RATING RATIONALE
09Aug2021

Srinivasa Sales & Services Pvt. Ltd.

Brickwork Ratings upgrades the ratings for the Bank Loan Facilities of Rs. 22.40 Crs. of Srinivasa Sales & Services Pvt. Ltd.

Particulars
Facilities** Amount (Rs.Crs.) Tenure Rating#
Previous Present Previous
(25 Sep 2020)
Present
Fund Based 8.01 16.10 Long Term BWR B /Stable(Issuer Not Cooperating)
Downgraded
BWR BB /Stable
Upgrade
Non Fund Based 4.30 6.30 Short Term BWR A4(Issuer Not Cooperating)
Reaffirmed
BWR A4 +
Upgrade
Grand Total 12.31 22.40 (Rupees Twenty Two Crores and Forty 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

Brickwork Ratings has upgraded the long term rating to 'BWR BB/Stable' and also upgraded the short term rating to 'BWR A4+' and removed the ratings from "Issuer Not Cooperating" category for the bank loan facilities of Srinivasa Sales & Services Pvt. Ltd.

The Rating has factored, inter alia , the extensive business experience of directors of the company, reputed client base, adequate liquidity, comfortable debt protection metrics and stable revenue from operations. However, the rating is constrained by moderate financial risk profile and thin profitability margins. Going forward, the ability of the company to increase revenues, improve its profitability margins, strengthen its credit risk profile and manage its working capital efficiently will remain the key rating sensitivities.

The rating outlook has been assigned as "Stable" as BWR believes that Srinivasa Sales & Services Pvt. Ltd. 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 the revenue and profitability margins show sustained improvement. The rating outlook may be revised to 'Negative' if the financial risk profile goes down.

KEY RATING DRIVERS

Credit Strengths:


Credit Risks:

ANALYTICAL APPROACH - Standalone

 BWR has essentially relied upon the audited financials from FY18 to FY20, Provisional financials of FY21 and projections of FY22 & FY23 , publicly available information and clarifications provided by the management.

RATING SENSITIVITIES

The ability of the entity to increase revenues, improve its profitability margins, strengthen its credit risk profile and manage its working capital efficiently would remain the key rating sensitivities.

Positive

Negative

LIQUIDITY INDICATORS - Adequate

The liquidity position of the company is adequate with sufficient cushion in net cash accruals vis-vis debt repayment obligations in FY20. The current ratio stood at 1.40 times in FY20. The cash conversion cycle stood in line  from FY18 to FY20. The cash and cash equivalents of the company stood at Rs.0.5 crores as on March 31,2020. 

ABOUT THE ENTITY

Srinivasa Sales and Services Private Limited (SSSPL) was constituted as a Private Limited Company during the year 2009, having its registered office in Vijayawada and is presently having its branch offices at Hyderabad, Vijayawada, Visakhapatnam and Odisha. SSSPL is an authorized Sales & Services Dealer for the States of Andhra Pradesh except Rayalaseema territory, Telangana and Odisha for products manufactured and market by "CUMMINS INDIA LIMITED". SSSPL is the Authorized Distributor for sales of CUMMIN INDIA LIMITED products namely CUMMINS Engines, Parts, Lubricants, batteries and takes care of after-market support of all Cummins Engines.

KEY FINANCIAL INDICATORS (Standalone)
Key Parameters Units FY 19-20
(Audited)
FY 18-19
(Audited)
Operating Revenue Rs.Crs. 100.32 110.45
EBITDA Rs.Crs. 4.91 4.97
PAT Rs.Crs. 1.19 1.31
Tangible Net Worth Rs.Crs. 12.31 11.10
Total Debt/Tangible Net Worth Times 1.36 1.75
Current Ratio Times 1.40 1.26
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

ICRA has downgraded the long-term rating from ICRA BB-/Stable to ICRA B+/Stable and reaffirmed the short-term rating at ICRA A4 for the Bank facilities of Srinivasa Sales and Service Private Limited with continuation in the 'Issuer Not Cooperating' category on June 22, 2020.

ANY OTHER INFORMATION

NA

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 16.10
BWR BB/Stable
(Upgrade)
25Sep2020
BWR B/Stable(Issuer Not Cooperating)
(Downgraded)
NA
NA
NA
NA
Non Fund Based ST 6.30
BWR A4+
(Upgrade)
25Sep2020
BWR A4(Issuer Not Cooperating)
(Reaffirmed)
NA
NA
NA
NA
Grand Total 22.40 (Rupees Twenty Two Crores and Forty lakhs 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

Roshan Ranjan

Ratings Analyst roshan.r@brickworkratings.com

Nagaraj K

Associate Director - Ratings Board : +91 80 4040 9940 nagaraj.ks@brickworkratings.com
1-860-425-2742 | media@brickworkratings.com
Srinivasa Sales & Services 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 Bank of Baroda Cash CreditSanctioned 6.00 _ 6.00
2 Bank of Baroda GECLOut-standing 0.38 _ 0.38
3 Bank of Baroda GECLOut-standing 1.11 _ 1.11
4 Bank of Baroda Bank GuaranteeSanctioned _ 6.30 6.30
5 HDFC Bank Corporate LoanOut-standing 0.33 _ 0.33
6 HDFC Bank Term LoanOut-standing 6.00 _ 6.00
7 ICICI Bank Corporate LoanOut-standing 0.28 _ 0.28
8 State Bank Of India (SBI) Electronic Dealer Finance System (e-DFS)Sanctioned 2.00 _ 2.00
Total 16.10 6.30 22.40
TOTAL (Rupees Twenty Two Crores and Forty lakhs Only)
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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 11,400 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. BWR has its corporate office in Bengaluru and a country-wide presence with its offices in Ahmedabad, Chandigarh, Chennai, Hyderabad, Kolkata, Mumbai and New Delhi along with representatives in 150+ locations.

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