RATING RATIONALE
28Sep2022

Vishwaraj Sugar Industries Ltd.

Brickwork Ratings reaffirms the ratings for the Bank Loan Facilities of Rs.244.63 Crs. of Vishwaraj Sugar Industries Ltd. Particulars.

Particulars
Facilities** Amount (Rs.Crs.) Tenure Rating#
Previous Present Previous
(20 May 2022)
Present
Fund Based 175.00 244.63 Long Term BWR BBB-/Stable
Upgrade
BWR BBB - /Stable
Reaffirmation
Non Fund Based (10.00) (10.00) Short Term BWR A3
Upgrade
BWR A3
Reaffirmation
Grand Total 175.00 244.63 (Rupees Two Hundred Forty Four Crores and Sixty Three 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

Brickwork Ratings (BWR) reaffirms the bank loan rating of Vishwaraj Sugar Industries Ltd (VSIL or the company).
The rating continues to factor in the experience of promoters in the sugar industry, the favorable location, the diversified revenue profile of the integrated unit, and established relationships with farmers for the procurement of sugarcane. The ratings remain constrained by working capital-intensive operations, agro-climatic risks, susceptibility to regulatory changes, and the cyclicality of the sugar industry.
BWR believes that VSIL’s business risk profile will be maintained over the medium term. The Stable outlook indicates a low likelihood of a rating change over the medium term.

KEY RATING DRIVERS

Credit Strengths:


Credit Risks:

ANALYTICAL APPROACH - Standalone

BWR has relied on the standalone audited financial results of VSIL up to FY22, unaudited financial results for Q1FY23, projected financials up to FY24, publicly available information, and clarifications/information provided by the management.

RATING SENSITIVITIES

Positive: If the company manages to achieve its projections and improve the profitability margins as envisaged, the same would be positive for the ratings.

Negative: A deterioration in sales and key financial indicators, and higher-than-projected debt would be negative for the ratings.

LIQUIDITY INDICATORS - Adequate

The company’s current ratio was comfortable, at 1.14x as on 31 March 2022, and it had a cash and bank balance of Rs.13.16 Crs as on 31 March 2022. The average CC utilization for the last 6-month period ending July 2022 is around 53%.

The company is expected to generate cash accruals of Rs.60.13 Crs and Rs.65.98 Crs in FY23 and FY24, respectively, against a principal debt repayment of Rs.38.26 Crs and Rs.30.91 Crs.

ABOUT THE ENTITY

Vishwaraj Sugar Industries Ltd. (VSIL) based in Belgaum, Karnataka, and was incorporated in May 1995; it is listed on the BSE and NSE. It is engaged in the manufacturing of sugar, alcoholic spirits by distillation including ethanol and natural alcohol vinegar, and generation of power. The company has a fully integrated plant at Bellad Bagewadi, Belgaum District in North Karnataka. The company procures only sugarcane as raw material from local farmers and utilises the by-products for distillery unit and power generation.

KEY FINANCIAL INDICATORS (Standalone)
Key Parameters Units FY 21-22
(Audited)
FY 20-21
(Audited)
Operating Revenue Rs.Crs. 468.75 426.46
EBITDA Rs.Crs. 93.45 62.19
PAT Rs.Crs. 60.16 8.29
Tangible Net Worth Rs.Crs. 282.59 226.01
Total Debt/TNW Times 1.31 1.66
Current Ratio Times 1.14 1.12

STATUS OF NON-COOPERATION WITH PREVIOUS CRA

India Ratings has migrated the Bank loan rating of VSIL to IND BB/Issuer Not Cooperating in Jan 2022.

RATING HISTORY FOR THE PREVIOUS THREE YEARS (including withdrawal and suspended)
Facilities Current Rating (2022) 2022 (History) 2021 2020 2019
Type Tenure Amount
(Rs.Crs.)
Rating Date Rating Date Rating Date Rating Date Rating
Fund Based LT 244.63
BWR BBB-/Stable
(Reaffirmation)
20May2022
BWR BBB-Stable
(Upgrade)
27Aug2021
BWR BB+Stable
(Assignment)
NA
NA
NA
NA
NFB SubLimit ST (10.00)
BWR A3
(Reaffirmation)
20May2022
BWR A3
(Upgrade)
27Aug2021
BWR A4+
(Assignment)
NA
NA
NA
NA
Grand Total 244.63 (Rupees Two Hundred Forty Four Crores and Sixty Three 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

Prashant Sahadev Mondkar

Ratings Analyst Board : +91 22 2831 1426, +91 22 2831 1439 prashant.sm@brickworkratings.com

Chintan Dilip Lakhani

Director- Ratings chintan.l@brickworkratings.com
1-860-425-2742 | media@brickworkratings.com
Vishwaraj Sugar Industries 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 Bank of India Cash CreditSanctioned 46.00 _ 46.00
2 Bank of India Working Capital Demand LoanSanctioned 69.00 _ 69.00
3 Bank of India GECLSanctioned 39.63 _ 39.63
4 State Bank Of India (SBI) Cash Credit (WHR)Sanctioned _ _ 0.00
5 State Bank Of India (SBI) Working Capital Demand LoanSanctioned 90.00 _ 90.00
Total 244.63 0.00 244.63
TOTAL (Rupees Two Hundred Forty Four Crores and Sixty Three lakhs Only)
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