Brickwork Ratings reaffirms the Long term rating at BWR BB+/Stable & short term rating at BWR A4+ for the Bank Loan Facilities of Rs. 9.50 Crs. of A.S. Enterprise
ParticularsFacilities** | Amount (Rs.Crs.) | Tenure | Rating#@ | ||
---|---|---|---|---|---|
Previous | Present | Previous (13 Oct 2021) |
Present | ||
Fund Based | (4.00) | (4.00) | Long Term |
BWR BB+ /Stable
Reaffirmation |
BWR BB +
/Stable Reaffirmation |
10.00 | 9.00 | Short Term |
BWR A4+
Reaffirmation |
BWR A4 +
Reaffirmation |
|
Non Fund Based | 0.50 | 0.50 | Short Term |
BWR A4+
Reaffirmation |
BWR A4 +
Reaffirmation |
(0.00) | (0.00) | ||||
(10.00) | (10.00) | ||||
(2.00) | (2.00) | ||||
Grand Total | 10.50 | 9.50 | (Rupees Nine Crores and Fifty lakhs Only) |
The Long term rating of the Bank Loan Facilities of the entity A.S.Enterprise has been reaffirmed at BWR BB+/Stable. Brickwork Ratings (BWR) has essentially relied on the audited financial statements of A.S.Enterprise up to FY22, projections upto FY24 publicly available information, and information/clarifications provided by the company’s management and its bankers to arrive at the present ratings BWR believes that the business risk profile of A.S.Enterprise will be maintained over the medium term. The 'Stable' outlook indicates a low likelihood of rating change over the medium term. The ratings have been reaffirmed on account of the experience of the promoters, Longstanding Relations With The Customers, Financial Risk Profile, Coverage Indicator. The rating is however constrained due to Partnership Concern, Exposure to intense competition and working capital intensive nature of business & Negative business sentiments in global markets due to Coronavirus outbreak and economic slowdown.
KEY RATING DRIVERSCredit Strengths:
A.S. Enterprise is promoted by two partners, Mr. Amit Shah and Mr. Sandip Kothari. Both partners have almost 3 decades of experience and expertise of Diamond industry.
The firm has established relations with customers resulting in repeat orders providing revenue visibility.
TOI has improved to Rs 94.99 Cr in FY22 v/s Rs 55.93 Cr in FY21. TOI of the company is projected to increase more to Rs 63.00 Cr in FY23. Since the entity has already achieved sales of Rs 68.40 Crs from Apr - Dec 2022 in 9 month period, the analyst is of the view that the client is in a position to achieve the projected sales of Rs 95 Crs in FY23.
PAT has improved to Rs 2.45 Cr in FY22 v/s Rs 1.56 Cr in FY21 on account of increase in sales.
TNW of the company has increased to Rs. 18.33 Crs. in FY22 as compared to Rs. 17.01 Crs in FY21 & as projected at Rs 20.00 Crs in FY23.
The company has a moderate financial risk profile (TotalDebt/TNW) & (TOL/TNW) is 0.83X & 2.96X in FY22 as compared to 0.70X & 2.02X in FY21.
Debt Protection Metrics of the company is adequate to service the debt obligations with ISCR and DSCR standing at 7.10x and 4.04x respectively in FY22 as compared to 5.41x and 4.37x respectively in FY21.
There is an inherent risk involved in a partnership concern,wherein any significant capital withdrawal may lead to an adverse capital structure.
Being present in an industry with presence of a number of large and established players, the firm is exposed to competition, which may limit its pricing flexibility and bargaining power with customers, which in turn places pressure on profitability of the firm. Operations of the firm to be working capital intensive, in line with the general industry trends.
The performance of Gems and Jewellery exports over last few years has remained largely on the declining trend led by economic slowdown, China US trade war, Hong Kong protest etc., further, led by outbreak of covid-19 the export of the entity was impacted. Nontheless, the exports of Gems and Jewellery from India has witnessed a gradual recovery as visible from FY21.
For arriving at its ratings, BWR has applied its rating methodology as detailed in the Rating Criteria detailed below (hyperlinks provided at the end of this rationale). The company has no group entity.
RATING SENSITIVITIES
Going forward, the firm's ability to increase the scale of operations, improve profit margins, and efficiently manage its working capital cycle and control receivables and payable days remains the key rating sensitivities
Upward: The ratings may be revised upward if the firm registers more than envisaged sales and profitability while maintaining its liquidity position.
