Oshyan Mercantile Pvt. Ltd.

Brickwork Ratings assigns the ratings for the Bank Loan Facilities of Rs.6.99 Crs. of Oshyan Mercantile Pvt. Ltd.

Particulars

Facilities**	Amount(Rs.Crs)	Tenure	Rating*
Fund Based	6.99	Long Term	BWR B + (Pronounced as BWR Single B plus) (Outlook: Stable)
Total	6.99	(Rupees Six Crores and Ninety Nine lakhs Only)

*Please refer to BWR website www.brickworkratings.com for definition of the ratings
**Details of Bank facilities are provided in Annexure-I RATING ACTION / OUTLOOK : Stable

BWR believes the Oshyan Mercantile Pvt. Ltd. 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 revisd to 'Negative' if the revenues go down and profit margins show lower than expected figures

KEY RATING DRIVERS

BWR has essentially relied upon the audited financial statements of Oshyan Mercantile Pvt. Ltd. up to FY18, provisional financials of FY19, projected financials of FY20, publicly available information and information / clarifications provided by the Company’s management. The rating draws strength from the business experience of the directors, established track of operations and financial risk profile. However, the rating is constrained by the modest scale of operations, low net worth and competition from other established players in the market.

Going forward, the ability of the entity to improve its scale of operations and to improve its profitability would be the key rating sensitivities.

Strengths

• Locational Advantage: The Company is located in Kolkata cluster and thus has a competitive advantage in terms of skilled labor, logistics, production knowledge and vendors making the Company more efficient and cost effective.
• Debt Protection Metrics: DSCR and ISCR of the company stand at 1.53 and 1.94 respectively in FY 18, indicating company’s adequacy to meet its debt obligations
• Company’s Existence: The Company is in existence for 21 years and has seen complete business cycles.

Weakness

• Competition in the Industry: Entry barriers in the industry are low on account of limited capital and technology requirement and also low differentiation in the end product leading to intense competition and limiting the pricing power resulting in low profitability
• Low Profitability: Operating Profit Margin has been in the range of 1.34% to 1.74% in the last three fiscals through FY 16. 
• Small scale of operations: The scale of operations remain moderate as reflected by Total operating income of Rs.35.39 Crores in FY 18.
• Comparatively Low Net Worth: Net worth in FY18 has increased by 20%. However, it remains low at Rs.1.57 Crores as on 31/3/18. With the increase in overall borrowing, the debt/equity ratio has gone up to 2.75x in FY 18 as against 2.35x in FY 17.

ANALYTICAL APPROACH AND APPLICABLE RATING CRITERIA

For ariving 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).

PROFILE

Oshyan Mercantile Pvt. Ltd. incorporated in 1998 has its registered office in Kolkata and manufacturing facility in Dhulagarh, Howrah. It is engaged in the manufacturing of wrappers, in the form of rolls and pouches, for consumables like biscuits, detergents, bhujia and printing thereon, by using rotogravure printing. Company runs under the directorship of Mr. Yashwant Bothra and Mr. Sourabh Bothra.

KEY FINANCIAL INDICATORS

Key Parameters	Units	FY 17-18	FY 16-17
Operating Revenue	Rs.Crs	35.39	31.24
EBITDA	Rs.Crs	0.62	0.39
PAT	Rs.Crs	0.11	0.04
Tangible Net Worth	Rs.Crs	1.57	1.31
Total Debt/Tangible Net Worth	Times	2.75	2.35
Current Ratio	Times	1.06	1.01

RATING HISTORY (INCLUDING WITHDRAWAL AND SUSPENSION)

S.No	Current Rating (2019)				Rating History
	Facilities	Tenure	Amount (Rs.Crs)	Rating	2018	2017	2016
1	Fund Based	Long Term	6.99	BWR B+ (Pronounced as BWR Single B plus) (Outlook: Stable)	NA	NA	NA
Total			06.99	(Rupees Six Crores and Ninety Nine lakhs Only)

COMPLEXITY LEVELS OF THE INSTRUMENTS

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 :

• General Criteria
• Approach to Financial Ratios
• Manufacturing Companies

For More Information Contact:

Analytical Contacts	Investor Contacts
Hema Sethia hema.s@brickworkratings.com	Liena Thakur Assistant Vice President - Corporate Communications M : +91 84339 94686 liena.t@brickworkratings.com
K.Venkateswara Raju Associate Director-SME & Vendor Gradings kvraju@brickworkratings.com
1-860-425-2742

SL.No.	Name of the Bank	Long Term(Rs.Crs)		Short Term(Rs.Crs)	Total(Rs.Crs)
		CC	TL
1	UCO Bank	4.5	2.49	0	6.99
	TOTAL (Rupees Six Crores and Ninety Nine lakhs Only)	4.5	2.49	0	6.99