Brickwork Ratings reaffirm the ratings for the Bank Loan Facilities of Rs. 23.80 Crs. of Rama Enterprises (A Unit of Param Shakti Dhatu Udyog Pvt. Ltd.)
ParticularsFacilities** | Amount (Rs.Crs.) | Tenure | Rating# | ||
---|---|---|---|---|---|
Previous | Present | Previous (27 Apr 2021) |
Present | ||
Fund Based | 18.80 | 23.80 | Long Term |
BWR BB/Stable
Reaffirmation |
BWR BB
/Stable Reaffirmation |
(16.00) | (16.00) | ||||
Grand Total | 18.80 | 23.80 | (Rupees Twenty Three Crores and Eighty lakhs Only) |
BWR reaffirmed the long-term rating at “BWR BB” with “Stable” outlook for the bank loan facilities of Rama Enterprise (A Unit of Param Shakti Udyog Pvt. Ltd.).
The rating was draws strength from Experienced Directors and long operational track record and Moderate Financial Profile. However, the rating is constrained on account of High Competition and Trading nature of business and thin margins.
The rating outlook has been assigned as "Stable" as BWR believes that Biogenetic Drug 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 profits show sustained improvement. The rating outlook may be revised to 'Negative' if the financial risk profile goes down.
KEY RATING DRIVERSCredit Strengths:
Rama Enterprises (A Unit of Param Shakti Dhatu Udyog Pvt. Ltd.) is in existence since 1982 and over two-decades of promoters’ experience in the field of iron and steel trading resulting in established relationships with customers and suppliers.
Total operating income of the company decreased from Rs.133.98crs in FY20(A) to Rs.72.40crs in FY21(A). The company informed that, they achieved the net sales of Rs.127.20crs in FY22. Tangible net worth has marginally improved from Rs.6.53crs in FY20(A) to Rs.6.64crs in FY21(A), although the tangible net worth (analysed) declined from Rs.9.21crs in FY20(A) to Rs.7.09crs in FY21(A). Total Debt/TNW improved from 4.54x in FY20(A) to 3.67x in FY21(A) and Total Debt/TNW (analysed) deteriorated to 3.37x in FY21(A) as against 2.93x in FY20(A). ISCR marginally improved to 1.18x in FY21(A) as against 1.14x in FY20(A) and DSCR reduced from 1.06x in FY20(A) to 0.97x in FY21(A). Net Profit Margin deteriorated to 0.16% FY21(A) as against 0.23% in FY20(A) and Operating Profit Margin improved from 2.69% in FY20(A) to 3.20% in FY21(A). Current Ratio improved from 1.27x in FY20(A) to 1.55x in FY21(A).
The company has to compete with local & unorganized players where the entry barriers are low due to intense competition in the iron and steel business.
Rama Enterprises (A Unit of Param Shakti Dhatu Udyog Pvt. Ltd.) trading nature of the business, coupled with low-value addition puts pressure on the profitability and limits the pricing power of the company.
Going forward, the ability of the firm to improve its financial profile and maintaining adequate liquidity will remain the key rating sensitivities.
Positive: The rating may be upgraded if the company inter alia, is able to improve its topline and generate profits, 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
Cash and cash equivalent in FY21(A) is Rs.0.12crs. Long term borrowings of Rs.4.94crs in FY21(A) includes GECL of Rs.4.00crs and WCDL (Under Covid Scheme) of Rs.0.44crs and unsecured loans from directors of Rs.0.44crs in FY21(A) for indefinite period. The entity has not submitted the cash flow statement. There is around 93.22% utilisation of OD limit for the last six months i.e. from October 2021 to March 2022 from Canara Bank and around 71.57% utilisation of CC limit for the last six months i.e. from October 2021 to March 2022 from SBI. The current ratio of the company stood at 1.55x in FY21(A). ISCR and DSCR stood at 1.18x and 0.97x during FY21(A).
Group Concerns; if Any: Nil
ABOUT THE ENTITYRAMA ENTERPRISES (A Unit of Param Shakti Dhatu Udyog Pvt. Ltd.) based in Faridabad, holds a moderate presence in the region, since 1982. ), the company has now entered in manufacturing arenas of Color Coated HI-RIB Profile Sheets, Polycarbonate roofing sheets, Fiber profile sheets. The company is also engaged in pre-engineering works, such as designing, fabrication and installation, all customized as per requirements. The company uses fully computerized and automatic machines and professionally experienced team. RAMA ENTERPRISES is a trade name of Param Shakti Dhatu Udyog Pvt. Ltd.
KEY FINANCIAL INDICATORS (Standalone)Key Parameters | Units |
FY 20-21 (Audited) |
FY 19-20 (Audited) |
---|---|---|---|
Operating Revenue | Rs.Crs. | 72.40 | 134.21 |
EBITDA | Rs.Crs. | 2.32 | 3.62 |
PAT | Rs.Crs. | 0.11 | 0.31 |
Tangible Net Worth | Rs.Crs. | 6.64 | 6.53 |
Total Debt/Tangible Net Worth | Times | 3.67 | 4.54 |
Current Ratio | Times | 1.55 | 1.27 |
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 | 23.80 |
BWR BB/Stable
(Reaffirmation) |
27Apr2021 |
BWR BBStable
(Reaffirmation) |
22Jan2020 |
BWR BBStable
(Reaffirmation) |
NA |
NA
|
FB SubLimit | LT | (16.00) |
BWR BB/Stable
(Reaffirmation) |
27Apr2021 |
BWR BBStable
(Reaffirmation) |
22Jan2020 |
BWR BBStable
(Reaffirmation) |
NA |
NA
|
Grand Total | 23.80 | (Rupees Twenty Three Crores and Eighty lakhs 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 | |
---|---|
Akash Chaubey Ratings Analyst akash.c@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 | Canara Bank | OCC/ODBDSanctioned | 18.80 | _ | 18.80 | |
Sub-Limit (SL-ODBD) Sanctioned | (16.00) | |||||
2 | State Bank Of India (SBI) | Cash CreditSanctioned | 5.00 | _ | 5.00 | |
Total | 23.80 | 0.00 | 23.80 | |||
TOTAL (Rupees Twenty Three Crores and Eighty lakhs Only) |
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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 11,541 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.
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