)	NA	NA	NA	NA	NA	NA
NFB SubLimit	ST	(7.50)	BWR A3+ (Upgrade and Removed from the INC category)	NA	NA	NA	NA	NA	NA
Grand Total		68.69	(Rupees Sixty Eight Crores and Sixty Nine lakhs Only)

Hyperlink/Reference to applicable Criteria

Analytical Contacts
Md Saif Ali Khan Rating Analyst saifali.k@brickworkratings.com	Ravi Rashmi Dhar Associate Director - Ratings ravi.d@brickworkratings.com
1-860-425-2742 \| media@brickworkratings.com

Super Gold Suitings 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	Canara Bank	Term Loan - Out-standing	_	_	0.00	Simple##
2	HDFC Bank	Term Loan - Out-standing	6.07	_	6.07	Simple##
3	HDFC Bank	Term Loan - Out-standing	22.62	_	22.62	Simple##
4	HDFC Bank	Cash Credit - Sanctioned	40.00	_	40.00	Simple##
	Sub-Limit (Bank Guarantee) - Sanctioned		(7.50)
	Sub-Limit (Cash Credit EPC/PSC) - Sanctioned		(40.00)
	Sub-Limit (Letter of Credit) - Sanctioned		(15.00)
5	HDFC Bank	GECL - Out-standing	_	_	0.00	Simple##
Total			68.69	0.00	68.69
TOTAL (Rupees Sixty Eight Crores and Sixty Nine 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.

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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About Brickwork Ratings

Brickwork 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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