Brickwork Ratings downgrades the ratings for the Bank Loan Facilities of Rs. 13.88 Crs. of FLIC Microwaves Pvt. Ltd.
ParticularsFacilities** | Amount (Rs.Crs.) | Tenure | Rating# | ||
---|---|---|---|---|---|
Previous | Present | Previous (11 Jun 2020) |
Present | ||
Fund Based | 12.48 | 12.38 | Long Term |
BWR B-/Stable
Downgrade/ISSUER NOT COOPERATING* |
BWR D
Downgrade |
Non Fund Based | 1.50 | 1.50 | Short Term |
BWR A4
Reaffirmation/ISSUER NOT COOPERATING* |
BWR D
Downgrade |
Grand Total | 13.98 | 13.88 | (Rupees Thirteen Crores and Eighty Eight lakhs Only) |
Brickwork Ratings has downgraded the long term rating to ‘BWR D’ and downgraded the short term rating to "BWR D' and removed the Ratings from "Issuer Not Cooperating" category for the bank loan facilities of FLIC Microwaves Pvt. Ltd.
The rating has factored, inter alia, extensive business experience of directors of nearly three decades, long existence of the company and well established client base. However, the rating is constrained by declining operating income, continuous PAT Loss, stretched liquidity and delays in payment obligations as confirmed by its Banker. Going forward, ability of the company to scale up its operations, to improve its profit margins, to improve its gearing and to regularise its debt repayments in an intensely competitive industry will remain the key rating sensitivities.
KEY RATING DRIVERSCredit Strengths:
The Directors are well experienced and have nearly three decades of experience in manufacturing microwave communication systems .
The company is in existence for 29 years with satisfactory business history.
The company has well established client base with well recognised clients such as Defence Research and Development Organisation (DRDO), Bharat Electronics Limited (BEL) , Defence Electronics Research Laboratory (DLRL) , Defence Avionics Research Establishment (DARE), etc.
The Total Operating Income of the company was declined from Rs. 9.41 Crores in FY19 to Rs. 8.19 Crores in FY20. Moreover, provisionally, the company has achieved total operating income of Rs. 7.81 Crores in FY21.
The company was registered PAT loss of 0.22 Crores in FY19 and PAT loss of Rs. 0.31 Crores in FY20. Moreover, provisionally, the company has PAT loss of Rs. 1.31 Crores in FY21.
The Gearing of the company was high with Total Debt to Tangible Net Worth of 4.08 times in FY20 as against 3.59 times in FY19.
The Liquidity of the company was stretched with current ratio of 0.80 times in FY19 and 0.91 times in FY20.
Going forward, the ability of the company to scale up its operations and to improve its profit margins and its gearing would be the key rating sensitivities.
Positive: The rating may be positively revised if there is further growth in revenue and profit margins while maintaining a healthy overall financial profile.
Negative: The rating may be adversely affected if there is deterioration in capital structure, profit margins and any delays in payment of its debt obligations.
LIQUIDITY INDICATORS - Stretched
The Company has been in stretched liquidity with current ratio of 0.80 times in FY19 and with current ratio of 0.91 times in FY20.
ABOUT THE ENTITYFLIC Microwaves Private Limited was incorporated in 1992 with registered office in Hyderabad, Telangana. Mr. Sukumar Pradhan, Mr. Prasanta Pradhan, Mrs. Sagarika Pradhan and Mrs. Nivedita Mohanty are the directors of the company. The company is engaged in design and develops, and manufactures customized sub-systems and components for microwave communication systems used in the Defence, Space, Telecommunication sectors and other measurement industries. The company has its manufacturing unit located located in Survey No. 75/2, Balapur Village, Balapur Mandal. Hyderabad. The Company's prime customers are Defence Research Development Organisation (DRDO), Bharat Electronics Ltd (BEL), Defence Electronics Research Laboratory (DERL) and Defence Avionics Research Establishment (DARE), etc.
KEY FINANCIAL INDICATORS (Standalone)Key Parameters | Units |
FY 19-20 (Audited) |
FY 18-19 (Audited) |
---|---|---|---|
Operating Revenue | Rs.Crs. | 8.19 | 9.41 |
EBITDA | Rs.Crs. | 2.76 | 1.94 |
PAT | Rs.Crs. | -0.31 | -0.22 |
Tangible Net Worth | Rs.Crs. | 3.69 | 4.09 |
Total Debt/Tangible Net Worth | Times | 4.08 | 3.59 |
Current Ratio | Times | 0.91 | 0.80 |
The terms of sanction include standard covenants normally stipulated for such facilities.
NIL
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 | 12.38 |
BWR D
(Downgrade) |
11Jun2020 |
BWR B-Stable
(Downgrade/ISSUER NOT COOPERATING*) |
NA |
NA
|
18Jan2018 |
BWR B+Stable
(Assignment) |
Non Fund Based | ST | 1.50 |
BWR D
(Downgrade) |
11Jun2020 |
BWR A4
(Reaffirmation/ISSUER NOT COOPERATING*) |
NA |
NA
|
18Jan2018 |
BWR A4
(Assignment) |
Grand Total | 13.88 | (Rupees Thirteen Crores and Eighty Eight 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.
Analytical Contacts | |
---|---|
Soubhagya Ranjan Kahalsingh Ratings Analyst Board : +91 80 4040 9940 soubhagya.rs@brickworkratings.com |
Nagaraj K Associate Director - Ratings Board : +91 80 4040 9940 nagaraj.ks@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 | Indian Bank | Term LoanSanctioned | 5.11 | _ | 5.11 |
2 | Indian Bank | Term LoanProposed | _ | _ | 0.00 |
3 | Indian Bank | Open Cash Credit / Cash Credit (Hypothecation/Pledge)Sanctioned | 3.90 | _ | 3.90 |
4 | Indian Bank | Bank GuaranteeSanctioned | _ | 1.50 | 1.50 |
5 | Indian Bank | Covid -19 Emergency Line CreditSanctioned | 0.35 | _ | 0.35 |
6 | Indian Bank | Funded Interest Term LoanSanctioned | 1.01 | _ | 1.01 |
7 | Indian Bank | GECLSanctioned | 2.01 | _ | 2.01 |
Total | 12.38 | 1.50 | 13.88 | ||
TOTAL (Rupees Thirteen Crores and Eighty Eight lakhs Only) |
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