RATING RATIONALE
18May2022

Khyber Industries Pvt. Ltd.

Brickwork Ratings removes the ratings from issuer not cooperating classification and upgrades the ratings, with a stable outlook, for the Bank Loan facilities aggregating Rs.111.12 Crs of Khyber Industries Pvt. Ltd.

Particulars
Facilities** Amount (Rs.Crs.) Tenure Rating#
Previous Present Previous
(18 May 2021)
Present
Fund Based 91.89 110.12 Long Term BWR BB /Stable
Downgrade/ISSUER NOT COOPERATING*
BWR BBB - /Stable
Upgrade
6.50 0.00 Short Term BWR A4
Downgrade/ISSUER NOT COOPERATING*
_
Non Fund Based 1.00 1.00 Short Term BWR A4
Downgrade/ISSUER NOT COOPERATING*
BWR A3
Upgrade
Grand Total 99.39 111.12 (Rupees One Hundred Eleven Crores and Twelve 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

The removal from the Issuer not cooperating classification factors in cooperation by Khyber Industries Pvt Limited (KIPL or the company) in submitting the relevant financial & operational details along with the necessary updates. The revision in the ratings takes into account steady scale-up of operations in FY21 and FY22 (Prov.), steady improvement in the overall solvency profile, coupled with an adequate liquidity position. The ratings also derive strength from the long track record of operations of the company and its experienced promoters, along with improvement in the profitability margins since FY20. The ratings are, however, constrained by the geographical concentration risk and geopolitical risk limiting its scale of operations, along with exposure to the cyclicality associated with the industry and input prices.
 
Rating Outlook: Stable

BWR believes that KIPL’s 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 of substantial improvement improvement in scale of operations, profitability levels and the solvency profile.. BWR may revise its outlook from 'Stable' to 'Negative' in case there is a deterioration in the financial parameters over the medium term.

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: BWR may revise the ratings upward in case scale of operations witnesses a significant increase, profitability margins improves from the current levels and the overall solvency profile of the company also improves on a significant basis.

Negative: BWR may revise the ratings downwards if the company’s gearing deteriorates, profitability margins decline significantly and operating income declines substantially going forward.

LIQUIDITY INDICATORS - Adequate

The company's liquidity position continues to remain adequate as indicated by healthy net cash accrual at Rs.18.35Crsagainst CPLTD of Rs.5.24Crs in FY22 (Prov.). The company has a debt repayment obligation of Rs.5.33 Cr. in FY23, which is expected to be met through the internal accruals. Further the company has generated an average OPBDIT of Rs.22.79Crs for FY19~22 against the average interest obligation of Rs.7.97Crs for FY19~22, which provides cushion to the liquidity position of the company. The fund-based working capital utilization stood at 78% in the 6 months ending March 2022 with average utlization of 59.80% for the last 3 months ending March 2022. The cash conversion cycle of the company has improved to 46 days in FY22 (Prov.) from 98 days in FY21 and 146 days in FY20 on account of improved GCA days.

ABOUT THE ENTITY

Incorporated in 1982, Khyber Industries Pvt Ltd is involved in the manufacturing of grey cement. The company is run and managed by the Tramboo Family. The manufacturing facilities of the company are based in District Khonmoh, Srinagar, J&K. The company has an installed capacity of 1580 TPD ( Tons Per Day). The company promotes its cement under the Brand name “ Khyber” manufactured by adhering strictly to the BIS guidelines. 

KEY FINANCIAL INDICATORS (Standalone)
Key Parameters Units FY 21-22
(Provisional)
FY 20-21
(Audited)
Operating Revenue Rs.Crs. 300.47 239.49
EBITDA Rs.Crs. 25.35 26.18
PAT Rs.Crs. 7.76 7.62
Tangible Net Worth Rs.Crs. 92.34 84.54
Total Debt/Tangible Net Worth Times 0.99 0.85
Current Ratio Times 0.85 1.04

NON-COOPERATION WITH PREVIOUS CREDIT RATING AGENCY

Nil

ANY OTHER INFORMATION

NIl

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 110.12
BWR BBB-/Stable
(Upgrade)
18May2021
BWR BB Stable
(Downgrade/ISSUER NOT COOPERATING*)
16Apr2020
BWR BB+Stable
(Assignment)
NA
NA
Fund Based ST 0.00
NA
18May2021
BWR A4
(Downgrade/ISSUER NOT COOPERATING*)
16Apr2020
BWR A4+
(Assignment)
NA
NA
Non Fund Based ST 1.00
BWR A3
(Upgrade)
18May2021
BWR A4
(Downgrade/ISSUER NOT COOPERATING*)
16Apr2020
BWR A4+
(Assignment)
NA
NA
Grand Total 111.12 (Rupees One Hundred Eleven Crores and Twelve 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

Neha Jain

Senior Rating Analyst Board : +91 11 2341 2232 neha.j@brickworkratings.com

Sudeep Sanwal

Associate Director - Ratings sudeep.s@brickworkratings.com
1-860-425-2742 | media@brickworkratings.com
Khyber Industries 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 Jammu and Kashmir Bank Cash CreditSanctioned 35.00 _ 35.00
2 Jammu and Kashmir Bank Loans against PropertyOut-standing 53.74 _ 53.74
3 Jammu and Kashmir Bank Short Term Working Capital LoanSanctioned _ _ 0.00
4 Jammu and Kashmir Bank Bank GuaranteeSanctioned _ 1.00 1.00
5 Jammu and Kashmir Bank Common Covid Emergency Line of Credit (CCECL)Out-standing 21.38 _ 21.38
Total 110.12 1.00 111.12
TOTAL (Rupees One Hundred Eleven Crores and Twelve 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 11,541 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.