RATING RATIONALE
16Dec2022

Greenchef Appliances Limited

Brickwork Ratings upgrades the long term rating and reaffirms the short term rating and removes the ratings from the "Issuer Not Cooperating" category for the Bank Loan Facilities of Rs. 53.43 Crs. of Greenchef Appliances Limited

Particulars
Facilities** Amount (Rs.Crs.) Tenure Rating#
Previous Present Previous
(11 Nov 2022)
Present
Fund Based 0.00 51.93 Long Term BWR B- /Stable
Continues to be in ISSUER NOT COOPERATING Category*/Reaffirmed
BWR BB + /Stable
removal from ISSUER NOT COOPERATING* category/Upgraded
Non Fund Based 0.00 1.50 Short Term BWR A4
Continues to be in ISSUER NOT COOPERATING Category*/Reaffirmed
BWR A4
removal from ISSUER NOT COOPERATING* category/Reaffirmed
Grand Total 0.00 53.43 (Rupees Fifty Three Crores and Forty 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) upgrades the long term rating to "BWR BB+ / Stable" and reaffirms the short term rating of "BWR A4" along with removal of the ratings from the "issuer Not Cooperating" category for the bank loan facilities of "Greenchef Appliances Limited".

BWR has essentially relied upon the audited financial statements of "Greenchef Appliances Limited" of FY20, FY21,FY22, and projected financial statements of FY23, FY24, publicly available information and information / clarifications provided by the entity’s management. The rating draws strength from the vast business experience of the promoting directors, established track of operations, significant improvement in revenue in FY 22 and moderate financial risk profile. However, the rating is constrained by decline in PAT margin in FY22 along with intense competition with presence of several large players in home appliances and consumer electronics segment in india.

BWR believes that "Greenchef Appliances Limited" 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:


Credit Risks:

ANALYTICAL APPROACH - Standalone

Standalone approach has been adopted and BWR has applied its rating methodology as detailed in the rating criteria (hyperlinks provided at the end of the rationale). 

RATING SENSITIVITIES

Going forward, the ability of the company to improve its scale of operations by increasing its revenue growth and achieve its financial projections, improve its profit margins, manage working capital efficiency and prompt servicing of debt obligation shall remain key rating sensitivity.

Positive:

Sustained improvement in operating revenue and steady operating margin leading to higher net cash accruals.

Improvement in interest coverage ratio.

Efficient working capital management.

Negative:

Further stretch in working capital requirement or major debt-funded capital expenditure,

Weakening the financial risk profile by significant decline in revenue and operating margin leading to lower net cash accrual.

Deterioration in overall financial risk profile and key financial indicators would be negative for the ratings.

LIQUIDITY INDICATORS - Adequate

The current ratio of the company was adequate at 1.57 times as on 31 March 2022 as against 1.90 times as on 31 March 2021. Net Cash Accrual have been increased from Rs. 21. 19 Crs in FY21 to Rs. 42.40 Crs in FY22. Net cash accruals to long term debt improved from  0.86 times as on 31 March 2021 to 1.38 times as on 31 March 2022. Cash and Cash Equivalents of the Company has increased from Rs. 1.38 Crs in FY21 to 1.67 Crs in FY22. The average working capital utilization of the company was ~ 92% for the last six months. Working Capital for DSCR has increased from Rs. 81.52 Crs to Rs. 87.36 Crs in FY22. The company is in capex mode and undertaking construction of factory building.

ABOUT THE ENTITY

GreenChef Appliances Limited was incorporated in June, 2010 with its registered office situated at Peenya Industrial Area, Bangalore, Karnataka. The company has three  manufacturing units out of which two are in Bengaluru, Karnataka and one in Solan, Himachal Pradesh. The company is ISO 9001: 2008 Certified company. The company started off as an exclusive manufacturer of LPG stoves but gradually forayed into home appliances  kitchen wares and  electrical items. The product range includes Pressure Cookers, Non-Stick Cookware, Rice Cookers, Table Top Grinder, Mixer Grinder, Hobs, LP Gas Stoves, Kettles, and other small electrical appliances. The company sells its products with the brand name “Greenchef”. At present the company has 25 categories of products in Household and Kitchenware segments and sells its products Pan India by its distribution networks and also exports few products to Sri Lanka. The company also sells its products online on ecommerce sites like Amazon, Flipkart, etc.

KEY FINANCIAL INDICATORS (Standalone)
Key Parameters Units FY 21-22
(Audited)
FY 20-21
(Audited)
Operating Revenue Rs.Crs. 335.62 238.93
EBITDA Rs.Crs. 7.64 9.72
PAT Rs.Crs. 0.51 3.06
Tangible Net Worth Rs.Crs. 50.25 50.25
Total Debt/TNW Times 1.31 1.02
Current Ratio Times 1.57 1.90
KEY COVENANTS OF THE FACILITY RATED

The terms of sanction include standard covenants normally stipulated for such facilities.


STATUS OF NON-COOPERATION WITH PREVIOUS CRA

CARE Ratings has moved the ratings of the bank loan facilities of Rs. 41.90 Crores of 'Greenchef Appliances Limited' to the ‘Issuer Not Cooperating’ category on 27 July 2022, with ratings of “CARE BB; Stable; ISSUER NOT COOPERATING and CARE A4 ; ISSUER NOT COOPERATING”.

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 51.93
BWR BB+/Stable
(removal from ISSUER NOT COOPERATING* category/Upgraded)
11Nov2022
BWR B- Stable
(Continues to be in ISSUER NOT COOPERATING Category*/Reaffirmed)
10Jun2021
BWR B- Stable
(Downgrade/ISSUER NOT COOPERATING*)
26May2020
BWR B Stable
(Downgrade/ISSUER NOT COOPERATING*)
NA
NA
Non Fund Based ST 1.50
BWR A4
(removal from ISSUER NOT COOPERATING* category/Reaffirmed)
11Nov2022
BWR A4
(Continues to be in ISSUER NOT COOPERATING Category*/Reaffirmed)
10Jun2021
BWR A4
(Reaffirmation/ISSUER NOT COOPERATING*)
26May2020
BWR A4
(Reaffirmation/ISSUER NOT COOPERATING*)
NA
NA
Grand Total 53.43 (Rupees Fifty Three Crores and Forty 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

Soubhagya Ranjan Kahalsingh

Ratings Analyst Board : +91 80 4040 9940 soubhagya.rs@brickworkratings.com

Ramesh N

Associate Director - Ratings ramesh.n@brickworkratings.com
1-860-425-2742 | media@brickworkratings.com
Greenchef Appliances Limited
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 Canara Bank Term LoanSanctioned 15.00 _ 15.00
2 Canara Bank Cash CreditSanctioned 31.00 _ 31.00
3 Canara Bank Bank GuaranteeSanctioned _ 0.50 0.50
4 Canara Bank Letter of CreditSanctioned _ 1.00 1.00
5 Canara Bank GECLOut-standing 2.46 _ 2.46
6 Canara Bank GECL 2.0Sanctioned 3.47 _ 3.47
Total 51.93 1.50 53.43
TOTAL (Rupees Fifty Three Crores and Forty Three lakhs Only)
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About Brickwork Ratings

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