Brickwork Ratings reaffirms and withdraws the ratings for the Bank Loan Facilities of Rs. 752.64 Crs. of LT Foods Ltd.
ParticularsFacilities** | Amount (Rs.Crs.) | Tenure | Rating# | ||
---|---|---|---|---|---|
Previous | Present | Previous (23 Dec 2021) |
Present | ||
Fund Based | 789.00 | 664.64 | Long Term |
BWR A+/Stable
Reaffirmation |
BWR A +
/Stable Reaffirmation/Withdrawal |
Non Fund Based | 91.00 | 88.00 | Short Term |
BWR A1+
Reaffirmation |
BWR A1 +
Reaffirmation/Withdrawal |
Grand Total | 880.00 | 752.64 | (Rupees Seven Hundred Fifty Two Crores and Sixty Four lakhs Only) |
Brickwork Ratings (BWR) has reaffirmed the long- and short-term rating of LT Foods Limited (LTF) to BWR A+(Stable)/BWR A1+ for the above bank loan facilities and simultaneously withdraw the ratings. The rating reaffirmation is underpinned by the company’s strong business profile and consistent improvement in the credit profile and financial performance in FY21 and H1FY23, in turn driven by a growing EBITDA and PAT in its resilient rice processing business, along with comfortable credit ratios. The ratings continue to factor in the company’s long track record and experienced management, strong distribution network, diversified product portfolio and strong brand recall, geographical diversification and large scale of operations, coupled with a sound financial risk profile. The rating is, however, constrained by the inherent business risks of the susceptibility of the profitability margins to an adverse movement in raw material prices, competitive nature of the industry, working capital intensity and exposure to commodity, currency and agro climatic risks, which could result in pressure on the margins. The withdrawal of ratings is due to fact that company has submitted No objection certificate and No dues certificate from all lenders.
BWR also notes that the group, , registered a consolidated turnover of Rs 5427.37 Crs in FY22, compared with Rs 4741.91Crs in FY21 at a growth rate of 14.55% due to the essential nature of the industry. The group’s PAT improved from Rs 289.08 Crs in FY21 to Rs 309.20 Crs in FY22. At the group level, funds raised through the QIP during FY18 helped cover the working capital requirements and thus, reduced dependence on external debt over the years. As a result, the group's total outside liabilities to net worth (TOL/ANW) ratio improved to 1.07x as on 31 March 2022 (from around 1.23x as on 31 March 2021) and may improve further due to the reduction in debt levels with no major capex plans over the medium term. The overall debt protection metrics (consolidated) improved in FY22 as compared to FY21, as indicated by the interest service coverage ratio (ISCR) and debt service coverage ratio (DSCR) of 8.68x and 4.77x in FY22 against 6.42x and 4.2x in FY21 respectively; the debt protection metrics overall are expected to improve further in the next two fiscal years with no major debt-funded capital expenditure over the medium term. At consolidated level growth in H1 FY 23 is ~31.70 % driven by 15 % from volumes and 16 % from improvement in price realization. At consolidated level growth in topline is 31.70 % to Rs 3335.94 Crs in H1 FY 23 as compared to Rs 2523.84 Crs in H1 FY 22. Improvement in EBITDA is 15.56 % to Rs 338.54 Crs in H1 FY 23 as compared to Rs 292.95 Crs in H1 FY 22. PAT improved by 21.36 % to Rs 190.56 Crs in H1 FY 23 as compared to Rs 157.01 Crs in H1 FY 22 .ISCR improved to 9.82 x in H1 FY 23 as against 8.84 x in H1 FY 22. Gearing increased marginally to 0.49 x in H1 FY 23 as compared to 0.43 x in H1 FY 22.TOL/TNW increased marginally to 0.84 x in H1 FY 23 as compared to H1 FY 22.
The rating outlook is stable on account of a sound demand outlook for the rice industry for both the short and medium term due to its essential nature and is hence, not impacted much by the Covid-19 pandemic.
ABOUT THE ENTITYLTF was incorporated as a private limited company in 1990, although it has a track record of operations since 1950, and it mills, processes and markets rice (largely Basmati). The company has established brands such as Daawat, Royal, Devaaya, Rozana, Heritage and Chef's Secretz, varying from basic to premium quality, both in the domestic and overseas markets. It has facilities in Haryana, Punjab, with a combined milling capacity of 104 tonnes per hour (tph) and individual capacity of 57 tph. The capacity utilisation was 66% in FY21 at a standalone level.
