Landmark Sizing

Brickwork Ratings revises and migrates the ratings from Issuer not cooperating category for the Bank Loan Facilities of Rs. 18.35 Crs. of Landmark Sizing

Particulars

Facilities**	Amount (Rs.Crs.)		Tenure	Rating#
Facilities**	Previous	Present	Tenure	Previous (20 Aug 2021)	Present
Fund Based	18.68	17.49	Long Term	BWR B/Stable Downgrade/ISSUER NOT COOPERATING*	BWR B + /Stable Upgrade
Non Fund Based	1.66	0.86	Short Term	BWR A4 Reaffirmation/ISSUER NOT COOPERATING*	BWR A4 Reaffirmation
Grand Total	20.34	18.35	(Rupees Eighteen Crores and Thirty Five 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
*** 1. The forward contract for Rs 1.00 Crs sanctioned in 2020 is not included in the present rating. 2. The import LC of Rs 0.80 Crs was an one time LC in respect of import which had been considered under the term loan was availed.

RATING ACTION / OUTLOOK

BWR has essentially relied upon the audited financial statements of Landmark Sizing of FY18, FY19, FY20, provisional financial statements of FY21 and projected financials forFY22 and FY 23 publicly available information and information / clarifications provided by the entity’s management. BWR believes that Landmark Sizing 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. The rating outlook may be revised to 'Negative' if the revenues go down and profit margins show lower than expected figures.

KEY RATING DRIVERS

Credit Strengths:

Locational Advantage :
The firm is located in Coimbatore cluster and thus has a competitive advantage in terms of skilled labor, logistics, production knowledge and vendors making the company more efficient and cost effective.
Experienced management :
The partners have over a decade of experience in the cotton industry. The firm benefits from the directors understanding of the dynamics of the industry and established relationships with customers.

Credit Risks:

Constitution(For Proprietorships and Partnership cases) :
Withdrawal of capital by the Partners for any personal contingency would adversely affect the capital structure of the firm.
Financial risk :
The gearing ratio has deteriorated to 4.88x in FY 20 from 2.01x in FY 19. The DSCR and ISCR are at 0.83x and 1.22x in FY 20. The conversion cycle has also deteriorated to 209 days in FY 21(P) from 158 days in FY 20.
Covid Pandemic impact :
The revenue has reduced significantly by 29.63% from Rs 74.98 Crs in FY 20 to Rs 52.76 Crs in FY 21(P) mainly on account of covid 19 pandemic. The firm's production capacity was adversely impacted by the pandemic.

ANALYTICAL APPROACH - Standalone

For arriving at its ratings, Brickwork Ratings (BWR) has considered the audited financials of FY19, FY20, provisional FY21, and projected financials of FY22 and FY23 and information/clarifications provided by the firm’s management. BWR has applied its rating methodology as described in the Rating Criteria detailed below (hyperlinks provided at the end of this rationale).

RATING SENSITIVITIES

Going forward, the ability of the firm to further increase its scale of operations by improving its revenue, profitability margins and financial risk profile, maintaining its debt obligations and efficiently managing its working capital will be the key rating sensitivities.

Positive: The ratings may be upgraded if revenue, profitability, liquidity, gearing and overall credit profile show substantial improvement.

Negative: The rating may be downgraded in case there is a significant deterioration in business and financial risk profile of the firm from its current level.

LIQUIDITY INDICATORS - Stretched

The gearing ratio has deteriorated to 4.88x in FY 20 from 2.01x in FY 19 mainly due to the decrease in capital and increase in the long term borrowings. The DSCR and ISCR are at 0.83x and 1.22x in FY 20. It has further deteriorated to 0.77x and 1.17x in FY 21(P). The conversion cycle has also deteriorated to 209 days in FY 21(P) from 158 days in FY 20. The net margin has reduced to 0.31x in FY 20 due to increase in the interest component of the long term borrowings.

ABOUT THE ENTITY

Landmark Sizing (LMS) is a partnership firm, established in the year 2005 at Karumathampatti, Coimbatore Dist, Tamil Nadu.by two brothers, viz Mr. S Aruchamy and Mr.Sethuramasamy. The firm and factory are located in Karumathampatti, Coimbatore District.The core activity of the firm comprises the sizing of yarns and manufacturing of auto-loom clothes and hosiery.

KEY FINANCIAL INDICATORS (Standalone)

Key Parameters	Units	FY 20-21 (Provisional)	FY 19-20 (Audited)
Operating Revenue	Rs.Crs.	52.76	74.98
EBITDA	Rs.Crs.	2.92	2.98
PAT	Rs.Crs.	0.10	0.23
Tangible Net Worth	Rs.Crs.	9.22	9.12
Total Debt/Tangible Net Worth	Times	2.83	2.91
Current Ratio	Times	1.53	1.34

KEY COVENANTS OF THE FACILITY RATED

STATUS OF NON-COOPERATION WITH PREVIOUS CRA

Rated CARE B+; Stable; ISSUER NOT COOPERATING* and CARE A4; ISSUER NOT COOPERATING* for an amount of 19.56, as on March 26, 2021.

ANY OTHER INFORMATION

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	17.49	BWR B+/Stable (Upgrade)	20Aug2021	BWR BStable (Downgrade/ISSUER NOT COOPERATING*)	04Feb2020	BWR B+Stable (Downgrade/ISSUER NOT COOPERATING*)	NA	NA
Non Fund Based	ST	0.86	BWR A4 (Reaffirmation)	20Aug2021	BWR A4 (Reaffirmation/ISSUER NOT COOPERATING*)	04Feb2020	BWR A4 (Reaffirmation/ISSUER NOT COOPERATING*)	NA	NA
Grand Total		18.35	(Rupees Eighteen Crores and Thirty Five lakhs Only)

*** 1. The forward contract for Rs 1.00 Crs sanctioned in 2020 is not included in the present rating. 2. The import LC of Rs 0.80 Crs was an one time LC in respect of import which had been considered under the term loan was availed. 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
Varsha Jasmin Ratings Analyst varsha.j@brickworkratings.com	Varadarajan R Associate Director - Ratings Board : +91 044 24663326 varadarajan.r@brickworkratings.com
1-860-425-2742 \| media@brickworkratings.com

Landmark Sizing

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	Union Bank of India	Term Loan	0.49	_	0.49
2	Union Bank of India	Cash Credit	17.00	_	17.00
3	Union Bank of India	Bank Guarantee	_	0.01	0.01
4	Union Bank of India	Inland Letter of Credit (ILC)	_	0.85	0.85
5	Union Bank of India	Letter of Credit (Inland/Import) / Buyers Credit	_	_	0.00
Total			17.49	0.86	18.35
TOTAL (Rupees Eighteen Crores and Thirty Five lakhs Only)

* 1. The forward contract for Rs 1.00 Crs sanctioned in 2020 is not included in the present rating. 2. The import LC of Rs 0.80 Crs was an one time LC in respect of import which had been considered under the term loan was availed.

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