Brickwork Ratings reaffirms the ratings for the Bank Loan Facilities of Rs. 14.00 Crs. of Canpex Chemicals Pvt. Ltd.
ParticularsFacilities** | Amount (Rs.Crs.) | Tenure | Rating# | ||
---|---|---|---|---|---|
Previous | Present | Previous (23 Oct 2020) |
Present | ||
Fund Based | 1.00 | 1.00 | Long Term |
BWR BBB- /Stable
Upgrade |
BWR BBB -
/Stable Reaffirmation |
Non Fund Based | 13.00 | 13.00 | Short Term |
BWR A3
Upgrade |
BWR A3
Reaffirmation |
Grand Total | 14.00 | 14.00 | (Rupees Fourteen Crores Only) |
Brickwork Ratings reaffirms the rating to BWR BBB- (Stable)/BWR A3 for the bank loan facilities amounting to Rs. 14.00 Crs. of Canpex Chemicals Pvt Ltd. BWR believes that Canpex Chemicals Pvt Ltd business risk profile 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 the revenues and profit show sustained improvement backed by a favorable industry scenario. The rating outlook may be revised to 'Negative' if the revenues and profit margins show lower than expected figures.
BWR has essentially relied upon the audited financial statements of Canpex Chemicals Pvt Ltd for FY19, FY20 and FY21, and projections for FY22 and FY23, and information/clarifications provided by the entity’s management. The rating draws strength from the experienced management and established market position, moderate scale of operations, and moderate financial risk profile. The rating is however constrained by margins susceptible to changes in the government policies and volatility in the raw material prices and foreign exchange risk.
Going forward the ability of the company to maintain its overall financial risk profile would be its key rating sensitivity
KEY RATING DRIVERSCredit Strengths:
The Directors of the company are Mr. Subhash B Mutha, Mr. Prashant S Mutha & Mr. Vikas V Hole. Mr. Subhash Mutha has a vast experience of over 46 years in this line of business and his well versed with formalities of import export as well as the trade trends. His son Mr. Prashant S Mutha a Chemical Engineer assist the company in all administrative and financial matters.
Besides Mr. Mutha the Company is having a professional set up with experienced person in technical as well as finance, accounts, administration and marketing.
The Company’s Capital Structure is continuously improving as gearing is low at 0 in FY21 on account of low dependence on external debt and net worth of Rs 42.60 Crs. Considering non fund based limits the adjusted Gearing for FY21 is 0.31x.Profitability in FY21 has improved compared to FY20 as reported through OPM of 35.32% and NPM of 27.30%. Coverage ratios with DSCR and ISCR are adequate at 41.14x and 62.94x in FY21 .Liquidity as reflected through current ratio is reported at 6.46x.
OPM is adequate at 35.32 in FY 21 & has shown a substantial increase . Though the same is projected to be at a lower level in FY22 , but still the same is at an adequate level. Similarly, NPM has shown substantial improvement to 27.30 in FY21 VS FY20. Though the same is projected at a lower level in FY22, the same is also at an adequate level.
The Total operating income decreased marginally to Rs 42.11 Cr in FY21 Vs Rs 44.15 Cr in FY20. Company has achieved sales Rs 44.49.12 Cr till Dec 2021.Company has projected sales of Rs. 66.68 Cr sales in the FY22. The same appears achievable in view of the trend indicated by YTD sales in FY22. The client is expecting further increase in sales to the tune of approx 20% in FY23 VS FY22.
As majority of the raw materials are imported from Japan and China, CCPL is exposed to forex fluctuations. Forward contract booking is 20% from the client
The chemical industry is a cyclical industry and is driven largely by the business cycles of end customer segments. However, the effect of cyclicity is compounded by imbalances in demand and supply that arise due to inappropriate timing of capacity additions.
KEY FINANCIAL INDICATORS (Standalone)
Key Parameters | Units |
FY 20-21 (Audited) |
FY 19-20 (Audited) |
---|---|---|---|
Operating Revenue | Rs.Crs. | 42.11 | 44.15 |
EBITDA | Rs.Crs. | 14.87 | 11.57 |
PAT | Rs.Crs. | 11.50 | 7.74 |
Tangible Net Worth | Rs.Crs. | 42.60 | 30.90 |
Total Debt/Tangible Net Worth | Times | Not Available | 0.01 |
Current Ratio | Times | 6.46 | 3.97 |
Facilities | Current Rating (2022) | 2021 | 2020 | 2019 | |||||
---|---|---|---|---|---|---|---|---|---|
Type | Tenure | Amount (Rs.Crs.) |
Rating | Date | Rating | Date | Rating | Date | Rating |
Fund Based | LT | 1.00 |
BWR BBB-/Stable
(Reaffirmation) |
NA |
NA
|
23Oct2020 |
BWR BBB- Stable
(Upgrade) |
19Aug2019 |
BWR BB+ Stable
(Initial Rating) |
Non Fund Based | ST | 13.00 |
BWR A3
(Reaffirmation) |
NA |
NA
|
23Oct2020 |
BWR A3
(Upgrade) |
19Aug2019 |
BWR A4
(Initial Rating) |
Grand Total | 14.00 | (Rupees Fourteen Crores 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 | |
---|---|
Rujuta Sadanand Zajam Ratings Analyst rujuta.sz@brickworkratings.com |
Sushil Kumar Chitkara Director - Ratings Board : +91 22 2831 1426, +91 22 2831 1439 sushilkumar.c@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 | 1.00 | _ | 1.00 |
2 | Union Bank of India | Bank GuaranteeSanctioned | _ | 1.00 | 1.00 |
3 | Union Bank of India | Letter of CreditSanctioned | _ | 12.00 | 12.00 |
Total | 1.00 | 13.00 | 14.00 | ||
TOTAL (Rupees Fourteen Crores Only) |
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 RatingsBrickwork 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.