Brickwork Ratings reaffirms the ratings for the Bank Loan Facilities of Rs. 54.29 Crs. of Shiva Global Agro Industries Ltd.
ParticularsFacilities** | Amount (Rs.Crs.) | Tenure | Rating# | ||
---|---|---|---|---|---|
Previous | Present | Previous (14 Oct 2020) |
Present | ||
Fund Based | 32.00 | 36.29 | Long Term |
BWR BBB-/Stable
Assignment |
BWR BBB -
/Stable Reaffirmation |
Non Fund Based | 18.00 | 18.00 | Short Term |
BWR A3
Assignment |
BWR A3
Reaffirmation |
(6.00) | (6.00) | ||||
(6.00) | (6.00) | ||||
Grand Total | 50.00 | 54.29 | (Rupees Fifty Four Crores and Twenty Nine lakhs Only) |
Brickwork Ratings(BWR) reaffirms the ratings for Bank Loan facilities of Rs.54.29 Crs of Shiva Global Agro Industries Ltd. (SGAIL or the Company)
KEY RATING DRIVERSCredit Strengths:
The main promoter of SGAIL, Mr. Omprakash Gilda has vast experience of more than three decades in agriculture and fertilizer business. He is the Managing director of the Company and the other directors of the Company are also associated with SGAIL for more than two decades and are actively involved in the day to day business operations of SGAIL.
SGAIL is involved in the manufacturing of fertilizers for nearly 29 years. Over the years, the Company has developed a wide distribution network of more than 300 dealers across Maharashtra and has successfully established its brands ‘TRISHUL’, ‘VARDAN’ and ‘BHUMATA’ in the state of Maharashtra.
The Company reported 88% increase in TOI in FY21 to Rs.175.14 Crs backed by strong demand in the region due to healthy monsoon.
As on March 31, 2021, due to a moderate networth base of Rs.58.88 Crs coupled with limited dependence on working capital borrowings, total gearing of SGAIL remained comfortable at 0.33x (FY20:0.31x). TOL/TNW of the Company is also remained comfortable at 0.43x as against 0.77x as on March 31, 2020. Due to lower working capital utilisation during the year, interest expenses decreased in FY21, resulting in improvement in ISCR to 5.09x as compared to 2.76x for FY20 and the same has further improved in Q1FY22 due to increase in subsidiary on fertilizers.
Credit Risks:
To meet the increased demand in the market the Company increased its trading activities, as a result, its operation profit margin for FY21 decreased to 4.30% from 7.22% in FY20. Trading income accounted for 41% in FY21 as compared to 29% in FY20.
However, operating profit margins has improved to 9.17% in Q1FY22.
The demand for Company’s products are generated in the agriculture sector which itself is vulnerable to various agro-climatic factors like intensity and timeliness of monsoon, government MSP changes, timely availability of agriculture credit, timely accessibility to market etc. Besides these, the fertilizer industry has been highly regulated in India with regulations spanning from production capacity to prices at which the industry can sell the fertilizers in the market. Also, the subsidy on fertilizers keeps changing every year depending on the government budget.
BWR has relied upon standalone audited financials of the Company upto FY21, unaudited results for Q1FY22 and projected financials upto FY23, publicly available information and clarifications/information provided by the management.
RATING SENSITIVITIES
Positive: The ability of the Company to sustain improvement in credit metrics and scale of operations would be positive for the ratings.
Negative: Decline in scale of operations and any further decrease in profit margins would be negative for the ratings.
LIQUIDITY INDICATORS - Adequate
The liquidity position of the Company is adequate as its current ratio as on March 31, 2021 is comfortable at 2.62x and its had a cash & bank balance of Rs.0.23 Crs. The average CC utilisation for last 6 months ended September 2021 is 81% and the Company is expected to generate cash accruals of Rs.7.53 Crs and Rs.8.78 Crs respectively in FY22 and FY23 as against principal debt repayment of Rs.3.07 Crs and Rs.1.28 Crs respectively.
ABOUT THE ENTITYShiva Global Agro Industries Ltd. (SGAIL) is a Nanded, Maharashtra based company incorporated in 1993 and engaged in manufacturing of fertilizers and trading of fertilizers as well as seeds. SGAIL was listed on BSE in 1995.
