Trbex Impex Pvt. Ltd.

Brickwork Ratings assigns the long term ratings and reaffirms the short term ratings for the Bank Loan Facilities of Rs. 35.00 Crs. of Trbex Impex Pvt. Ltd.

Particulars

Facilities**	Amount (Rs.Crs.)		Tenure	Rating#
	Previous	Present		Previous (17 Nov 2020)	Present
Fund Based	0.00	10.00	Long Term		BWR BBB - /Stable Assignment
	25.00	25.00	Short Term	BWR A3 Reaffirmation	BWR A3 Reaffirmation
Non Fund Based	(2.00)	(2.00)	Short Term	BWR A3 Reaffirmation	BWR A3 Reaffirmation
Grand Total	25.00	35.00	(Rupees Thirty Five Crores 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

BWR assigned the long term ratings of BWR BBB-/Stable ; Stable and reaffirmed the short term rating at BWR A3 for the bank loan facilities of Trbex Impex Pvt. Ltd.

The rating draws strength from the rich experience of the management of the company and healthy financial risk profile. The rating of the company is constrained by competition in the industry and exposure to change foreign government policy.

BWR believes that the business risk profile of “Trbex Impex Pvt. Ltd.” 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 there is significant improvement in revenues, and profit margins of the company. The rating outlook may be revised to “Negative” if there is any deterioration in the financial risk profile including liquidity of the company.

KEY RATING DRIVERS

Credit Strengths:

• Management Experience :

  TRBIPL is promoted by Mr. Rajesh Aggarwal, who has more than two decades of experience in diversified business activities.

• Healthy financial risk profile :

  The Operating Income has increased to Rs. 240.69 cr in FY20(Aud.) from Rs. 167.05 cr in FY19 by 44.08%.The operating income stood at Rs. 256.93 cr in FY21(Prov.). Further, the company has already achieved revenue and PAT of Rs.147.59 cr  and Rs. 12.40 cr respectively till Oct 30, 2021 (revenue achieved till Oct 30, 2021 constitutes .51.28 % of the total operating income projected for FY22) . The EBITDA has declined marginally at Rs. 26.06 cr during FY20 from Rs. 26.64 cr during FY19. The PAT has also declined marginally to Rs. 16.39 cr during FY20 from Rs. 16.58 cr during FY19. The operating margin has deteriorated to 10.83% during FY20 from 15.95 % during FY19. The net margin has decreased to 6.81% during FY20 from 9.93% during FY19. The tangible networth increased to Rs. 72.42 cr during FY20 from Rs. 55.06 cr during FY19 owing to profits earned during FY20.  The networth stood at Rs. 89.85 cr during FY21(Prov.). The analyzed tangible networth improved to Rs. 75.47 crs. in FY20 from Rs. 58.63 cr. in FY19. Further, analyzed the tangible networth of the company improved to Rs. 93.31 crs. in FY21 (Provisional).The Total Debt/TNW has deteriorated to 1.10x as on March31, 2020 (PY: 1.01x) owing to the increase unsecured debt during FY20. The current ratio though deteriorated, yet remained healthy at 1.62x during FY20 (PY: 1.74x). The ISCR deteriorated 5.19x as on March 31, 2020 (PY: 7.40x) owing to the increase in the interest cost. The DSCR stood at 3.04x as March 31, 2020 (PY: 3.59x).

Credit Risks:

• Competition in the industry :

  The sector has many small and unorganized player competing for market share. This results in predatory pricing which can have adverse impact on the margins. Since, the company is majorly into merchant export to countries like Latin America, Africa etc, the business of the company is exposed to the risk cause by the covid pandemic, or any change in the government policy of the countries where it exports its products. However, though competition is there, their sales have increased year on year basis and in FY22 and FY23, they have projected turnover of what they have achieved in FY21.

• Exposure to change in foreign government policies :

  Since, the company is majorly into merchant export to countries like Latin America, Africa etc, the business of the company is exposed to the risk cause by the any change in the foreign trade policy of India and the countries where it exports its products. Further, the company is also affected by the risk caused by the change in the demand affected by the covid pandemic. However, looking into the track record of the company, their sales have increased year on year basis and in FY22 and FY23, they have projected turnover of what they have achieved in FY21.

ANALYTICAL APPROACH - Standalone

For arriving at its ratings, BWR has considered the standalone performance of Trbex Impex Pvt. Ltd.(Though, the company is into a joint venture with Farmali SA formed in 2018,  a company is Mali, Africa, we have not considered consolidated approach of the financials as the production of the company has started in Calender year 2021 and since the reports will be made in the following years, the financials are not incorporated).

BWR has applied its rating methodology as detailed in the Rating Criteria (hyperlinks provided at the end of this rationale).

RATING SENSITIVITIES

Going forward, the ability of the firm to improve its financial risk profile and maintaining adequate liquidity will remain the key rating sensitivities.
Positive: The rating may be upgraded if the company interalia, is able to improve its topline, profit margin or on account of any other favourable factor.
Negative: The rating may be downgraded if inter alia, there is any deterioration in financial risk profile, fails to maintain adequate liquidity or on account of any unforeseen unfavourable events.

