RATING RATIONALE
29Jul2021

Accord Distillers & Brewers Pvt. Ltd(Formerly known as AM Breweries Pvt Ltd)

Brickwork Ratings reaffirms the ratings for the Bank Loan Facilities of Rs. 120.00 Crs. of Accord Distillers & Brewers Pvt. Ltd(Formerly known as AM Breweries Pvt Ltd)

Particulars
Facilities** Amount (Rs.Crs.) Tenure Rating#
Previous Present Previous
(02 Sep 2020)
Present
Fund Based 85.00 100.00 Long Term BWR BBB- /Negative
Removal from Credit Watch
BWR BBB - /Negative
Reaffirmation
Non Fund Based 6.50 20.00 Short Term BWR A3
Removal from Credit Watch
BWR A3
Reaffirmation
(20.00) (20.00)
Grand Total 91.50 120.00 (Rupees One Hundred Twenty 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 its rating on the bank facility of Accord Distillery and Breweries Pvt Ltd at BWR BBB-/Negative/BW A3

Outlook~ Negative

BWR expects the company to benefit from its promoter's extensive experience in the liquor industry and its market positioning in Tamil Nadu state. The outlook can be revised to stable if there is sustained growth in the revenue with improvement in operating profitability. While the outlook might change to positive if there is significant decline in exposure to group companies and improvement in financial risk profile. 

KEY RATING DRIVERS

Credit Strengths:


Credit Risks:

ANALYTICAL APPROACH - Standalone

BWR has applied its rating methodology as detailed in the Rating Criteria detailed below (hyperlinks provided at the end of this rationale). The company does not have any subsidiaries.

RATING SENSITIVITIES

Upward factor

1- Improvement in scale of operation and operating profitability, strengthening its liquidity position.

2- Improvement in current ratio to above 2 time.

Downward factor

1- Significant increase in exposure to group companies.

2- Deterioration in TOL/TNW to more than 2 times.

LIQUIDITY INDICATORS - Adequate

The company has adequate liquidity majorly supported by high unencumbered cash and bank balance of nearly Rs 14 crore as on March 31, 2021. Further bank lines are moderately utilised on an average 70-80% in the past 12 months ended March 2021. The company is estimated to report net cash accruals of around Rs 95-110 crores in fiscal 2022 and fiscal 2023 which is sufficient against its repayment obligation in the respective period. BWR believes that unutilised bank lines, unencumbered cash and bank balance and net cash accruals is sufficient to meet its repayment obligations and any incremental working capital requirements.

ABOUT THE ENTITY

Accord Distillers & Brewers Private Limited (ADBPL) was incorporated in 2010 and is located at Mahalingapuram, Chennai, Tamil Nadu. ADBPL is engaged in the production and sale of alcoholic beverages. The company produces two types of liquor viz., Indian Made Foreign Liquor (IMFL) and Brewery (beer). The Company sells its products to TASMAC (owned by the Government of Tamil Nadu). IMFL Unit manufactures ‘Indian Made Foreign Spirit’ near Kanchipuram, with a capacity to manufacture 13 lakh cases per month. Brewery Unit is a 300 HL Automatic Brewery. The unit is currently capable of producing 1 Million Hectolitres per annum which translates to 1 million cases per month. Mr J Sundeep Anand and Mrs J Srinisha are the directors of ADBPL.

KEY FINANCIAL INDICATORS (Standalone)
Key Parameters Units FY 20-21
(Provisional)
FY 19-20
(Audited)
Operating Revenue Rs.Crs. 828.42 930.64
EBITDA Rs.Crs. 175.01 117.22
PAT Rs.Crs. 77.59 44.37
Tangible Net Worth Rs.Crs. 563.65 468.53
Total Debt/Tangible Net Worth Times 0.30 0.22
Current Ratio Times 0.93 0.82

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 100.00
BWR BBB-/Negative
(Reaffirmation)
02Sep2020
BWR BBB-/Negative
(Removal from Credit Watch)
02Apr2019
BWR BBB-/Stable
(Upgraded)
NA
NA
NA
NA
13Jul2020
BWR BBB-
(Credit Watch with Term Loan Developing Implications)
NA
NA
NA
NA
NA
NA
02Apr2020
BWR BBB-/Negative
(Reaffirmed)
NA
NA
NA
NA
Non Fund Based ST 20.00
BWR A3
(Reaffirmation)
02Sep2020
BWR A3
(Removal from Credit Watch)
02Apr2019
BWR A3
(Upgraded)
NA
NA
NA
NA
13Jul2020
BWR A3
(Credit Watch with Term Loan Developing Implications)
NA
NA
NA
NA
NA
NA
02Apr2020
BWR A3
(Reaffirmed)
NA
NA
NA
NA
NFB SubLimit ST (20.00)
BWR A3
(Reaffirmation)
NA
NA
NA
NA
NA
NA
Grand Total 120.00 (Rupees One Hundred Twenty Crores Only)
COMPLEXITY LEVELS OF THE INSTRUMENTS - Simple

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

Avinash Nagesh Poojari

Ratings Analyst avinash.np@brickworkratings.com

Vidya Shankar

Principal Director - Ratings Board : +91 80 4040 9940 vidyashankar@brickworkratings.com
1-860-425-2742 | media@brickworkratings.com
Accord Distillers & Brewers Pvt. Ltd(Formerly known as AM Breweries 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.)
1 HDFC Bank Cash CreditSanctioned 50.00 _ 50.00
Sub-Limit (letter of credit) Sanctioned (20.00)
2 Punjab National Bank Cash CreditSanctioned 35.00 _ 35.00
3 Punjab National Bank Letter of CreditSanctioned _ 6.50 6.50
4 Punjab National Bank Cash CreditProposed 15.00 _ 15.00
5 Punjab National Bank Letter of CreditProposed _ 13.50 13.50
Total 100.00 20.00 120.00
TOTAL (Rupees One Hundred Twenty Crores Only)
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