RATING RATIONALE
28Dec2021

Xpro India Ltd

Brickwork Ratings upgrades the ratings for the Bank Loan Facilities of Rs. 185.74 Crs. of Xpro India Ltd., and also revises the Outlook; from BWR BBB- (Stable)/A3 to BWR BBB (Positive)/A2

Particulars
Facilities** Amount (Rs.Crs.) Tenure Rating#
Previous Present Previous
(15 Mar 2021)
Present
Fund Based 178.34 148.74 Long Term BWR BBB- /Stable
Reaffirmation
BWR BBB /Positive
Upgrade
Non Fund Based 37.00 37.00 Short Term BWR A3
Reaffirmation
BWR A2
Upgrade
Grand Total 215.34 185.74 (Rupees One Hundred Eighty Five Crores and Seventy Four 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 (BWR) upgrades the ratings of Xpro India Limited (XIL), factoring in increasing scale of operations and improved profitability margins in FY21 and H1FY22 (UA), coupled with improvement in the solvency position and debt protection metrics during the same period. The ratings continue to derive strength from the adequate liquidity profile, established market presence of the company as a major producer and supplier of co-extruded sheets, refrigerator liners for the white goods industry and dielectric films in India, and adequate track record of its promoters to provide need-based financial support. The ratings are, however, constrained by the susceptibility of margins to any adverse movements in the foreign exchange and commodity prices.

RATING OUTLOOK: Positive

The change in outlook from 'Stable' to 'Positive' reflects that the company is expected to show healthy profitability in the medium term, which, coupled with the repayment of the term debt liability is expected to lead to improved solvency position going forward.

KEY RATING DRIVERS

Credit Strengths:


Credit Risks:

ANALYTICAL APPROACH - Standalone

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

RATING SENSITIVITIES

Positive: The company’s ability to maintain growth in its turnover levels, improve its profitability margins and subsequently, show an improvement in its solvency position going forward, will be positive for the ratings.
Negative: Significant decline in its turnover and profitability margins and a lower-than-expected coverage ratios and debt protection metrics besides reporting lower current ratio could impact its credit metrics over the medium term. Any debt availment, which might lead to significant deterioration in the overall solvency profile will also be a negative for the ratings.

LIQUIDITY INDICATORS - Adequate

For FY21 and H1FY22 (UA), the company reported cash flow from operations amounting to Rs.47.90 cr. and Rs.21.64 cr., respectively. Further, in H1FY22 (UA), the company reported internal cash accruals of Rs. 21.96 cr., vis-a-vis debt repayment obligation of Rs.24.16 Cr. in FY22. The company was also able to dispose-off its unviable unit (Borjara Unit 1) from which it has already received Rs.3.50 Cr. (compared to total payment of Rs. 6.78 cr. expected to be received in CY22.. On the back of healthy cash accrual generation, the company has also made some pre-payments for its term debt obligations in FY21 and FY22 (so far). The operating cycle of the company also remained comfortable at 20 days, as on March 31, 2021, while the bank limit utilizations also remained in a comfortable range of 60-70%, on an average. The current ratio, however, stood at a moderate level of 1.02x, as on March 31, 2021. Going forward, the company plans to double its existing capacity for di-electric films. The total capex implementation is likely to take 2-4 years and will require significant investment. As of now, the company is exploring its capital mix options. BWR will keep a close watch on the capex plans of the company, which, along with the funding-mix, will remain a key rating sensitivity going forward.

ABOUT THE ENTITY

Xpro India Ltd is listed on both BSE and NSE and is engaged in the manufacturing of BOPP films, Dielectric capacitor films, cast films, coextruded plastic sheets, refrigerator sheets, liners and cabinets. Presently, XIL runs three manufacturing facilities located at Barjora (West Bengal), Greater Noida (UP) & Ranjangaon (Maharashtra). The manufacturing facilities operate under two division viz. Biax Division (Di-electric films) and Coex Division (Coextruded films). The company is a part of the Sidharth Birla Group (the Birla family owns 50.02 percent share in the Company). The total installed capacity of Biax Division and Coex Division is 4000MT and 30300MT, respectively.

KEY FINANCIAL INDICATORS (Standalone)
Key Parameters Units FY 20-21
(Audited)
FY 19-20
(Audited)
Operating Revenue Rs.Crs. 373.35 354.84
EBITDA Rs.Crs. 41.11 30.86
PAT Rs.Crs. 7.91 1.21
Tangible Net Worth Rs.Crs. 89.88 82.37
Total Debt/Tangible Net Worth Times 1.23 2.04
Current Ratio Times 1.02 0.98

RATING HISTORY FOR THE PREVIOUS THREE YEARS (including withdrawal and suspended)
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 148.74
BWR BBB/Positive
(Upgrade)
15Mar2021
BWR BBB- Stable
(Reaffirmation)
04Dec2020
BWR BBB- Credit Watch with Developing Implications
(Reaffirmation and change in Outlook)
NA
NA
10Dec2018
BWR BBB- Stable
(Upgrade)
NA
NA
NA
NA
22Jan2020
BWR BBB- Stable
(Reaffirmation)
NA
NA
NA
NA
Non Fund Based ST 37.00
BWR A2
(Upgrade)
15Mar2021
BWR A3
(Reaffirmation)
04Dec2020
BWR A3
(Reaffirmation)
NA
NA
10Dec2018
BWR A3
(Upgrade)
NA
NA
NA
NA
22Jan2020
BWR A3
(Reaffirmation)
NA
NA
NA
NA
Grand Total 185.74 (Rupees One Hundred Eighty Five Crores and Seventy Four 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

Kanwalpreet Singh

Ratings Analyst kanwalpreet.s@brickworkratings.com

Sudeep Sanwal

Associate Director - Ratings sudeep.s@brickworkratings.com
1-860-425-2742 | media@brickworkratings.com
Xpro India 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 LoanSanctioned 8.15 _ 8.15
2 Indian Bank Corporate LoanSanctioned _ _ 0.00
3 Indian Bank Cash CreditSanctioned 8.37 _ 8.37
4 Indian Bank GECLSanctioned 4.30 _ 4.30
5 Indian Bank ILC/FLCSanctioned _ 9.00 9.00
6 OLB Bank External Commercial BorrowingsSanctioned 24.83 _ 24.83
7 Punjab National Bank Cash CreditSanctioned 6.71 _ 6.71
8 Punjab National Bank Term LoanSanctioned 5.23 _ 5.23
9 Punjab National Bank Term LoanSanctioned 2.90 _ 2.90
10 Punjab National Bank ILC/FLCSanctioned _ 6.00 6.00
11 Punjab National Bank GECLSanctioned 2.30 _ 2.30
12 State Bank Of India (SBI) ILC/FLCSanctioned _ 21.00 21.00
13 State Bank Of India (SBI) Term LoanSanctioned 45.98 _ 45.98
14 State Bank Of India (SBI) Cash CreditSanctioned 23.97 _ 23.97
15 State Bank Of India (SBI) Bank GuaranteeSanctioned _ 1.00 1.00
16 State Bank Of India (SBI) GECLSanctioned 16.00 _ 16.00
Total 148.74 37.00 185.74
TOTAL (Rupees One Hundred Eighty Five Crores and Seventy Four lakhs Only)
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