SGAIL is a flagship company of Maharashtra based Shiva Group consisting of its subsidiaries i.e. Shrinivasa Agro Foods Pvt. Ltd. (SAFPL - 51% subsidiary), Ghatprabha Fertilisers Pvt. Ltd. (GFPL- 61.53% subsidiary), Shiva Parvati Poultry Feeds Pvt. Ltd. (SPPFPL-51% subsidiary),
SGAIL manufactures Single Super Phosphate (SSP) & granulated NPK mix fertilizers, Beneficiated Rock Phosphate and Bio-mass Briquettes.
In Nanded, SGAIL has two manufacturing plant, one for SSP and one for NPK fertilizers manufacturing with installed capacity of 1,20,000 MTPA and 72,000 MTPA respectively.
KEY FINANCIAL INDICATORS (Standalone)Key Parameters | Units |
FY 20-21 (Audited) |
FY 19-20 (Audited) |
---|---|---|---|
Operating Revenue | Rs.Crs. | 175.14 | 92.85 |
EBITDA | Rs.Crs. | 7.54 | 6.70 |
PAT | Rs.Crs. | 4.03 | 3.13 |
Tangible Net Worth | Rs.Crs. | 58.88 | 54.85 |
Total Debt/Tangible Net Worth | Times | 0.33 | 0.31 |
Current Ratio | Times | 2.62 | 1.69 |
Facilities | Current Rating (2021) | 2021 (History) | 2020 | 2019 | 2018 | ||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Type | Tenure | Amount (Rs.Crs.) |
Rating | Date | Rating | Date | Rating | Date | Rating | Date | Rating |
Fund Based | LT | 36.29 |
BWR BBB-/Stable
(Reaffirmation) |
14Oct2020 |
BWR BBB-Stable
(Assignment) |
NA |
NA
|
NA |
NA
|
NA |
NA
|
Non Fund Based | ST | 18.00 |
BWR A3
(Reaffirmation) |
14Oct2020 |
BWR A3
(Assignment) |
NA |
NA
|
NA |
NA
|
NA |
NA
|
NFB SubLimit | ST | (6.00) |
BWR A3
(Reaffirmation) |
NA |
NA
|
NA |
NA
|
NA |
NA
|
NA |
NA
|
(6.00) |
BWR A3
(Reaffirmation) |
NA |
NA
|
NA |
NA
|
NA |
NA
|
NA |
NA
|
||
Grand Total | 54.29 | (Rupees Fifty Four Crores and Twenty 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.
Hyperlink/Reference to applicable CriteriaAnalytical Contacts | |
---|---|
Prashant Sahadev Mondkar Ratings Analyst Board : +91 22 2831 1426, +91 22 2831 1439 prashant.sm@brickworkratings.com |
Chintan Dilip Lakhani Director- Ratings chintan.l@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 | Union Bank of India | Cash CreditSanctioned | 32.00 | _ | 32.00 | |
2 | Union Bank of India | Foreign Letter of Credit (FLC)Sanctioned | _ | 18.00 | 18.00 | |
Sub-Limit (Bank Guarantee) Sanctioned | (6.00) | |||||
Sub-Limit (Inland LC) Sanctioned | (6.00) | |||||
3 | Union Bank of India | Covid -19 Emergency Line CreditSanctioned | 1.24 | _ | 1.24 | |
4 | Union Bank of India | GECLSanctioned | 3.05 | _ | 3.05 | |
Total | 36.29 | 18.00 | 54.29 | |||
TOTAL (Rupees Fifty Four Crores and Twenty Nine lakhs Only) |
Name of Entity | % Ownership | Extent of consolidation | Rationale for consolidation |
---|---|---|---|
Shrinivasa Agro Foods Pvt. Ltd. | 51 | 100% | subsidiary |
Ghatprabha Fertilisers Pvt. Ltd. | 62.53 | 100% | Subsidiary |
Shiva Parvati Poultry Feeds Pvt. Ltd. | 51 | 100% | Subsidiary |
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