Amrit Exports Pvt Ltd

Brickwork Ratings reaffirms the ratings for the aggregate Bank Loan Facilities of Amrit Exports Pvt. Ltd. for a reduced amount of Rs. 41.99 Crs.

Particulars

Facilities**	Amount (Rs.Crs.)		Tenure	Rating#
Facilities**	Previous	Present	Tenure	Previous (31 Jul 2020)	Present
Fund Based	5.81	3.99	Long Term	BWR BB/Stable Reaffirmation and change in Outlook	BWR BB /Stable Reaffirmation
	39.25	34.25	Short Term	BWR A4 Reaffirmation	BWR A4 Reaffirmation
	(21.75)	(21.75)	Short Term	BWR A4 Reaffirmation	BWR A4 Reaffirmation
Non Fund Based	3.75	3.75	Short Term	BWR A4 Reaffirmation	BWR A4 Reaffirmation
Grand Total	48.81	41.99	(Rupees Forty One Crores and Ninety Nine 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 relied upon the Audited financials of the company for FY 19, FY 20 and Provisional financials of FY 21 along with its projected financials for FY 22 and FY 23, information available in public domain, as well as feedback from the company and its bankers for arriving at the present rating.

Based on a review, Brickwork Ratings has reaffirmed the rating of the long term bank loan facilities of Amrit Exports Pvt Ltd. for Rs.38.24 Crs (reduced from Rs.45.06 Crs) at BWR BB/Stable and the rating of their short term bank loan facilities for Rs.3.75 Crs at BWR A4 (aggregate rated amount reduced from Rs.48.81 Crs to Rs.41.99 Crs). The rating reaffirmation factors experienced management, long track record of operations, strong clientele and comfortable financial risk profile of the company as well as its adequate liquidity. The rating is, however, constrained by the decline in revenue, working capital intensive nature of business and elongated conversion cycle, moderately high customer and supplier concentration, as well as risks related to raw material sourcing, and forex risk.

The 'Stable' outlook indicates a low likelihood of rating change over the medium term. BWR believes that the business risk profile of Amrit Exports Pvt. Ltd. will be maintained over this period. 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 the revenues go down and profit margins show lower than expected figures on a continuous basis.

KEY RATING DRIVERS

Credit Strengths:

Experienced Management :
AEPL is managed by its three Directors namely, Mr. Anil Buchasia, Mr. Sohm Buchasia and Mr. Shivam Buchasia who are professionally qualified and have close to three decades of experience in the textile industry - both in the domestic and in the international markets.
Long track records of Operations :
Amrit Exports Private Ltd. (AEPL) was established in 1996 at Madhyamgram, West Bengal which indicates their long presence in this industry and their long track record of successful operations.
Strong Clientele :
AEPL has been exporting its products to different European countries, including to Government Departments like Swiss Military (i.e. Swiss military (AMZ) is department of civil and military defense, Switzerland). The company has been executing orders for these clients for close to 5 years. Recently it has made significant inroads into the US market also, and has also bagged orders from other Government Departments of Switzerland.
Comfortable Financial risk profile :
The financial profile of the company is marked by moderate scale of operations, comfortable profitability, healthy networth, moderate leverage and debt coverage indicators. The company’s revenues stood at Rs.35.55 Crs in FY21 (Provisional) compared to Rs.38.71 Crs in FY 20. The networth of the company stood healthy at Rs.23.60 Crs in FY 21 (Provisional) compared to Rs.22.88 Crs in FY 20. The EBITDA has remained comfortable at Rs.4.77 Crs in FY 21 (Provisional) compared to Rs.0.57 Crs in FY 20. The debt to equity ratio stood moderate at 1.48 times as on 31st March, 2021 compared to 1.62 times as on 31st March, 2020. The interest coverage ratio (ISCR) and debt service coverage ratio (DSCR) of the company are moderate at 1.88 times and 1.49 times respectively in FY21 (Provisional).

Credit Risks:

Decline in revenue :
AEPL’s scale of operations continued to be modest - as reflected by its total operating income of Rs.38.71 Crs in FY20, which decreased by 31% in FY 20 from Rs.55.97 Crs in FY 19.Further the same has also decreased by 8% to Rs. 35.55 Crs during FY21(Provisional) from Rs.38.71 Crs in FY20. Decrease in total operating income was on account of disruption in shipment during 2020 and 2021 due to worldwide pandemic and nationwide lockdown, for which a substantial portion of orders could not be shipped and realised. However, currently the situation has improved and as on date, the company has an order book of Rs.50 Crs which includes export orders, and it is to be executed by August 2022.
Working capital intensive business and elongated Conversion Cycle :
The operations of the company are working capital intensive as they have to maintain high debtors and a high level of inventory due to which the inventory holding period was at 354 days in FY21 Provisional and cash conversion cycle of 465 days.
High customer and supplier concentration :
The customers and suppliers concentration of the company is moderately high as top five customers contributed more than 50 percent of the total revenue and top five suppliers contributed 60% of the total purchases during FY21 (Provisional). Hence, any change in Government policy affecting its customers or suppliers, any dip in demand from its customers, or any disruption in procurement, may affect the sales and sourcing process of the company.
Raw material sourcing and forex risk :
AEPL sources a large part of its raw materials from abroad. The inability of the Company to access alternative sources of raw material in case of any policy changes in the international market may adversely impact the company’s business cycle. The company's profitability margins are also susceptible to foreign exchange rate fluctuations, as the entire forex transactions are not hedged.

ANALYTICAL APPROACH - Standalone

Standalone: For arriving at its ratings, BWR has applied its rating methodology as detailed in the Rating Criteria detailed below (hyperlinks provided at the end of this rationale).

RATING SENSITIVITIES

Positive

Increase in scale of operations and profits, Improvement in EBITDA margin and Net profit Margin on a consistent basis
Increase its Net Worth, improvement in the operating efficiency of the company.

Negative

Decline in Revenue and deterioration of the financial position of the company, including deterioration in coverage ratios, liquidity, leverage and TNW on a continuous basis.
Delay in payments of its debt obligations

LIQUIDITY INDICATORS - Adequate

The liquidity of the company stands adequate as reflected by the comfortable cash credit utilisation ~at 54% for the last six months ended November 2021. The Company has comfortable EBITDA which stood at Rs.4.70 Crs in FY 21 (provisional). Liquidity is further supported by a comfortable ISCR & DSCR of 1.88 times and 1.49 times respectively in FY 2021 (Provisional). The current ratio stood comfortable at 1.65 times in FY 21 (provisional) (FY20:1.31 times) while cash and Bank Balances stood comfortable at Rs.0.50 Crs in FY 21 (Provisional). The Net Cash accruals were Rs.1.66 against repayment obligations of Rs.0.78 Crs.

ABOUT THE ENTITY

Amrit Exports Pvt Ltd (AEPL), is a flagship company of the Amrit Group which was incorporated in 1996. It is into manufacturing and export of industrial garments and safety wear. The manufacturing facility is located at Madhyamgram, Near Kolkata Airport and the Corporate office is located in Salt Lake, Kolkata. AEPL is managed by three Directors namely, Mr. Sohm Buchasia, Mr. Shivam Buchasia & Mr. Anil Buchasia.

KEY FINANCIAL INDICATORS (Standalone)

Key Parameters	Units	FY 19-20 (Audited)	FY 18-19 (Audited)
Operating Revenue	Rs.Crs.	38.71	55.97
EBITDA	Rs.Crs.	0.57	4.93
PAT	Rs.Crs.	0.34	0.54
Tangible Net Worth	Rs.Crs.	22.88	19.87
Total Debt/Tangible Net Worth	Times	1.62	1.78
Current Ratio	Times	1.31	1.30

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	3.99	BWR BB/Stable (Reaffirmation)	31Jul2020	BWR BBStable (Reaffirmation and change in Outlook)	11Jul2019	BWR BBPositive (Reaffirmation and change in Outlook)	12Jul2018	BWR BBStable (Assignment)
Fund Based	ST	34.25	BWR A4 (Reaffirmation)	31Jul2020	BWR A4 (Reaffirmation)	11Jul2019	BWR A4 (Reaffirmation)	12Jul2018	BWR A4 (Assignment)
FB SubLimit	ST	(21.75)	BWR A4 (Reaffirmation)	NA	NA	NA	NA	NA	NA
Non Fund Based	ST	3.75	BWR A4 (Reaffirmation)	31Jul2020	BWR A4 (Reaffirmation)	11Jul2019	BWR A4 (Reaffirmation)	12Jul2018	BWR A4 (Assignment)
Grand Total		41.99	(Rupees Forty One Crores and Ninety Nine lakhs Only)

Rating Advisory, as on 03Aug2021
Press Release, as on 03Aug2021
Issuance of Advisory due to delay in Rating review.

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.