ANY OTHER INFORMATIONRATING 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 | 664.64 |
BWR A+/Stable
(Reaffirmation/Withdrawal) |
23Dec2021 |
BWR A+Stable
(Reaffirmation) |
04Nov2020 |
BWR A+ Stable
(Assignment) |
NA |
NA
|
0.00 |
NA
|
NA |
NA
|
11Nov2020 |
BWR A+Stable
(Reaffirmation) |
NA |
NA
|
||
Non Fund Based | ST | 88.00 |
BWR A1+
(Reaffirmation/Withdrawal) |
23Dec2021 |
BWR A1+
(Reaffirmation) |
04Nov2020 |
BWR A1+
(Assignment) |
NA |
NA
|
0.00 |
NA
|
NA |
NA
|
11Nov2020 |
BWR A1+
(Reaffirmation) |
NA |
NA
|
||
Grand Total | 752.64 | (Rupees Seven Hundred Fifty Two Crores and Sixty Four 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 | |
---|---|
Karan Ahluwalia Senior Rating Analyst Board : +91 11 2341 2232 karan.a@brickworkratings.com |
Ravi Rashmi Dhar ravi.d@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 | CTBC Bank Company Limited | Forward ContractSanctioned | _ | 5.00 | 5.00 | |
2 | CTBC Bank Company Limited | Working Capital Demand LoanSanctioned | 50.00 | _ | 50.00 | |
3 | Doha Bank | Working Capital Demand LoanSanctioned | 60.00 | _ | 60.00 | |
4 | HDFC Bank | Forward ContractSanctioned | _ | 10.00 | 10.00 | |
5 | HDFC Bank | EPC/ PCFC/ FBP/ PSFCSanctioned | 40.00 | _ | 40.00 | |
6 | ICICI Bank | Forward ContractSanctioned | _ | 10.00 | 10.00 | |
7 | ICICI Bank | EPC/ PCFC/ FBP/ PSFCSanctioned | 25.00 | _ | 25.00 | |
8 | IDFC First Bank Limited | Working Capital Demand LoanSanctioned | _ | _ | 0.00 | |
9 | Indian Bank | Gold CardSanctioned | _ | _ | 0.00 | |
10 | Indian Bank | Post ShipmentSanctioned | _ | _ | 0.00 | |
11 | Indian Bank | ILC/FLCSanctioned | _ | _ | 0.00 | |
12 | Indian Bank | EPC/ PCFC/ FBP/ PSFCSanctioned | _ | _ | 0.00 | |
13 | Indian Bank | CC (H)/WCDLSanctioned | _ | _ | 0.00 | |
14 | IndusInd Bank | EPC/ PCFC/ FBP/ PSFCSanctioned | 77.00 | _ | 77.00 | |
15 | IndusInd Bank | ILC/FLCSanctioned | _ | 15.00 | 15.00 | |
16 | KB Kookmin Bank | Working Capital Demand LoanSanctioned | _ | _ | 0.00 | |
17 | Kotak Mahindra Bank | Forward ContractSanctioned | _ | 1.00 | 1.00 | |
18 | Kotak Mahindra Bank | EPC/ PCFC/ FBP/ PSFCSanctioned | 10.00 | _ | 10.00 | |
19 | Kotak Mahindra Bank | CC (H)/WCDLSanctioned | 30.00 | _ | 30.00 | |
20 | Punjab National Bank | CC (H)/WCDLSanctioned | 191.00 | _ | 191.00 | |
21 | Punjab National Bank | ILC/FLCSanctioned | _ | 38.00 | 38.00 | |
22 | Punjab National Bank | Forward ContractSanctioned | _ | 3.00 | 3.00 | |
23 | Punjab National Bank | Gold CardSanctioned | 24.00 | _ | 24.00 | |
24 | Qatar National Bank | EPC/ PCFC/ FBP/ PSFCSanctioned | 40.00 | _ | 40.00 | |
25 | State Bank Of India (SBI) | EPC/ PCFC/ FBP/ PSFCSanctioned | 84.00 | _ | 84.00 | |
26 | State Bank Of India (SBI) | Bank GuaranteeSanctioned | _ | 6.00 | 6.00 | |
27 | Un tied portion | CC (H)/WCDLSanctioned | 33.64 | _ | 33.64 | |
Total | 664.64 | 88.00 | 752.64 | |||
TOTAL (Rupees Seven Hundred Fifty Two Crores and Sixty Four lakhs Only) |
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