Brickwork Ratings reaffirms the long term ratings for the Bank Loan Facilities of Rs. 48.40 Crs. of Gangotri Paper Mills Pvt. Ltd.
ParticularsFacilities** | Amount (Rs.Crs.) | Tenure | Rating# | ||
---|---|---|---|---|---|
Previous | Present | Previous (26 Aug 2022) |
Present | ||
Fund Based | 52.19 | 48.40 | Long Term |
BWR BB/Stable
ISSUER NOT COOPERATING*/Downgraded |
BWR BB
/Stable Reaffirmation and Removed from the INC category |
Grand Total | 52.19 | 48.40 | (Rupees Forty Eight Crores and Forty lakhs Only) |
BWR has reaffirmed the Long Term ratings at BWR BB (Stable) for the bank loan facilities of Gangotri Paper Mills Pvt. Ltd.
BWR has principally relied upon audited financial results up to FY22, projected financials for FY23 & FY24, publicly available information and information/clarifications provided by the management of the firm and their representatives.
The rating draws support from experience of the promoters in the paper industry and has factored in the improved net worth and improved margins. However, the rating is constrained by lower debt protection metrics.
KEY RATING DRIVERSCredit Strengths:
Vinod Kumar Mittal and Pranay Mittal are the directors in the company. Vinod Kumar Mittal, aged 71 years, a law graduate and diploma in Mech. Engg. has 40 years experience in Tin containers manufacturing and 14 years exp. in Kraft paper manufacturing industry. Pranay Mittal, aged 41 years, an engineering and management graduate, has 18 years experience in Tin containers manufacturing and 12 years exp. in Kraft paper manufacturing industry. Promoters are supported by Sandeep Goel with 25 years exp. in accounts and finance, B Muralidharan with 26 years experience in manufacturing operations and Neel Kamal Agnihotri with 26 years exp. in Human Resource management.
Waste paper, a key raw material in the manufacturing of Kraft paper, is both imported and procured domestically from various suppliers. Finished products are supplied to various buyers that are generally wholesalers, majorly located in Northern India.
Total operating income of the company increased by 42.57%, thereby increasing the top line from Rs. 156.73 Crs in FY21 (Audited) to Rs. 223.45 Crs. in FY22(Audited).The TNW of the company improves from Rs. 16.86 Cr in FY21 to Rs. 27.53 Cr in FY22. The current ratio increased from 1.12x in FY21 to 1.21x in FY 22.
Paper manufacturing industry is characterised by presence of various small and medium paper manufacturers catering to same set of buyers leading to intense competition in sourcing of RM and pricing of finished products affecting operating margins of businesses.
Operations of the business are energy intensive and the company has been relying on supply of external power from the state electricity department for meeting its energy requirements and presently does not have captive power supply. As a result, power supply breakdown adversely affects production in the company.
DSCR of the company is low which stands at 0.73x in FY22 which is estimated to be 0.96x in FY23 and 1.00x in FY24.
For arriving at its ratings, BWR has applied its rating methodology as detailed in the Rating Criteria detailed below (hyperlinks provided at the endof this rationale).
RATING SENSITIVITIES
Going forward the ability of the firm to increase the revenue and profitability and maintaining overall financial risk profile will be the key rating sensitivities
Positive: BWR may revise the ratings upward in the case there is substantial improvement in scale of operations and financial risk profile.
Negative: BWR may revise the rating downward in the case there is deterioration in revenues, profitability and overall liquidity profile of the company.
Gangotri Paper Mills Pvt. Ltd., incorporated on 01.04.1997 with its registered office at Plot No. 39, Pocket E-1, Sector-7, Rohini, New Delhi, is engaged in the production of eco-friendly recycled multilayer Kraft Paper for the corrugation industry. Vinod Kumar Mittal and Pranay Mittal are the directors in the company. The unit is located in village and post Narsan Kalan, Haridwar, on Delhi-Haridwar National Highway.
KEY FINANCIAL INDICATORS (Standalone)Key Parameters | Units |
FY 21-22 (Audited) |
FY 20-21 (Audited) |
---|---|---|---|
Operating Revenue | Rs.Crs. | 223.45 | 156.73 |
EBITDA | Rs.Crs. | 9.53 | 10.26 |
PAT | Rs.Crs. | 1.80 | 1.22 |
Tangible Net Worth | Rs.Crs. | 27.53 | 16.86 |
Total Debt/TNW | Times | 1.94 | 3.68 |
Current Ratio | Times | 1.21 | 1.12 |
NA
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 | 48.40 |
BWR BB/Stable
(Reaffirmation and Removed from the INC category) |
26Aug2022 |
BWR BBStable
(ISSUER NOT COOPERATING*/Downgraded) |
13Aug2021 |
BWR BB+Stable
(Downgrade) |
07May2020 |
BWR BBB-Negative
(Reaffirmation) |
14Mar2019 |
BWR BBB-Stable
(Reaffirmation) |
Non Fund Based | ST | 0.00 |
NA
|
NA |
NA
|
NA |
NA
|
NA |
NA
|
14Mar2019 |
BWR A3
(Reaffirmation) |
Grand Total | 48.40 | (Rupees Forty Eight Crores and Forty 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 | |
---|---|
Ashish Kumar Ratings Analyst ashish.k@brickworkratings.com |
Hari Kishan Yadav Associate Director - Ratings hari.ky@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 | Punjab National Bank | Term Loan | 13.40 | _ | 13.40 | |
2 | Punjab National Bank | Cash Credit | 35.00 | _ | 35.00 | |
Total | 48.40 | 0.00 | 48.40 | |||
TOTAL (Rupees Forty Eight Crores and Forty 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 12,000 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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