Downward: The ratings may be downgraded in case revenues of the firm substantially deteriorates from current level. Any additional borrowing by the firm may lead to further deterioration in the financial risk profile such as Debt/Equity ratio, debt protection metrics and profit margins
The liquidity position of the company is adequate with current ratio of 1.36x in FY22.
The net cash accurals is Rs 2.18 Crs as against the NIL debt obligations Crs in FY22 & projected net cah accurals Rs 4.52 Crs as against NIL debt obligations Crs in FY23.
The cash & cash balance stands at Rs 0.22 Crs as on 31st March 2022.
ABOUT THE ENTITYIncorporated in Jan 1986 as Partnership firm, A.S.Enterprise is involved in cutting polishing of rough diamonds.The Firm generally imports rough diamonds from Belgium, Thailand, U.S and polish them, and exports them to different countries. US contributes 25% of total exports and firm has its manufacturing division at Dahisar, Mumbai.
KEY FINANCIAL INDICATORS (Standalone)Key Parameters | Units |
FY 21-22 (Audited) |
FY 20-21 (Audited) |
---|---|---|---|
Operating Revenue | Rs.Crs. | 94.99 | 55.93 |
EBITDA | Rs.Crs. | 2.83 | 1.59 |
PAT | Rs.Crs. | 2.45 | 1.56 |
Tangible Net Worth | Rs.Crs. | 18.33 | 17.01 |
Total Debt/TNW | Times | 0.83 | 0.70 |
Current Ratio | Times | 1.36 | 1.58 |
NA
RATING HISTORY FOR THE PREVIOUS THREE YEARS (including withdrawal and suspended)Facilities | Current Rating (2023) | 2022 | 2021 | 2020 | |||||
---|---|---|---|---|---|---|---|---|---|
Type | Tenure | Amount (Rs.Crs.) |
Rating | Date | Rating | Date | Rating | Date | Rating |
Fund Based | LT | 0.00 |
NA
|
NA |
NA
|
NA |
NA
|
29Jul2020 |
BWR BB+ Stable
(Assignment) |
FB SubLimit | LT | (4.00) |
BWR BB+/Stable
(Reaffirmation) |
NA |
NA
|
13Oct2021 |
BWR BB+ Stable
(Reaffirmation) |
NA |
NA
|
Fund Based | ST | 9.00 |
BWR A4+
(Reaffirmation) |
NA |
NA
|
13Oct2021 |
BWR A4+
(Reaffirmation) |
NA |
NA
|
Non Fund Based | ST | 0.50 |
BWR A4+
(Reaffirmation) |
NA |
NA
|
13Oct2021 |
BWR A4+
(Reaffirmation) |
NA |
NA
|
NFB SubLimit | ST | (10.00) |
BWR A4+
(Reaffirmation) |
NA |
NA
|
13Oct2021 |
BWR A4+
(Reaffirmation) |
29Jul2020 |
BWR A4+
(Reaffirmation) |
NFB SubLimit | ST | (2.00) |
BWR A4+
(Reaffirmation) |
NA |
NA
|
NA |
NA
|
NA |
NA
|
Grand Total | 9.50 | (Rupees Nine Crores and Fifty 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 | |
---|---|
Suman Prabitra Paul Ratings Analyst suman.p@brickworkratings.com |
Sushil Kumar Chitkara Director - Ratings Board : +91 22 2831 1426, +91 22 2831 1439 sushilkumar.c@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 | Kotak Mahindra Bank | Packing Credit in Foreign Currency (PCFC)Sanctioned | _ | 9.00 | 9.00 |
Sub-Limit (Counter Bank Guarantee) Sanctioned | (0.00) | ||||
Sub-Limit (FBP/FBD/FBN/FDBP/FUDBP/ AFDBC) Sanctioned | (10.00) | ||||
Sub-Limit (Overdraft) Sanctioned | (4.00) | ||||
Sub-Limit (WCDL) Sanctioned | (2.00) | ||||
2 | Kotak Mahindra Bank | Forward ContractSanctioned | _ | 0.50 | 0.50 |
Total | 0.00 | 9.50 | 9.50 | ||
TOTAL (Rupees Nine Crores and Fifty 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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