LIQUIDITY INDICATORS - Adequate

1. The company has associate companies named Jiwan Udyog, TRB Exports, Farmali SA. There is no significant sale/purchase with associate companies
2. The cash and bank balance stood at Rs. 0.02 cr as on March 31, 2020 (Aud.) and FD stood at Rs.52.37 cr. The cash and bank balance stood as on March 31, 2021 (Prov) stood at Rs. 0.58 cr and the company has FD of Rs. 5.10 cr as on March 31, 2021 (Prov.).
3. The long term borrowings as on March 31, 2021 (Prov) stood at Rs. 15.17 cr includes unsecured loans of Rs. 6.92 cr, GECL of Rs. 6.96 cr and car loan of Rs. 1.27 cr. The current portion of term debt stood at Rs. 1.57 cr. as on March 31, 2021. The company has cash accruals of Rs. 16.11 cr as on March 31, 2021. Further, the long term borrowings as on March 31, 2022 is projected at Rs. 14.36 cr includes term loans of Rs. 7.44 cr and unsecured loan of Rs. 6.92 cr. The current portion of long term debt as on March 31, 2022 is projected at Rs. 3.38 cr and the expected cash accruals during FY22 is projected at Rs. 24.29 cr. 
4. The PCFC limits are utilized approx 82% during the 6 month period ending Nov 2021.
5. The current ratio stood at 1.78x as on March 31, 2021 (Prov).
6. ISCR has stood at 8.06x as on March 31, 2021 and the DSCR has stood at 1.74x as on March 31, 2021 (Prov).
7. The conversion cycle stood at 81 days as on as on March 31, 2021 (Prov).

ABOUT THE ENTITY

Trbex Impex Pvt Ltd was incorporated in 2007 by Mr. Rajesh Kumar Aggrawal. Currently, Mr. Rajesh Aggrawal, Mr Shyna Aggrawal, , Mr. Charukh Goyal & Mr. Divyansh Aggrawal are the directors, each having over a decade experience in the line of business. The company is involved into the business of fabricating and merchant export of stainless steel, TMT bars, roofing sheets, structure materials, building construction materials, food products, electronic products & other FMCG products at Ludhiana. The products are exported mostly in West Africa and Latin America. The company had diversified revenue also from solar power plants of 1 MW & 3 MW in Madhya Pradesh region. Recently, it has started manufacturing of gardening equipment like baskets etc with own sources in FY21. The company has formed a joint venture in 2018 with a company named Farmali SA in Africa for manufacturing of TMT Bars in Africa. The sales/purchases are both made in Africa itself. Trbex Impex has 50% shareholding in this joint venture. The production has started in the calender year 2021 in the joint venture hence, the financials for the 1st year are not available at this point of time. 

KEY FINANCIAL INDICATORS (Standalone)

Key Parameters	Units	FY 20-21 (Provisional)	FY 19-20 (Audited)
Operating Revenue	Rs.Crs.	256.93	240.69
EBITDA	Rs.Crs.	27.75	26.06
PAT	Rs.Crs.	17.96	16.39
Tangible Net Worth	Rs.Crs.	89.85	72.42
Total Debt/Tangible Net Worth	Times	0.65	1.10
Current Ratio	Times	1.78	1.62

NON-COOPERATION WITH PREVIOUS CREDIT RATING AGENCY

NA

RATING HISTORY FOR THE PREVIOUS THREE YEARS (including withdrawal and suspended)

Facilities	Current Rating (2022)			2021		2020		2019
Type	Tenure	Amount (Rs.Crs.)	Rating	Date	Rating	Date	Rating	Date	Rating
Fund Based	LT	10.00	BWR BBB-/Stable (Assignment)	NA	NA	NA	NA	14Aug2019	BWR BBB- Stable (Reaffirmation)
Fund Based	ST	25.00	BWR A3 (Reaffirmation)	NA	NA	17Nov2020	BWR A3 (Reaffirmation)	14Aug2019	BWR A3 (Reaffirmation)
NFB SubLimit	ST	(2.00)	BWR A3 (Reaffirmation)	NA	NA	17Nov2020	BWR A3 (Reaffirmation)	14Aug2019	BWR A3 (Reaffirmation)
Grand Total		35.00	(Rupees Thirty Five Crores Only)

COMPLEXITY LEVELS OF THE INSTRUMENTS - NA

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

• General Criteria
• Approach to Financial Ratios
• Manufacturing Companies
• Trading Entities

Analytical Contacts
Vaishali Khandelwal Ratings Analyst vaishali.k@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	Packing Credit (PC)	_	25.00	25.00
	Sub-Limit (ILC/FLC/ BG )		(2.00)
2	Punjab National Bank	GECL	10.00	_	10.00
Total			10.00	25.00	35.00
TOTAL (Rupees Thirty Five Crores Only)