Analytical Contacts
Saroj Kumar Das Ratings Analyst sarojkumar.d@brickworkratings.com	Anuradha Gupta Director - Ratings anuradha.g@brickworkratings.com
1-860-425-2742 \| media@brickworkratings.com

Amrit Exports 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	Indian Bank	Term Loan - Sanctioned	3.99	_	3.99
2	Indian Bank	Over Draft - Sanctioned	_	1.50	1.50
3	Indian Bank	Packing Credit (PC) - Sanctioned	_	21.75	21.75
	Sub-Limit (PCFC) - Sanctioned		(21.75)
4	Indian Bank	Foreign Bill Purchase - Sanctioned	_	11.00	11.00
5	Indian Bank	Bank Guarantee - Sanctioned	_	0.75	0.75
6	Indian Bank	Letter of Credit - Sanctioned	_	3.00	3.00
Total			3.99	38.00	41.99
TOTAL (Rupees Forty One Crores and Ninety Nine lakhs Only)

Print and Digital Media

The Rating Rationale is sent to you for the sole purpose of dissemination through your print, digital or electronic media. While it may be used by you acknowledging credit to BWR, please do not change the wordings in the rationale to avoid conveying a meaning different from what was intended by BWR. BWR alone has the sole right of sharing (both direct and indirect) its rationales for consideration or otherwise through any print or electronic or digital media.

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.

Disclaimer

Brickwork Ratings India Pvt. Ltd. (BWR), a Securities and Exchange Board of India [SEBI] registered Credit Rating Agency and accredited by the Reserve Bank of India [RBI], offers credit ratings of Bank Loan facilities, 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. [ hereafter referred to as "Instruments"]. BWR also rates NGOs, Educational Institutions, Hospitals, Real Estate Developers, Urban Local Bodies and Municipal Corporations.

BWR wishes to inform all persons who may come across Rating Rationales and Rating Reports provided by BWR that the ratings assigned by BWR are based on information obtained from the issuer of the instrument and other reliable sources, which in BWR's best judgment are considered reliable. The Rating Rationale / Rating Report & other rating communications are intended for the jurisdiction of India only. The reports should not be the sole or primary basis for any investment decision within the meaning of any law or regulation (including the laws and regulations applicable in Europe and also the USA).

BWR also wishes to inform that access or use of the said documents does not create a client relationship between the user and BWR.

The ratings assigned by BWR are only an expression of BWR's opinion on the entity / instrument and should not in any manner be construed as being a recommendation to either, purchase, hold or sell the instrument.

BWR also wishes to abundantly clarify that these ratings are not to be considered as an investment advice in any jurisdiction nor are they to be used as a basis for or as an alternative to independent financial advice and judgment obtained from the user's financial advisors. BWR shall not be liable to any losses incurred by the users of these Rating Rationales, Rating Reports or its contents. BWR reserves the right to vary, modify, suspend or withdraw the ratings at any time without assigning reasons for the same.

BWR's ratings reflect BWR's opinion on the day the ratings are published and are not reflective of factual circumstances that may have arisen on a later date. BWR is not obliged to update its opinion based on any public notification, in any form or format although BWR may disseminate its opinion and analysis when deemed fit.

Neither BWR nor its affiliates, third party providers, as well as the directors, officers, shareholders, employees or agents (collectively, "BWR Party") guarantee the accuracy, completeness or adequacy of the Ratings, and no BWR Party shall have any liability for any errors, omissions, or interruptions therein, regardless of the cause, or for the results obtained from the use of any part of the Rating Rationales or Rating Reports. Each BWR Party disclaims all express or implied warranties, including, but not limited to, any warranties of merchantability, suitability or fitness for a particular purpose or use. In no event shall any BWR Party be liable to any one for any direct, indirect, incidental, exemplary, compensatory, punitive, special or consequential damages, costs, expenses, legal fees, or losses (including, without limitation, lost income or lost profits and opportunity costs) in connection with any use of any part of the Rating Rationales and/or Rating Reports even if advised of the possibility of such damages. However, BWR or its associates may have other commercial transactions with the company/entity. BWR and its affiliates do not act as a fiduciary.

BWR keeps certain activities of its business units separate from each other in order to preserve the independence and objectivity of the respective activity. As a result, certain business units of BWR may have information that is not available to other BWR business units. BWR has established policies and procedures to maintain the confidentiality of certain non-public information received in connection with each analytical process.

BWR clarifies that it may have been paid a fee by the issuers or underwriters of the instruments, facilities, securities etc., or from obligors. BWR's public ratings and analysis are made available on its web site, www.brickworkratings.com. More detailed information may be provided for a fee. BWR's rating criteria are also generally made available without charge on BWR's website.

This disclaimer forms an integral part of the Ratings Rationales / Rating Reports or other press releases, advisories, communications issued by BWR and circulation of the ratings without this disclaimer is prohibited.

BWR is bound by the Code of Conduct for Credit Rating Agencies issued by the Securities and Exchange Board of India and is governed by the applicable regulations issued by the Securities and Exchange Board of India as amended from time to time.