Brickwork Ratings reaffirms the ratings for the Bank Loan Facilities of Rs. 59.00 Crs. of Lakshmi Transformers & Electricals
ParticularsFacilities** | Amount (Rs.Crs.) | Tenure | Rating# | ||
---|---|---|---|---|---|
Previous | Present | Previous (31 Dec 2020) |
Present | ||
Fund Based | 9.00 | 9.00 | Long Term |
BWR BB+/Stable
Reaffirmation |
BWR BB +
/Stable Reaffirmation |
Non Fund Based | 50.00 | 50.00 | Short Term |
BWR A4+
Reaffirmation |
BWR A4 +
Reaffirmation |
Grand Total | 59.00 | 59.00 | (Rupees Fifty Nine Crores Only) |
BWR reaffirms the ratings of long term facility as BWR BB+ (Stable) and short term facility as A4+ for the bank loan facilities to Lakshmi Transformers & Electricals.
The rating draws strength from Experienced Partners and long operational track record and a Moderate financial risk profile. However, the rating is constrained by Constitution Risk, Business Concentration Risks, and High competition.
BWR believes that Lakshmi Transformers & Electricals 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 revenues and profit show sustained improvement. The rating outlook may be revised to 'Negative' if there is any deterioration in financial risk profile.
KEY RATING DRIVERSCredit Strengths:
Lakshmi Transformers & Electricals, initially incorporated in 1992 and now working as a partnership firm. It is engaged in the business of manufacturing and marketing Power and Distribution transformers and executing turnkey projects relating to electrification. The Partners Mr. Siddharth Singhal, Mr. Sanjay Singhal, and Mrs. Seema Singhal have more than 2 decades of experience.
The revenues increased by 44.20% yoy from Rs.70.20 crs in FY20 to Rs.101.23 crs in FY21. The management informed that the entity has achieved gross sales of Rs. 33 crs. from April 2021 to August 2021. The tangible net worth has slipped from Rs. 28.36 crs. in FY20(A) to Rs. 27.11 crs. in FY21(A). Total Debt/TNW stood the same at 0.01x in FY21(A). Moderate debt protection metrics with ISCR improved to 3.11x in FY21(A) as against 2.80x in FY20(A) and DSCR increased from 2.29x in FY20(A) to 2.63x in FY21(A). Net Profit Margin improved to 2.93% in FY21(A) as against 2.82% in FY20(A) and Operating Profit Margin slipped from 5.99% in FY20(A) to 5.77% in FY21(A). The current ratio slipped from 1.82x in FY20(A) to 1.79x in FY21(A).
The entity being a partnership firm is vulnerable to risks arising from changes in business structure and risk of withdrawal of capital in case of personal exigencies.
Due to the inherent nature of business, the firm derives its business primarily from government entities. Further, the majority of the revenues are received from state government departments located in Uttar Pradesh. Hence business is susceptible to regional concentration and political risks.
Transformer industry is characterised by low entry barriers and presence of large number of medium players that tend to increase competition and reduce the bargaining power of suppliers.
Lakshmi trans Power Ltd. is a group associate of Lakshmi Transformers and Electricals but there is no operational linkage between them.
1. The company has Cash & Bank balances of Rs. 14.78 Crs in FY20(A). The company has Cash & Bank Balance of Rs 12.95 crs. in FY20(A).
2. Long term borrowings of Rs.0.22 crs in FY21(A) comprises of unsecured loans from Sanjay SInghal (Partner).
3. ISCR is at 3.11x in FY21(A) and DSCR is at 2.63x in FY21(A).
4. The current ratio is 1.79x in FY21(A).
5. Conversion Cycle is 0 days in FY21(A).
6. Average CC utilization from March 2021 to August 2021 is 0%.
ABOUT THE ENTITYLakshmi Transformers & Electricals, initially incorporated in 1992 and now working as partnership firm with its registered office at B-8, Site A, UPSIDC Industrial Area, Sikandra, Agra, U.P is engaged in the business of manufacturing and marketing of Power and Distribution transformers and executing turnkey projects relating to electrification. Siddharth Singhal, Sanjay Singhal, Seema Singhal and Lakshmi Trans Powers Limited are the partners in the firm. The firm has two manufacturing units located in Agra of UP and caters primarily to government departments majorly in UP (75%) and also to Rajasthan, Madhya Pradesh, Maharashtra and other states. While the 3 firm has been involved in executing business sourced fully from government departments, over the past few years, the firm has started sourcing from private entities as well and has also commenced exports, although in a small measure
KEY FINANCIAL INDICATORS (Standalone)Key Parameters | Units |
FY 20-21 (Audited) |
FY 19-20 (Audited) |
---|---|---|---|
Operating Revenue | Rs.Crs. | 101.23 | 70.20 |
EBITDA | Rs.Crs. | 5.84 | 4.20 |
PAT | Rs.Crs. | 2.96 | 1.98 |
Tangible Net Worth | Rs.Crs. | 27.11 | 28.36 |
Total Debt/Tangible Net Worth | Times | 0.01 | 0.01 |
Current Ratio | Times | 1.79 | 1.82 |
Facilities | Current Rating (2021) | 2020 | 2019 | 2018 | |||||
---|---|---|---|---|---|---|---|---|---|
Type | Tenure | Amount (Rs.Crs.) |
Rating | Date | Rating | Date | Rating | Date | Rating |
Fund Based | LT | 9.00 |
BWR BB+/Stable
(Reaffirmation) |
31Dec2020 |
BWR BB+Stable
(Reaffirmation) |
24Jan2019 |
BWR BB-Stable
(Reaffirmation/ISSUER NOT COOPERATING*) |
NA |
NA
|
NA |
NA
|
NA |
NA
|
25Oct2019 |
BWR BB+Stable
(Upgrade) |
NA |
NA
|
||
Non Fund Based | ST | 50.00 |
BWR A4+
(Reaffirmation) |
31Dec2020 |
BWR A4+
(Reaffirmation) |
24Jan2019 |
BWR A4
(Reaffirmation/ISSUER NOT COOPERATING*) |
NA |
NA
|
NA |
NA
|
NA |
NA
|
25Oct2019 |
BWR A4+
(Upgrade) |
NA |
NA
|
||
Grand Total | 59.00 | (Rupees Fifty 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.
Hyperlink/Reference to applicable CriteriaAnalytical Contacts | |
---|---|
Vishesh Phogaat Ratings Analyst vishesh.p@brickworkratings.com |
V.K.Kukreja Associate Director - Ratings Board : +91 11 2341 2232 kukreja.vk@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 | Punjab National Bank | Cash CreditSanctioned | 9.00 | _ | 9.00 | |
2 | Punjab National Bank | Bank GuaranteeSanctioned | _ | 35.00 | 35.00 | |
3 | Punjab National Bank | ILC/FLCSanctioned | _ | 15.00 | 15.00 | |
Total | 9.00 | 50.00 | 59.00 | |||
TOTAL (Rupees Fifty Nine Crores Only) |
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